Charities are feeling the pressure from the global financial crisis [GALLO/GETTY]

China's Aids orphans and the economic downturn appear to have little in common on the surface.

But as international charities working in the People's Republic begin to feel the squeeze, these children are joining the growing list of victims of the global financial crisis.

Fuyang is a nondescript city of around nine million in Anhui, one of China's poorest provinces.

Its sad claim to fame is that it was one of the areas hardest hit during the tainted blood scandal of the 1990s, when tens of thousands of donors contracted HIV from contaminated blood transfusions.

A tragic legacy to the scandal are the thousands of Aids orphans - children who lost one or both parents to the disease or are themselves HIV positive.

Plunging pound

Save the Children has been one of several charities in Fuyang trying to ease their plight.

The falling pound has forced Save the Children to shut down several projects [EPA]

But earlier this year the UK-headquartered charity, battered by the plummeting British pound, was forced to close their Fuyang office.

As of March, the pound had declined about 30 per cent against the Chinese currency from a year ago.

"Most of our money is raised in the UK and most of it is spent in renminbi so we've had to cut things that we wanted to do," Wyndham James, China country director for Save the Children, told Al Jazeera.

About 8,000 children were affected by the closure of the office, he says, and 20 employees lost their jobs.

Their programme also helped other disadvantaged children, including youngsters of migrant workers.

Vulnerable

While China appears so far to have escaped the worst of the economic crisis itself, international and domestic non-governmental organisations operating on the mainland appear particularly vulnerable to the downturn.

The problem is that most international NGOs and about 90 per cent of domestic NGOs get their funding from overseas, explains Qian Xiaofeng, editor of China Development Brief, a Beijing-based journal.

It is difficult to legally register as an NGO in China and without that status it is against the law to fundraise on home turf.

Plunging exchange rates have forced charities to rethink budgets [AFP]

"Domestic NGOs that can raise money are in a better position because they can fundraise here and the economic crisis has not hit China as hard as it has hit the West," Qian says.

She says that she first started to notice charities were struggling at the end of last year.

Action Aid is another UK-based charity which has been feeling the squeeze.

"We've been hit pretty badly, in particular because of the currency," says Yu Xiaodong, the charity's China communications co-ordinator.

"Even if your reserves are not affected, it is 30 per cent less effective [because of the currency drop]."

Budget slashed

This year the charity's projected budget of 2.4m pounds is likely to be slashed to around 2m pounds, he adds.

While Action Aid, which sponsors about 7,400 children in China, has not had to close any of its regional offices, it has put the screws on operational costs such as cutting down on publications and axing side projects.

"Last year we gave 50,000 renminbi to the Climate Change NGO network that we worked on with other international NGOs but this year we cannot commit to that," Yu says.

Even so, he says, Action Aid still has enough money to continue its core work of sponsoring children and it will not be laying off any of its 58 staff members.

China Development Brief's Qian says that aid agencies are reluctant to cut staff even in crunch times partly because it draws unwelcome media coverage.

"They don't want to draw attention to themselves," she says. "If they have to declare they cut so many staff then that will be very sensational."

High profile disasters such as last year's Sichuan quake can help charities [Reuters]

The high profile of last year's earthquake in Sichuan has meant some charities working in the province are assured of funding because the international response to the disaster was so huge.

"We haven't felt the crunch [of shrinking donations] in China, but that's largely because of the programmes we've developed in Sichuan," explains Save the Children's Wyndham James.

"Quite a lot of people are interested in funding because of the high profile of the earthquake."

Even so, its budget for 2009 is down about 12 per cent from last year, he adds.

Fuyang's Aids orphans are victims of their relative anonymity.

"Anhui suffered a lot from being a place that donors don't know much about," says James.

"It was always more difficult to fundraise for and the example of Sichuan is that whenever a place comes into profile then donations tend to follow."

Sensitive

But charities are facing other pressures on top of purely financial ones because of the downturn.

Some aid groups say they are experiencing more government interference because the authorities are more sensitive about social stability in the wake of mass layoffs connected to the economic slump.

According to a government report last month, at least 25 million migrant workers have lost their jobs because of the global slump.

"This issue is quite subtle, and it is many tiny things, such as seemingly casual police visit to our staff," says one NGO source who asked to remain anonymous.

The source made reference to a state media report in March which called for "caution against anti-China international organisations wishing to take advantage of financial crisis and increased unemployment to stir up social unrest within migrant worker groups".

But for now, like the rest of the world, international charities in China are trying to muddle through, with no one quite sure when the upturn will come.

"Things are likely to get very tough by next year and for the next two or three years," says Save the Children's James.

"There are clear signs from a number of major donors, corporate and others, that it's going to get worse."