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A draft of China's first bill regulating charities was submitted to the national legislature for review on Wednesday. Scholars believed that China’s first charity law, if passed, will exert far-reaching influence on China’s social and economic progress.

The law to be approved would specify rules on fund-raising and cut red tape, while adding transparent measures for donors in the world's second-largest economy.

Li Jianguo, vice chairman of the Standing Committee of China's National People's Congress (NPC), elaborated the draft during Wednesday’s second plenary meeting of the fourth session.

The bill comes amid China’s sharp rise in philanthropy. Annual donations to registered charities in China soared to 100 billion Yuan ($15.37 billion) in 2014 from 10 billion Yuan ($1.54 billion) in 2006. And more charity organizations are also sprouting up.

However, due to lack of regulation, the legitimacy and transparency of such institutions are often questioned, and even the cases on donation fraud and misappropriation sometimes make headlines.

Scholars believed the deliberation to be of historical significance in China’s social development.

The articles in the draft clarified major controversies that have sparked the public concern in the past.

Article 28 regulates charity activities from a legal and authoritative perspective. It stipulates that only eligible charitable organizations can conduct public fund-raising, and the funds and materials raised are to be managed by these organizations; those not entitled to do so can turn to the eligible ones for cooperation.

Transparency is also highlighted in the bill for preventing corruption. Charities must publish their charters of association and information on their executives and supervisory bodies. They should also submit annual reports complete with financial statements, details of projects launched, as well as staff’s salary and benefits.

Criminal charges will be pressed for those who defraud assets in the name of charity, and donation solicitation should always be conducted in an honest and voluntary manner, which is also listed in the bill.

The bill not only regulates charity organizations and private donations, but specifies the obligations of government management.

As China’s first charity law, if passed, it will be a systematic regulation for all of society, said Dean of the China Philanthropy Research Institute of Beijing Normal University.

The law is to promote and encourage the extensive development of philanthropy in China, not limit it, he added.