China is set to pass its first charity law as it seeks to increase public confidence in charitable organisations battered by years of scandal, while at the same time tightening its control of the sector.

The draft of the law was presented on Wednesday to the National People's Congress, the country's Communist-controlled parliament, which is holding its annual session in Beijing.

It is due to approve China's next five year plan, which seeks to significantly reduce poverty by 2020, and officials have declared charitable organisations essential to achieving the goal.

But as the country's economy has grown to the world's second-largest, charitable giving has lagged, with the country ranking 144th out of 145 countries for giving, according to a study last year by the Charities Aid Foundation.

Chinese citizens donated just $16 billion in 2014, according to the most recent data from the China Charity Information Centre -- less than 0.2 percent of annual GDP.

China's official news agency Xinhua said the new law was intended to "recruit help from good Samaritans in realising the 2020 poverty alleviation target".

"All non-governmental sources should be encouraged to contribute to poverty alleviation. Charity programmes are indispensible for the fight against poverty," said senior NPC official Li Jianguo.

The draft "is generally considered to be a step forward" because it reduces organisations' regulatory burden, according to Susan Finder, an expert on Chinese law.

But some of the language, she added, has raised concerns among charitable organisations due to provisions that may make it easier for the government to engage in arbitrary interventions.

The draft includes provisions that make it illegal for groups to engage in any activity "that endangers national security or public interests".

Organisations both in China and abroad have criticised the language, revealed in an earlier draft of the bill, for being too broad, potentially giving authorities power to close groups for virtually any reason.

"I would have liked to have seen some due process" in the draft, Finder said, adding that officials might "not have their facts correct" when determining whether organisations have violated the law.

Charities experienced a surge in popularity following the devastating 2008 earthquake in Sichuan, but a string of high profile scandals have left the Chinese public suspicious of the organisations.

In 2011, China's Red Cross suffered a serious blow to its reputation after a spendthrift blogger claimed to be in charge of the finances of one of its subsidiaries.

Pictures of the woman enjoying a glamourous lifestyle, including fast cars and couture fashion, scandalised the public and caused giving to plummet.