Thursday, April 12, 2018

Resources for contextualizing recent developments in philanthropy and civil society

I'm proud to announce the release of a set of infographics, graphs, timelines, factsheets and FAQs that I developed with the International Center for Not-for-Profit Law. You can find these resources on ICNL's website. The purpose of these resources is to help people understand the significance of recent developments in the philanthropy and civil society space in China. They are meant to complement a longer, more detailed China Philanthropy Law Report that I wrote and published with ICNL.





The idea behind these resources was to 1) provide context for the report, and 2) highlight the significance of the legal developments discussed in the report.

In terms of context, we wanted to provide a visual way to understand the universe of civil society actors affected by recent legislation, particularly for those unfamiliar with the Chinese civil society space. Thus one set of resources is a Universe of Chinese  and Overseas NGOs, and graphs showing the growth of Chinese NGOs since the 1990s.

Another part of the bigger picture is how these developments fit into the longer-term evolution of philanthropy and civil society, and its regulation, in China. Thus, another set of resources are two timelines, one a timeline on the rise of philanthropy and civil society in China, and another timeline on major developments in the regulations of philanthropy and civil society.



In highlighting the significance of the legal developments discussed in the ICNL report, we wanted to drive home how major legal developments starting in 2016 have substantially reshaped the philanthropy and civil society space in China. Thus, we developed three factsheets underlining major changes in the regulation of Chinese and Overseas NGOs after 2016.


Finally there are two sets of FAQs, one on the 2016 Charity Law and another on the 2016 Overseas NGO Law.

I hope these resources are useful for those who want to understand the importance of these very substantial changes that have taken place in the legal environment for philanthropy and civil society  in China over the past 2-3 years. Please share these resources if you think they would be helpful to others.


Thursday, March 29, 2018

From Hong Kong to Guangzhou

I realize I haven't blogged since last December and I do feel a bit of blogrust writing this. I don't have many excuses, except that I left my job as Deputy Director at China Labour Bulletin in Hong Kong in January and moved out of my Hong Kong flat and over the border to Guangzhou where I now reside. In addition to moving and settling down in a new and fascinating city, I've been very busy finishing up some consulting jobs, writing and producing content about the legal environment for philanthropy and civil society in China, and how NGOs can counter the closing of civic space in China and the Asia-Pacific.

Now that I've gotten my excuses out of the way, I plan to blog and write more regularly about my recent projects, the civil society landscape after the 19th Party Congress and recent National People's Congress, and much more, in the days and months ahead.

Because blogging and writing are about as profitable as singing on the street, and I always need a good excuse to get out of the house, I'll also continue to do consulting for organizations working in China and other parts of the Asia-Pacific. Below are my areas of expertise:
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  • Analysis of political and policy trends in China, particularly in the area of philanthropy, civil society, labor and law

  • External evaluations of programs, and writing grant proposals and project reports
  •  
  • Providing guidance for NGOs on complying with the Overseas NGO Law in China and registering in Hong Kong
  •  
  • Developing innovative civil society fundraising, programming and management proposals and strategies in challenging operating environments, with a focus on China and the Asia-Pacific
  •  
  • Developing service learning curriculum and programs in China for Chinese and international college students
If you know of anyone who needs help in any of these areas, please have them get a hold of me at shawnshieh@gmail.com.

Saturday, December 9, 2017

The Charity Law and the mainstreaming of philanthropy and civil society (sort of) in 2016-17, Part 2


In my last post, I mentioned some events and trends that suggest philanthropic and civic activity is slowly entering the mainstream of Chinese society. These are trends that some of us may not want to recognize but we ignore them at our peril. Whether we like it or not, Chinese (and here I mean citizens and non-governmental actors and not just the government) are driving social change. Below are two more trends we should be keeping an eye on.

One is the growing interest of Chinese individuals in giving as evidenced in the rapid rise of online fundraising. In 2016, the Ministry of Civil Affairs approved 13 charitable organizations’ online philanthropy platforms. Among them, the Tencent Philanthropy (腾讯公益平台), Ant Group Philanthropy (蚂蚁金服公益平台) and Taobao Philanthropy (淘宝公益平台) platforms raised 1.289 billion RMB, 37.79% higher than the figure for 2015. Looking at the age groups of the donors, the generation born in the 80s ranked first, making up more than 45% of the donors. Online donations went mostly to education and health, followed by disaster relief and environmental protection. More than 70% of online donations were via mobile phones.

One event that has stimulated a great deal of public interest in philanthropy is Tencent’s 9/9 (September 9th) Day of Giving which began in 2015. This year’s 9/9 Day of Giving (which actually takes place over three days) was the most successful so far, generating over 1.3 billion RMB in donations, of which 829.9 million RMB came from public donations, 299.99 million RMB came from matching funds from the Tencent Foundation, and 177 million RMB from social enterprises.  A total of 12. 68 million donors made contributions to around 6,466 charitable projects.

While the results of the 9/9 Day of Giving are impressive, concerns about fraud have cropped up with reports about a small number of donations being machine-generated. Tencent Foundation has promised to investigate the issue and issue the results soon.

The second trend is the internationalization of Chinese philanthtropy. Over the last few years, largely following the outflow of Chinese investment, Chinese foundations have begun to fund and even set up their own charitable and CSR activities in Southeast Asia, Africa and even Europe, sometimes leveraging the expertise and experience of international NGOs. Until now, however, there has been little connection between Chinese foundation activities abroad and global development goals such as the UN Sustainable Development Goals (SDGs). That was the aim of a recent report, “Philanthropy for the SDGs in China,” jointly released by the United Nations Development Program (UNDP) and China Foundation Center (CFC) which are jointly setting up a knowledge sharing platform to mobilize Chinese philanthropic actors to link their activities more closely to the SDGs. One contribution of the report was to call attention to the current imbalances in Chinese philanthropy which has poured funding into education and poverty alleviation, yet neglected areas such as gender equality, sanitation, clean energy and climate change.

As with online fundraising, the internationalization of Chinese philanthropy is going through growing pains. While some Chinese philanthropists and foundations have started to make donations and set up projects overseas, they have done so warily, sensitive to public backlash against Chinese resources being used to support development abroad rather than development at home. One of the first studies of Chinese NGOs internationalizing found that while over half of the NGOs surveyed felt it was necessary to internationalize, only about 17% felt the current environment was right while about 46% felt the environment for internationalization was not sufficiently developed[i]. Still there is no doubt that internationalization is taking off and will gather steam following China’s growing footprint overseas and initiatives like One Belt One Road.  The same study found that the value of overseas donations from Chinese foundations in 2015 had risen by a factor of 3.66 since 2014 and 1209 since 2008.


[i] Deng, Guosheng. 2017. “Trends in Overseas Philanthropy by Chinese Foundations.” Voluntas, (April).

Tuesday, December 5, 2017

The Charity Law and the Mainstreaming of Philanthropy and Civil Society (sort of) in 2016-17, Part 1

I’ve been informed that today is International Volunteers Day and the start of International Civil Society Week, with a gathering of civil society people in Fiji of all places. Fiji sounds like a nice place to be at this time of year. Not that you have to go there to be reminded that civil society exists. All you need to do is walk out your front door and find a gathering of people. Ask them what they’re doing and why. More likely than not, they’re getting together for some civic-minded purpose.

At any rate, since this is Civil Society Week, I feel I should write something about philanthropy and civil society in China. I’ve been planning to write something about Xi Jinping’s 19th Party Congress report and its implications for philanthropy and civil society in China, but will return to that weighty subject when I have more time to wrap my head around it.

Speaking about Xi’s report, a number of informed, sober-minded commentators gave some pretty optimistic appraisals about it after the Congress was over, particularly Xi’s recognition of the role that social forces and organizations play in China’s governance. They may have a point. Xi is making his pronouncements at a time when a number of initiatives and trends are taking place that suggest philanthropic and civic activity are slowly entering the mainstream of Chinese society. It may not always take forms that we in the West recognize, but the changes are happening more quickly than many would think. The 2016 Charity Law had a major role to play in stimulating these changes, some of which are reflected in the following events and trends that took place over the last few months.

In early September, almost exactly one year after the Charity Law went into effect, the Ministry of Civil Affairs launched the National Charity Information Platform (全国慈善信息公开平台) in early September. The purpose of the platform is to make it easier for the public to find information about charitable organizations and supervise their activities, and encourage charitable organizations to disclose information about their fundraising and activities. The platform currently has information about 2,134 charitable organizations and 38 charitable trusts which were made possible by the Charity Law. The official website of the information platform is http://cishan.chinanpo.gov.cn. The platform can also be accessed by visiting the Ministry of Civil Affairs’ website at www.mca.gov.cn or China’s NPO website at www.chinanpo.gov.cn, and clicking on “Charity Information Platform” box at the bottom of the website.

A recent report released by the China Charity Alliance, “Giving China: The Annual Report on Philanthropy,” shows clear evidence of significant growth
in philanthropy in Chinese society last year. According to the report, total donations in 2016 reached a new historic high to 139.294 billion RMB, a 25.65% increase over 2015 (100.859 billion RMB). Per capita giving was 100.74 RMB, a 23.32% increase over 2015 (81.69 RMB).

Unlike the U.S. where individual giving dominates, corporate giving in China continues to account for the lion’s share with 65.35% of total donations in 2016. However, individual donations are rising faster, increasing by 73.52%, compared to corporate donations which grew by 15.86%.

Social donations are heavily concentrated in three areas: education (30.44%), health (26.05%) and poverty alleviation (21.01%). Social donations primarily went to foundations (62.55 billion RMB) and the China Charity Federation system (40.41 billion RMB), although a fair share still went to government departments, public institutions and mass organizations (26.06 billion RMB).

Comparatively speaking, China still lags behind the U.S. and European countries such as the UK. Total donations accounted for 0.19% of China’s GDP, compared to 2.1% for the U.S. and 0.52% for the UK. However, if the growth in giving continues at the current pace, we can expect China to close the gap significantly over the next few decades.

I’ll discuss two other trends – the rapid rise of online fundraising and the internationalization of philanthropy - in my next blogpost, hopefully before Civil Society Week is over.

Saturday, October 28, 2017

The Need to Return to Social Governance after the 19th Party Congress

With the closing of the 19th Party Congress, some have been quick to label this period the “Xi era”, and it’s easy to see why. Centralization of power, consolidation of strongman rule, bolstering national security and rule of law, rejuvenating the Chinese Communist Party, and extending China’s global influence  – these are all hallmarks of XJP’s rule, and they are impressive. But we may be too quick in anointing this the “Xi era” simply because it is too early to know whether Xi’s policies will find broad-based support and make a lasting impact beyond his tenure.

Certainly the policies of Mao and Deng had such an impact, and their names are worthy of pinning “era” next to their names. But we should remember that five and even 10 years into the “Deng era,” it was by no means clear whether Deng’s reform policies would survive, particularly when confronted with the 1989 democracy protests. Now, five years into the “Xi era,” we know that he has centralized the policy making process and cemented his strongman status. But it is by no means clear that Xi’s particular approach to consolidating power has created a more stable and robust national security and rule of law regime, or rejuvenated the CCP, let alone put China on the socioeconomic path to achieving a moderately prosperous, and more equitable, society.

Looking back at the threats confronting CCP rule when Xi came to power, it is hard to fault him for centralizing power in Beijing and himself, because he attributed those threats to the fragmentation and decentralization of power in the CCP in the years preceding his tenure. Centralizing power, which went hand in hand with strengthening Xi’s own authority, was critical if Xi was to formulate quick responses to what he perceived as unbridled corruption and lax discipline within the party, and security threats inside and outside China’s periphery.

But the course that Xi chose came fraught with its own pitfalls.  One is that this concentration of power, which was intended as the means to an end could easily become an end unto itself.  In this scenario, Xi’s effort to strengthen the “rule of law” and rejuvenate the CCP ends up becoming the “rule of Xi” and destabilizing the party  and the rule of law as institutions, as David Shambaugh and others remind us. This risk would become a reality if Xi were to go against party norms and keep leaders who have reached “retirement age” such as Wang Qishan in the Politburo Standing Committee (which Xi did not do), or staying on as General Secretary of the CCP for a third term.  If so, then Xi would be guilty of committing the biggest irony of all: by seeking to rejuvenate the CCP, he would be undermining efforts made by Deng Xiaoping and his successors to strengthen CCP rule by strengthening collective leadership and leadership succession norms.

Even if Xi were not to go that far, his approach to politics and governance still runs the risk of not being sustainable because it may be unable to garner broad support. Unlike Deng Xiaoping’s rural and fiscal reforms which played to farmers and provincial leaders, Xi’s centralizing policies, particularly his anti-corruption campaign, have not had a galvanizing effect on local leaders or any other key constituency. In this sense, XJP’s governance approach has been more about building up his own personal authority and the authority of the Party than about cultivating support from key constituencies. 

The big question then is whether Xi’s governance measures will outlive him when he steps down, either according to form in 2022 at the 20th Party Congress after serving his second five-year term, or by breaking form and serving a third term and then stepping down in 2027 at the 21st Party Congress.

This brings me to the crucial contribution of civil society to stable and legitimate governance. As others have pointed out, the concentration of power in central bodies and Xi, without feedback mechanisms from different segments of society, raises grave risks in a country as large and diverse as China. As China’s successful rural and private sector reforms of the 1980s and 1990s show, effective and sustainable policies require input and buy-in from local authorities and social actors who are unlikely to feel a strong sense of ownership over policies that are not beneficial to their lives.  In direct contrast, disastrous policy experiments such as the Great Leap Forward and Cultural Revolution were the result of an overconcentration of power and inadequate feedback from the grassroots.

At an earlier point in time, Xi seemed to understand the importance of consulting with civil society in improving China’s governance. In the 2013 Third Plenum Decision of the 18th Central Committee on Comprehensively Deepening the Reforms, which was extolled at the time as being Xi’s signature statement and is now seen by many commentators as destined for the garbage bin, Xi recognized the significance of working with social actors in strengthening governance. Entire sections of the Decision discussed the importance of “consultative democracy” and “social governance.”

We will, under the Party's leadership, carry out extensive consultations on  major issues relating to economic and social development as well as specific problems involving the people's immediate interests, and conduct consultations before and during the implementation of policy decisions. We will build a consultative democracy featuring appropriate procedures and complete segments to expand the consultation channels of the organs of state power, committees of the Chinese People's Political Consultative Conference, political parties, and community-level and social organizations. We will conduct intensive consultations on issues relating to legislation, administration, democracy, political participation and social problems.

The section on “innovations in social governance” called for clarifying the rights and interests of social organizations and working with them to create mechanisms to prevent and resolve social conflicts.  The language here was still state-centered, emphasizing the role of party leadership and adhering to the law, but the call for reinvigorating horizontal interactions between the state and society, rather than strengthening the state’s vertical management of society, was notable, unprecedented and yes even innovative.

Four years after the Third Plenum Decision, it is clear that Xi has turned his back on his own prescription for better governance, and instead condoned tightening controls over social actors, and silencing those who advocate for socioeconomic changes. There have been a few exceptions. The revised Environmental Protection Law which went into effect on January 1, 2015 allowed social organizations for the first time to file public interest lawsuits against polluters. In November 2015, facing historically high levels of labor disputes and strikes, Xi also took the official trade union, the All-China Federation of Trade Unions (ACFTU), to task for becoming irrelevant to workers and called on them to reform to better represent workers. But these measures have been too few and more symbolic than substantive.

The tragedy of these last few years is that the voices that have been muzzled were not calling for revolution, instigating violence, or fomenting social disorder. They were instead constructive voices calling for practical, innovative ways to address official corruption, unpaid wages and social insurance, sexual harassment, pollution, and discrimination against ethnic minorities. The people calling for these changes were doing so out of a sense of responsibility to the nation, because they wanted to make China a more inclusive, equitable and just place very much in the socialist spirit. They were in fact the very voices that could help Xi craft better policies if he had listened to them and incorporated their ideas into his policies.

The challenges Xi and his new leadership team face after the 19th Party Congress are immense as Xi himself acknowledges. If he continues his current governance approach, he runs the very substantial risk of undermining the long-term capacity of the Party to govern by vesting so much power and authority in himself.  Or he could use his immense power wisely and return to his original playbook of social governance, reaching out to social constituencies to give them a voice in shaping socioeconomic policies, thereby creating broad-based support that would strengthen their legitimacy and sustainability.

Monday, September 25, 2017

Progress as of August in Implementing the Overseas NGO Law


After a slow start, the Ministry of Public Security (MPS) and its provincial Public Security Bureaus (PSBs) seem to be finding their stride in implementing the Overseas NGO Law with the rate of registering representative offices and filing “temporary activities” quickening over the last few months. As of August 22, the MPS Overseas NGO Office website shows a total of 185 representative offices, of which around 88 (48%) were registered just in the last three months.  The representative offices were registered in around 20 of China’s 32 provincial-level units, with the highest number concentrated in Beijing, Shanghai, Yunnan and Guangdong. Because some NGOs have registered more than one representative office, the actual number of foreign NGOs that have registered in China is somewhat lower than 185. Most of these NGOs are from Hong Kong, the U.S., Japan, Germany and South Korea, and fall into two main groups: 1) NGOs and foundations working on development issues such as education, health, disaster relief, poverty alleviation and environment; and 2) business and trade associations. For the latest data and tables, see ChinaFile's terrific China NGO project.

The progress made in the last few months also shows that the MPS authorities have made some headway in getting PSUs to agree to sponsor foreign NGOs interested in registering a representative office. Finding a willing PSU has been a major stumbling block to registration in the past. NGOs such as the Nature Conservancy, Ford Foundation, Asia Foundation, Give2Asia, Environmental Defense Fund, and the Heinrich Boll Foundation, to mention some prominent examples, had been unable to register under the 2004 Foundation Management Regulations in large part because they were unable to find a willing PSU. Over the last few months, all of these NGOs have found a willing PSU and successfully registered. In some of the more challenging cases in which the NGO worked in multiple issue sectors, the MPS was able to bring in new PSUs that had not been on the original PSU directory to sponsor these NGOs. The most notable of these is the Chinese People’s Association for Friendship with Foreign Countries (CPAFFC) which is serving as the PSU for the Ford, Asia, Heinrich Boll, Konrad Adenauer and Rosa Luxemburg Foundations, as well as Give2Asia[i]

The MPS website also shows that foreign NGOs filed for 228 “temporary activities” with the large majority of these being filed in the last 4-5 months. Here again, some NGOs have filed for multiple temporary activities (Oxfam Hong Kong alone has filed for more than 30) so the actual number of NGOs that have filed successfully is well below 228. Most of these activities are being filed in the western and southern provinces of Sichuan, Guizhou, Guangdong and Yunnan followed by Shaanxi, Beijing, Gansu and Anhui. The NGOs filing these activities mostly come from Hong Kong, the U.S. and Germany. In contrast to NGO representative offices, which have been in both the trade/business and development sectors, the large majority of NGOs filing temporary activities work on development issues concentrated on youth, education, poverty alleviation, health, disaster relief, capacity building, environment, and disabilities.

There is of course still a great deal of work ahead for both the MPS and overseas NGOs. While the numbers of NGOs that have registered rep offices and filed "temporary activities" may look promising, they are far less than the actual number of overseas NGOs working in China which official sources estimate at around 7000. Given the amount of time required for MPS and provincial PSBs to create the infrastructure, coordinate with other relevant departments, and train staff, it should not be all that surprising that only a few hundred NGOs have succeeded. Finding willing PSUs remains a problem as only a handful of the eligible PSUs are sponsoring overseas NGOs. On the NGO side, some are in the process of preparing their paperwork, but an even larger number are simply playing a wait-and-see game and finding ways to work around the law. There is still a significant grey area for NGO operations. We'll see how much and how fast that will change after the 19th Party Congress in October.


[i] The CPAFFC was founded in 1954 as a national GONGO (government-organized NGO) specializing in foreign affairs. Over the years, it has cooperated with numerous NGOs, participated in civil society activities and acted as a catalyst for developing China’s relationship with the world. Since its establishment, CPAFFC has formed friendly relationships with over 500 non-governmental organizations from over 150 countries.]

Monday, May 8, 2017

More Analysis of the 62 Registered Foreign NGOs

Following up on my last blog post showing the most recent stats on foreign NGOs that registered a representative office by month and province (Table 1), I decided to also break them down by sector (Table 2) and by country/territory of origin (Table 3) to see what the numbers would reveal. The source was a list of registered foreign NGOs available on the Ministry of Public Security's website. 

Table 1: Number of ONGOs that have registered a representative office by month and province


Jan
Feb
March
April
Total
Beijing
22
1
1
4
28
Guangdong
5

3
2
10
Shanghai
6


8
14
Sichuan


1
1
2
Yunnan



9
9
Jiangsu



3
3
Gansu



1
1
Guizhou



1
1
Jiangxi



1
1
Total
33
1
5
30
69


In total, 62 NGOs were listed as registering a total of 69 representative offices. Five of the 62 NGOs had succeeded in registering a representative office in more than one province. These included:

  • MSI Professional Services, a faith-based NGO doing poverty alleviation work (agriculture, community health and development, business development, education and youth, etc.) which had registered a rep office in Sichuan and Yunnan; 
  • Project Hope, a NGO which works on health care, had rep offices in Beijing and Shanghai
  • U.S. Soybean Export Council which had rep offices in Beijing and Shanghai.
  • U.S.-China Business Council which had rep offices in Beijing and Shanghai.
  • World Vision Hong Kong, a NGO which works on community and youth development, poverty alleviation and disaster relief, had rep offices in Guangdong, Yunnan, Guangxi and Jiangxi.
  •  
For Table 2, I had to create broad categories and settled on making a distinction between: 1) membership associations engaged in commerce, trade and scientific/technical research; 2) development-type NGOs providing social services (mostly health-related, child welfare, and poverty alleviation, and environmental); and 3) NGOs engaged in education and cultural exchange. (Note: In an earlier version of this post, I used the term "social service" instead of "development" but an astute reader noted that environmental NGOs generally do not provide social services, but rather usually do advocacy. I'll use the term "development" for now until I can think of a better solution.)

Table 2: Number of ONGOs registered by sector/field


Development
Education/
Culture
Econ/
Trade
Sci/
Tech
Think-tank
Total
Beijing
18
2
7

1
28
Guangdong
3
2
5


10
Shanghai
2

11
1

14
Sichuan
2




2
Yunnan
9




9
Jiangsu

1
2


3
Gansu

1



1
Guizhou
1




1
Jiangxi
1




1
Total
37
5
25
1
1
69


The largest sectors were development with 37 NGOs, and economic/trade associations with 25. I also created a separate category for think-tanks, in this case the Paulson Institute which was registered in Beijing.  The Paulson Institute is a U.S. think tank founded by Henry Paulson, the former CEO of Goldman Sachs and former Treasury Secretary under President George W. Bush.

Not surprisingly, most of the registered development NGOs were concentrated in Beijing and Yunnan, a province which has a long history of involvement by foreign NGOs mostly working in the environmental, health and poverty alleviation sectors. Most of the economic and trade associations were concentrated in the industrial/commercial centers of Beijing, Shanghai and Guangdong as we would expect.

In terms of country of origin (Table 3), the largest number came from the U.S. with 25. Here again, this was no surprise given the size of the nonprofit sector in the U.S. compared to other countries. What was more unexpected was the number of Hong Kong-based NGOs (20) that had managed to register, nearly as many as from the U.S., and far more than those from European countries. Many of these were social service, or educational/cultural NGOs, rather than economic/trade associations, contrary to what we might think given Hong Kong's position as a commercial center. Several of these NGOs were established by ethnic Chinese, faith-based, quite small and not well-known, in contrast with the much larger, well-known NGOs such as the Gates Foundation, Save the Children, Family Health International, Conservation International and World Wildlife Fund from the U.S. and Europe. In fact, an internet search on a number of them turned up almost no information about their mission, organization, governance or activities. Many had also not been previously registered as a rep office of a foreign foundation with the Ministry of Civil Affairs under the 2004 Foundation Management Regulations. The ability of these Hong Kong-based NGOs to register a rep office quite early on suggests that capacity and expertise may not count as much as an organization's cultural/ethnic affinity, connections, and history working in the PRC, but that may also be pure speculation on my part. Still their presence on the list does raise the question of how these NGOs were able to get a head-start on many of their better-resourced counterparts.

Table 3: Number of ONGOs registered by country/territory


BJ
GD
SH
YN
SC
JS
GS
GZ
JX
Total
U.S.
16

9
2

1



28
HK/Macau
5
7
1
4
1


1
1
20
U.K.
1


1
1
1
1


5
France
2








2
S. Korea
1
1







2
Switzerland
1


1





2
Germany
2








2
Taiwan

1



1



2
Spain


1






1
Australia



1





1
Japan

1







1
Canada


1






1
India


1






1
Russia


1






1
Total
28
10
14
9
2
3
1
1
1
69