The financial credit information system and China’s evolving data protection law

1. March 2021
A new paper by Lu Yu and Björn Ahl
The headquarters of the People’s Bank of China in Beijing, supervising entity of the financial credit information system

How is data protected in the evolving Social Credit System? Both, social credit and Chinese data protection law is diverse and fragmented, making the search for an answer to this question a complicated endeavour. Lu Yu and Björn Ahl dive into one arguably most sophisticated arm of the Social Credit System, that is, the financial credit information system (FCIS) in their new article “China’s evolving data protection law and the financial credit information system: court practice and suggestions for legislative reform” (free draft here).

The FCIS is not only one of the most mature parts of the overall SCS, as it regulates private entity’s data collection, it also features stricter and clearer data protection rules than those Social Credit subsystems that include data collection by state organs. Most importantly, Chinese data protection law requires data subjects’ consent to the collection and further transfer of personal data. The authors have found the consent requirement to be incompatible with the functions and purposes of the FCIS, with data subjects having no real choice, as consent is linked to obtaining the financial service in questions. Hence, future rounds of reform should establish exceptions to the consent requirement.

In their article “China’s evolving data protection law and the financial credit information system: court practice and suggestions for legislative reform” (free draft here) the authors investigate the limits that Chinese data protection law imposes on the FCIS. The FCIS receives both financial credit data from financial institutions and public data from public authorities. Yu and Ahl analyse the legal framework and how data protection rules are applied in court practice, including the preconditions for and levels of protection afforded data subjects’ rights and the legal consequences of any violations of those rights. Although the courts have adopted differing approaches to the interpretation of data protection law, the authors find that they have established consistent practice in protecting data subjects against the transfer of incorrect negative data. Chinese data protection law provides for neither an effective legal basis nor for limits on the collection and transfer of public data by public authorities. The Information Security Technology – Personal Information Security Specification (2020, hereafter: Specification) provides comprehensive protection for the personal data processed by all organisations, including public authorities, but it is only a recommended standard that lacks binding authority. Although the 2012 Regulations on the Administration of the Credit Investigation Industry grant data subjects a number of rights, the courts have difficulties applying the data protection rules in practice. In sum, there is a need in both the private and public sectors for nationally applicable, binding and more sophisticated data protection rules.

→ What is the FCIS? Different public authorities organise and maintain their own credit systems. The FCIS is one system at the national level that is supervised by the People’s Bank of China and functions as a public credit registry. It draws on financial credit data, the discredited judgment debtor list system operated by the SPC, which concerns individuals or entities refusing or failing to comply with an effective court judgement; and the information system operated by the China Securities Regulation Commission in relation to capital market activities. Founded in 2006, the FCIS is a predecessor of the Social Credit System: Pursuant to the Interim Measures for the Administration of the Basic Data of Individual Credit Information, the FCIS collects and stores individual credit data to provide inquiry services to commercial banks and individuals. It further offers information to be used for the formulation of currency policy, financial supervision and other purposes provided for by law. Hence, the purpose of the FCIS is twofold: to inform financial institutions for the purpose of reducing credit risks and to provide information to regulators to support policy making. At the end of 2018, the FCIS held personal data concerning 980 million natural persons.

Progress was recently made with the introduction of personal data protection to the new Civil Code, and a comprehensive data protection law is currently on the legislative agenda. Because the Specification has already established a sound model by providing very detailed data protection rules, the future comprehensive data protection law should address the processing of data by public authorities and further refine the already established data protection principles in the Cybersecurity Law and Specification. Improvements in data protection, in particular the regulation of data sharing between public authorities, could serve to balance social governance and individual rights and contribute to enhancing the legitimacy of the overall SCS.

Lu Yu is a research assistant at the chair of Chinese Legal Culture of Cologne University. She is about to submit her dissertation on European and Chinese data protection law to the Georg-August-Universität Göttingen where she has conducted research since October 2017, after working as a legal counsel with Rödl & Partner in Guangzhou. Reach out to her at yuluna5(at)gmail.com.

Björn Ahl is Professor and Chair of Cologne University’s Chinese Legal Culture. Before joining the University of Cologne in 2012, he was Visiting Professor of Chinese Law, Comparative Public Law and International Law in the China EU School of Law at the Chinese University of Political Science and Law in Beijing. Prior to that he held a position as Assistant Professor of Law in the City University of Hong Kong. He has also worked as Associate Director and Lecturer in the Sino German Institute of Legal Studies of Nanjing University and as a Researcher at the Max Planck Institute of Comparative Public Law and International Law in Heidelberg. Find him on LinkedIn.

Divorce in China: Institutional Constraints and Gendered Outcomes

17. February 2021
A new book by Xin He

Why do so many Chinese woman suffer or even die from domestic violence? Why are women still at a disadvantage in Chinese divorce courts for property and child custody? Why are the personal safety protection orders rarely issued?  Why are the laws protecting women’s rights not implemented?

The existing literature has, explicitly or implicitly, attributed this to the following four reasons: incomplete protections of the law, out-of-court gender biases, a lack of gender consciousness on the part of judges, and disparities between the litigation capabilities of men and women. While each of these reasons contributes to the gendered outcomes, they are inadequate at explaining the breadth and depth of women’s bleak situation.

In Divorce in China, Xin He turns to the most unlike suspect—Chinese courts and judges. This new book argues that institutional constraints to which judges are subject, a factor largely ignored by the existing literature, play a crucial role in generating gendered outcomes. Twisting the divorce law practices are the bureaucratic incentives of the court and its political concerns for social stability. The judges are responding to two sets of interrelated institutional constraints: efficiency concerns and stability concerns.

The judiciary trumpets a slogan “to achieve the combination of both legal and social effects.”

Efficiency concerns mean that judges are supposed to handle cases efficiently. The Civil Procedural Law stipulates that cases tried by the Normal Procedure are to be completed within six months, and those using the Simplified Procedure have only three months to finish. Some senior officials managing their courts even shorten the limits to 90 or 20 days, respectively, to allow themselves more room to manoeuvre. The case closure rate, an indication of the effectiveness and efficiency of court operations, appears in every court’s annual work report. By December of each year, many courts stop taking new cases so that they can increase the case closure rate for the year.

Stability concerns mean that the court decision is accepted by the litigation parties and by society at large—it does not foment social instability. This is controlled by the appeal rate, the remand rate, the petition rate, and the number of malicious incidents, including social protests and deaths. The judiciary trumpets a slogan “to achieve the combination of both legal and social effects.” While the legal effects suggest the observations of legal principles and rules, social effects imply that society accepts the decision peacefully. It would be nice if the two were consistent and mutually reinforcing. But when they conflict, legal principles and rules have to make way for social effects. That is, the law is compromised.

Due to these concerns, judges often choose the most efficient, yet safest, way to handle issues in divorce litigation. They have to make sure that cases are finished before the deadline, and this without malicious incidents. They want a balanced decision, acceptable for both parties which does not provoke extreme reactions. This behavior pattern, Xin argues, results in gendered outcomes.

domestic violence confirmed at the trial level is often erased, dismissed, or ignored at the appeal level.

First, many laws protecting women’s interests are not fully implemented. These laws are created to reverse social, cultural, and economic biases against women. They are not necessarily gender neutral; they may favor women, or offer them a hand. Their implementations are crucial for rectifying gender biases and eventually achieving gender equality. Due to judges’ concerns however, domestic violence confirmed at the trial level is often erased, dismissed, or ignored at the appeal level. This occurs because the appeal court needs to strike a balance. The protection order, intended to help the victims of domestic violence before the litigation process ends, has been underutilized, because issuing such orders increases judges’ workloads. Child custody turns into a bargaining chip to soothe the unsatisfied men. Children are taken away from women simply because men are viewed as posing a more imminent threat to social stability.

Second, the judges’ behavior patterns privilege men in litigation outcomes due to their superior economic capabilities. As mentioned, by law, the bidding process is optional. However, out of efficiency concerns, judges encourage litigants to take this option. This is because bidding provides the most efficient way to fix a price for the matrimonial property. As a result, many women lose their homes. Out of stability concerns, judges also often allow an economically superior man to gain an upper hand in highly contested cases. Men with more cash are allowed to buy out women determined not to be divorced. On the other hand, women, with less economic capability, do not enjoy the same luxury when their husbands are equally steadfast against divorce. Women remain ensnared in the marriage shackles, even though they are desperate for their removal.

Finally, the judges do not alleviate cultural biases against women—rather, they perpetuate them. With such an approach, they accept the patriarchal culture, and reinforce gender inequality, turning a blind eye to cultural bias. Because of their concerns for efficiency and stability, they are reluctant to explore women’s sufferings because of their husbands’ impotency, or even rape committed by their husband’s family members. This is not because the judges are unaware that women’s rights are infringed upon. They just do not want to infuriate or even confront the men.  For their purposes of disposing of the cases efficiently without lingering effects, to do so would be unnecessary.

judges, catering to institutional concerns, consciously and inadvertently, make decisions detrimental to women.

It is thus inadequate to say that the brunt to women in divorce litigation stems only from the incomplete coverage of women’s rights, or vague definitions of key terms in the legislation. It is also not enough to blame the judges’ lack of gender consciousness, or inequalities and biases outside the court. One fundamental reason is that the judges, catering to institutional concerns, consciously and inadvertently, make decisions detrimental to women. Driven by these concerns, they allow the forces of inequality in social, economic, cultural, and political areas to infiltrate their decisions. It is the institutional reasons that prevent the judges from offering a level playing field for women. Equality can only be invoked and fulfilled when the courts have acted. Thus, the institutional failure to enforce the laws has become a major obstacle to gender justice.

This book is based on extensive fieldwork and interviews Xin He has conducted in various court settings over more than a decade. Obtaining access to Chinese courts is difficult, and has recently become even more so. Few outside researchers have attained this level of access. This book is the only study of Chinese divorce cases based on fieldwork conducted inside Chinese courtrooms. Xin He has observed more than 50 trials, and these observations constitute the foremost part of my data.

This book is timely, given the renewed and heightened focus on the rule of law in the official discourse in China on the one hand, and from the awaking gender consciousness on the other. From a doctrinal standpoint, China exemplars gender equality and the freedom of divorce. Yet, how are the laws implemented? What the Chinese courts actually do, and what the consequences are. From a socio-legal perspective, the book highlights the richness, sophistication, and cutting-edge nature of the underlying research. Divorce in China is as much an account of Chinese courts in action as a social ethnography of China in the midst of momentous social change.

HE Xin is Professor at HKU Law Faculty. A pioneer in studying China’s legal systems from a socio-legal perspective, he is one of the most cited China law scholars. His monograph Embedded Courts: Judicial Decision Making in China with Kwai Hang Ng (Cambridge University Press 2017) won “the Distinguished Book Award” by the Asian Law & Society Association and the runner-up of the book prize by the ICON-S (the International Public Law Association). He was awarded the Humanities and Social Sciences Prestigious Fellowship of Hong Kong in 2019.

Find his second monograph, Divorce in China: Institutional Constraints and Gendered Outcomes, published by NYU Press in 2020, here.

How Comprehensive is Chinese Data Protection Law?

1. February 2021
A new paper by Anja Geller

When I told people that I am writing an article about Chinese data protection law, the most common reaction was the question “does that even exist?” The surprised and doubtful undertone motivated me to find a convincing answer. On my way, I encountered some obstacles. There is a plethora of regulations with different scopes, legislation bodies and legal effects. Even for specialised Chinese lawyers, it can be difficult to figure out which norms apply in a certain case. In the end, I chose to restrict my analysis to the 13 most important Chinese regulations with a nationwide scope of application.

Lacking a unified law, these norms have to be seen in combination to determine the comprehensiveness of Chinese data protection law. As the European General Data Protection Regulation (GDPR) is one of the most comprehensive and modern data protection regimes, I used it as a framework. When viewing the Chinese norms against this backdrop, it quickly becomes clear that especially the non-binding norms and drafted provisions are the most progressive and strict ones. They show that the Chinese legislators are moving towards the European system rather than the US or a taking a third way.

However, as is common for such cases of legal orientation, “Chinese characteristics” remain. For example, strong divergences exist in the area of administrative penalties. Instead of a focus on severe monetary penalties similar to the GDPR, there are many different sanctions. Starting with warnings and orders to correct, infringers may face a suspension or closure of their business, revocation of their business licences or even a definitive ban from the profession. Furthermore, measures of “naming and shaming” such as the publication of these sanctions in the “Social Credit Register” and other public announcements may be ordered. Compared to the European medieval equivalent of the pillory, such punishments have a long and living tradition in China. Especially the emerging “Social Credit System” relies on such punishments and is presented as a crucial tool for making citizens and companies comply with the law.

Another “Chinese characteristic” is the “real-name registration” requirement, which has already existed in many other fields for quite some time. Providers of network access and other digital services have to require users to provide true identity information before allowing access. Although this may help law enforcement in digital environments, there are well-founded fears concerning its negative implications on privacy and the freedom of speech.

Nevertheless, there are also a lot of positive developments from a European data protection perspective. The Chinese legislators have been very active in recent times and many new regulations and drafts appear on an annual basis. In fact, on 21 October 2020, one month after the online publication of my article, perhaps the most significant draft was published: the “Law of the People’s Republic of China on the Protection of Personal Information (Draft)” (中华人民共和国个人信息保护法(草案)). In the article, I covered an already very promising draft of the same name, which was proposed by several delegates of the National People’s Congress (NPC) in 2017. The 2020 draft, on the other side, was published by the Standing Committee of the NPC as a whole, which gives it much more weight. Both drafts intend to become the first national “laws” that aim to protect the right to personal information as a primary goal. All other regulations that share this as a central objective are on a lower level in the hierarchy of norms.

A quick comparison of their lengths and the amount of their articles – 70 compared to 44 – suggests that the 2020 draft is even more comprehensive. Among the most striking innovations is the broad extraterritorial applicability of the 2020 draft, which is relatively similar to the GDPR. One could say that reciprocity prevails here. As the introduction of the European rules have led to much discussion and controversy, it will be interesting to see what the international response will be as this draft becomes more widely known. Since a more detailed treatment of this new draft would go beyond the scope of this blog post, I refer to the comparisons here, here and here (all in Chinese), and a comprehensive analysis here (English). When and in which form this draft will be enacted is still unclear. Nonetheless, it shows yet again that the Chinese lawmakers are actively working to create an increasingly comprehensive data protection regime.

Therefore, to the question whether or not a Chinese data protection law exists, the short answer is: yes.

The paper “How Comprehensive Is Chinese Data Protection Law? A Systematisation of Chinese Data Protection Law from a European Perspective” appeared in GRUR International 2020, 1191-1203. It is available via open access here.

Anja Geller is a PhD candidate at the Ludwig-Maximilians-Universität and a junior research fellow at the Max Planck Institute for Innovation and Competition, Munich, Germany. Contact her via Anja.Geller@ip.mpg.de or via Linkedin.

“How has Wuhan achieved this without a vaccine? Anyone?”

11. January 2021
A new paper by Philipp Renninger

Although Wuhan was the first epicenter of COVID-19 (from November 2019), the city managed to effectively control the pandemic. Since April 2020, there have been almost zero new (locally transmitted) COVID-19 cases in Wuhan. The city celebrated this success with a huge pool party in August 2020 and a packed New Year’s Eve 2021, whilst other countries remained locked down due to COVID-19. China’s state media expressed (mischievous) delight, some Western newspapers reacted with anger and jealousy, and other journalists asked the crucial question: “How has Wuhan achieved this without a vaccine? Anyone?”

Searching for legal and juristic answers …

Most legal, political, and medical answers to this question focus on the whole of China, and thus on the measures enacted by the central level. In contrast, the local measures in Wuhan have been scrutinized by few Western and Chinese scholars, perceiving this topic as more sensitive than it should be. Therefore, the media rather than academia covers what happened in Wuhan. This poses a first problem for academic research on COVID-19 in China: The current coverage of Wuhan’s pandemic management is not “legal” and “juristic” enough.

In order to solve this first problem of COVID-19 research, my new paper in the Washington International Law Journals clarifies the legal and juristic basis of Wuhan’s COVID-19 management. I explain both the relevant institutions and the relevant instruments: first, China’s central–local, party–state, and politics–law system in general; second, China’s emergency management system with a focus on public health emergencies (PHE) and pandemics; and third, China’s institutions and instruments designed during the current COVID-19 pandemic. In order to fight COVID-19, the center created the State Council’s Joint Mechanism for COVID-19 Prevention and Control Work (国务院应对新型冠状病毒感染的肺炎疫情联防联控工作机制) as well as the CCP’s Central Leading Group for COVID-19 Work (中央应对新型冠状病毒感染肺炎疫情工作领导小组). Wuhan established a mixed party-state Headquarters for COVID-19 Prevention and Control (武汉市新型冠状病毒感染的肺炎疫情防控指挥部).

When containing COVID-19, Wuhan’s Headquarters primarily employed nonlegal normative documents instead of formal law. Researching these documents faces the obstacle affecting most of China’s local politics and law: the lack of accessibility. Many COVID-19 orders and instructions were never published on Wuhan’s official government website but rather on social media, e.g., WeChat or Weibo. Various COVID-19 documents were published on Wuhan’s official website but deleted afterwards. Fortunately, some remained on the central government ‘s homepage (e.g., this notice). In other cases, photos and scans (e.g., of this notice) or the raw text (e.g., of this notice) survived in the depths of the internet.

… by fructifying social-scientific methods

Yet, these documents do not reveal how the institutions and instruments interacted during the COVID-19 pandemic. How did they manage to control COVID-19? And why did they fail to prevent the pandemic in its early stages? Academic research on these questions deals with a second problem quite contrary to the first one: The available official information on Wuhan’s pandemic management is too “legal” and “juristic, i.e., too formalist. The documents do not provide direct background information on the COVID-19 decision processes inside the party–state, central–local, and politics–law system. The traditional juristic methods of legal interpretation cannot unveil these processes in Wuhan. Therefore, in order to unlock hidden insights, my paper consults the methods of social sciences for inspiration.

A first capable social-scientific method is “analytic narratives”. This method “explains specific events by combining the narrative approach of historians with the analytic tools from rational choice theory” (Mongin 2016). It employs a “narrative to elucidate the principal players, their preferences, the key decision points and possibilities, and the rules of game” (Levi & Weingast 2016). Drawing on this method, my paper identifies the narrative of Wuhan’s COVID-19 management, commanded by Xi Jinping: The central and local institutions must “treat the whole country as a chess game” (“全国一盘棋”).

In containing COVID-19, did China and Wuhan really employ the tactics of Chinese chess (象棋), using institutions and officials like “chess pieces” (illustrated by the picture above)? The answer is yes, as my paper demonstrates by consulting a second capable social-scientific method, “process tracing”. The method “draws descriptive and causal inferences from diagnostic evidence” by tracing processes, i.e., “temporal sequences of events or phenomena” (Collier 2011). This enables my paper to trace a triple “chess move” (horizontal–vertical–horizontal) leading to the Wuhan’s complete shutdown in February 2020. Central state leaders acted as party leaders (horizontal) in order to control the local CCP branches (vertical)—by replacing the party secretaries of Hubei Province and Wuhan City on February 13. The new party secretaries then pressured Wuhan’s local state organs (horizontal) to tighten the city’s “closed management” from February 10 to a real curfew on February 14.

Fructifying social-scientific explanation from a specifically juristic perspective, my findings on China’s “COVID-19 chess” have also gained the attention of the media, e.g., the Frankfurter Allgemeine Zeitung and The Diplomat.

Find the full paper “The ‘People’s Total War on COVID-19’: Urban Pandemic Management Through (Non-)Law in Wuhan, China”, published in the Washington International Law Journal, available via open access here.

Philipp Renninger is a doctoral candidate (cotutelle de thèse) and academic assistant at the Universities of Lucerne (Switzerland) and Freiburg (Germany). In his PhD thesis, Philipp develops a new method of comparative law by the example of Chinese, German, and Swiss public law. Contact him at philipp.renninger@yahoo.com or on Twitter @Phil_Renninger.

Chinese influence – New perspectives on international arbitration regimes

3. January 2021
A new paper by Ulla Liukkunen

Cross-border dispute resolution is changing as a part of the Belt and Road Initiative (BRI) development. With the BRI, Chinese interest in international commercial arbitration has gained a new dimension as BRI promotes the expansion of Chinese dispute resolution institutions and their international competitiveness. Ulla Liukkunen finds that these developments challenge the current narrative of international arbitration, underlining the connection between the legal regime of arbitration and endeavours by the state. In her recent paper (PDF), she explores private international law as a framework for discussion of noteworthy characteristics of the Chinese legal system and legal culture that are present in international commercial arbitration.

The People’s Republic of China has made initiatives to develop a joint dispute resolution circle for BRI countries so that there would be an area in the BRI sphere which offers effective and foreseeable dispute resolution based on jurisdictions close to the disputing parties. In 2016, upon an order by the State Council, Shanghai pressed forward with the creation of an international commercial arbitration system which has since then developed rapidly: The Shanghai International Arbitration Centre has witnessed an increase in the number of cases, and has launched a series of initiatives to promote the development of arbitration. In 2018, the CCP’s Central Committee and the State Council issued an Opinion calling the Supreme People’s Court to set up international commercial courts, to take the lead in setting up a committee of international commercial experts, and to support a BRI-related international commercial dispute resolution mechanism. The aim is that the BRI dispute resolution mechanism would form a convenient, speedy and low-cost “one-stop” dispute resolution centre to provide high-quality and efficient legal services for parties involved in BRI construction.

In the theory of international commercial arbitration, elaboration of a doctrine based on the claimed autonomous nature of international arbitration exists, resting on views of self-standing transnational legal standards that distance arbitration from state-bound laws as well as a state-bound setting. The growing role of China in international arbitration ‒ and the state interest embedded therein ‒ challenges this picture which has been built within international arbitration doctrine and which has resulted in loosening the scene of the role of state law in arbitration.

A rethink of comparative methodology is proposed in order to promote an understanding of Chinese law in the arbitration process. This article argues for adopting micro-macro comparison as a methodological approach in arbitration. Micro-macro comparison as a process penetrates the decision-making of arbitrators, also governing the conflict-of-law dimension.

Moreover, considerations of the Chinese private international law and arbitration regime speak for a broader comparative research perspective towards international commercial arbitration. In the international commercial arbitration frame under scrutiny, we can see the conception of party autonomy placed in a Chinese context where the state is shaping the still relatively young private international law frame for exercise of that freedom and certain institutional structures are advocated where party autonomy is placed. Chinese development underlines the connection between the legal regime of arbitration and endeavours by the state, thereby requiring assessment of party autonomy from the perspective of the regulatory framework of private international law that expresses the complex dichotomy between private and public interests.

The article “Chinese context and complexities — comparative law and private international law facing new normativities in international commercial arbitration” is among the first in the new open access publication Ius Comparatum launched by the International Academy of Comparative Law.

Professor Liukkunen examines international commercial arbitration from the perspective of Chinese developments, noting that, in global terms, the organization of cross-border dispute resolution is changing as a part of the Belt and Road Initiative (BRI) development. With the BRI, Chinese interest in international commercial arbitration has gained a new dimension as BRI promotes the expansion of Chinese dispute resolution institutions and their international competitiveness.

Chinese Lawyers in Politics

1. December 2020
A new paper by Lawrence Liu and Rachel Stern

Mr. Zhou* briskly entered the conference room, shook my hand, and apologized for his tardiness. He had just completed an interview with a state-run newspaper and had lost track of time. I thanked him for squeezing me into his busy schedule, and after a bit of small talk, we began our conversation. As with all of our interviewees, I first asked Mr. Zhou whether being selected as a National Outstanding Lawyer by the All China Lawyers Association (ACLA) had an effect on his work or life. Mr. Zhou took this as an opportunity to mention that he has actually won over 400 government awards. In fact, his legal work and ideas for legal reform have even received recognition from Xi Jinping, and Mr. Zhou pulled up his WeChat profile to show off a photo with President Xi in the foreground and him smiling nearby.

Conversations like the one we had with Mr. Zhou reflect an understudied perspective on the relationship between Chinese lawyers and the Chinese government. Much attention has rightly been paid to the brave activist lawyers who have wielded the law as a tool for social change and to the Chinese government’s increasingly repressive response. Showdowns with the state are not the only ways in which Chinese lawyers engage in politics, however.  

In “State-Adjacent Professionals: How Chinese Lawyers Participate in Political Life,” we focus on a group of “state-adjacent” lawyers that serve as trusted citizen-partners in governance, specifically the lawyers who have won the ACLA’s National Outstanding Lawyer Award. Our research on the 600-plus lawyers who received the Outstanding Lawyer Award between 2005 and 2014 shows that ACLA’s process typically results in the selection of a well-read, domestically educated male with strong ties to China’s bar association. Limited data on awardees’ party affiliations suggest that Outstanding Lawyers are also more likely to be members of the Chinese Communist Party.

To understand how and why Outstanding Lawyers participate in politics, we also interviewed twenty eight award-winners in four Chinese cities. We document how Outstanding Lawyers draw on their legal expertise to make suggestions to officials, sometimes through institutions such as the People’s Congresses and sometimes more informally, such as sharing opinions with officials over dinner. In addition, lawyers’ professional status helps them convince disgruntled clients to play by the political rules, and to funnel their grievances through the courts rather than protesting outside of them. We argue that this is an important form of political participation, which shows how blurry the line can be between the governors and the governed. What do lawyers get out of this type of political participation, which is often voluntary and unpaid? Although we do not discount the potential monetary and reputational benefits, we find that awardees are committed believers in gradual reform through cooperation with government officials.

Of course, there are also limits to state-sanctioned political participation. Not only are there limits on the types of advocacy lawyers can pursue, but also on who gets to participate. Like many opportunities in contemporary China, well-connected, older men are overrepresented among state-adjacent lawyers.

As the number of Chinese professionals continues to grow, will we see other types of “state-adjacent” professionals? We close with the suggestion that the answer is yes. Multiple types of state-adjacent professionals likely will participate in politics by channeling information to the government and persuading citizens to buy into government priorities.   

Find the full paper, published in The China Quaterly and available for free download via open access here.

Lawrence J. Liu is a PhD student in the Jurisprudence and Social Policy Program at Berkeley Law as well as a JD Candidate at Yale Law School. His research interests are in administrative law and regulatory politics, law and globalization, and state-society relations, with a focus on how “law” legitimizes or challenges governance efforts in contemporary China. Follow him on Twitter or contact him at ljliu(at)berkeley.edu.

Rachel E. Stern is a professor of law and political science in the Jurisprudence and Social Policy Program at Berkeley Law, where she currently holds the Fong Chair in China Studies. Her research looks at law in mainland China and Hong Kong, especially the relationship between legal institution building, political space, and professionalization. Follow her on Twitter or contact her at rstern(at)law.berkeley.edu


* Mr. Zhou is a pseudonym for one of our interviewees in Beijing.

What is behind China’s Smart Courts

20. November 2020
A new paper by Wen Xiang and Junlin Peng
 “Hello, I am a robot guide Xiaoyu. How may I help you?”
Litigation service halls of many courts in China have introduced robot guides who, equipped with knowledge on the court, legal consultation service, real-time query of case information, help reduce the service workload of staff.

In recent years, digitalization of courts has been explored actively in theory and practice in China. Mostly referring to “smart court” or “intelligent court”, the digitalization of courts means that litigation activities from case-filing, to court trials be carried out online, with the help of modern technology like big data, cloud computing and artificial intelligence. The effects of the COVID-19 pandemic further spurred the need to accelerate the digitalization of the administration of justice and streamline case handling within the sprawling court system in China. Junlin Peng and Wen Xiang ‘s latest paper in the Nordic Journal for Law and Social Research (available here) elaborates the opportunities and challenges associated with digitalization of courts and provides suggestions based on the analysis.

A large number of cases needs to be dealt with by a relatively small number of judges in China: With the rapid development of economy and a growing awareness of rights and obligations, people increasingly resort to law to solve their disputes. The notorious overload of cases and the lack of capacity inevitably affects the quality and efficiency of case-handling. Moreover, traditional ways of collecting, collating and delivering information undermine judicial efficiency. Therefore, the digitalization of courts is expected to contribute to the following: improving judicial efficiency, contributing to judicial transparency, providing convenient services and establishing judicial big data. However, challenges emerge. For instance, how to set the scope of application of technology? Do remote trials violate the Principle of Direct and Verbal Trial? How can electronic services ensure a fair procedure and the litigants’ right to know? This paper shows that some achievements have been made, but court digitalization is still in its infancy in China. It is a phenomenon where practice precedes law, which means there lacks of legislative support and legal theoretical research on informatization of courts. Technological innovations and the scope of their applications require further debate, or else will undermine the legitimacy of digital judiciary.

In particular, the following applications are observed:

Electronic case-filing

According to Article 14 of the Supreme People’s Court’s Rules on Several Issues on Case-filing Registration System, in order to facilitate litigants to exercise litigious rights, courts provide litigation services such as case-filing online systems.  So far, many courts in China have actively explored and established an E-filing system, which enables clients to conveniently file a case online. The main concern about E-filing is false litigation. Judges have voiced their concern that they cannot verify the identification of parties and censor the authenticity of litigation materials, leading to an abuse of litigation rights.

Remote trial

Legislation on remote trial is limited. Article 259 of Judicial Interpretation of Civil Procedure Law of People’s Republic of China (hereinafter referred to as Interpretation of Civil Procedure Law)  stipulates that for simplified procedures (简易程序), with the consent of both parties and permission of the People’s Court, the audiovisual transmission technology may be used to hold a court session. According to Article 73 of Civil Procedure Law, with the permission of the People’s Court, witnesses may testify through audiovisual transmission technology under the following circumstances: inability to attend court due to health reasons, traffic inconvenience, and force majeure such as natural disasters and other valid causes. However, there is no provision relevant to remote trial in Criminal Procedure Law.

At present, practices of remote trial across the country are pioneering endeavours with little legislative support and theoretical research. Practices of courts in various areas are diverse, we thus observe Jilin Province as an exampl: Jilin e-court is equipped with a cloud conference system which can be used for remote trial in case where litigants, witnesses and appraisers cannot go to the court. Before the beginning of the trial, the litigants are expected to log on to the website of Jilin e-court and enter into the cloud conference system at appointed time. The judge will initiate the cloud conference on the court intranet. There are no strict limits for the types of cases which remote trials may be used for. In practice, it is mainly applied in for simplified procedures (简易程序) and in first instance trials of ordinary and special procedures.  In addition, there is no need for both parties to reach an agreement on whether or not to conduct the trial remotely; either party can apply for a remote trial.  Thus, one party can participate in court trial through cloud conference system and the other party may go to the court to attend the trial in the traditional way.

Intelligent execution

In China, 80%-90% of the cases of judicial corruption appear in the field of execution, and 80%-90% of corruption in the field of execution appears in judicial auctions.  If the parties waive the right to choose an auction agency, the court has the right to entrust one. Driven by high commission interest, the auction agency may distribute 40% of the commission to the judge in order to be entrusted by the court.  Besides, the traditional way of judicial auction leads to a limited range of auction information dissemination, so that only a few people obtain auction information and participate. A small number of people participating in judicial auctions and a relative short auction time results in a low hammer price, which impairs the legitimate interests of the creditor and the executed person. In order to eliminate these drawbacks of traditional judicial auctions, courts in Shanghai, Chongqing and Zhejiang are actively exploring online judicial auction (E-auction).

E-auction refers to a model of judicial auction where courts can handle executable property publicly by means of online auction through an auction platform.  Among the three models courts across the country experimented with, the model where courts carry out judicial auctions directly on an Internet auction platform without the participation of an auction agency is most widely used. Since June 2012, more than 1400 courts in 28 provinces have independently conducted judicial auctions online, carrying out 250,000 judicial auctions with the value of the executed property amounting to 150 billion RMB.  According to Article 12 of Regulations on Judicial Auction Online, the judicial auction online should be announced in advance: the auction of movable property shall be announced 15 days before the auction and auction of immovable property shall be announced 30 days before the auction. To ensure bidders’ full participation in bidding, the Regulations of the Supreme People‘s Court on Issues Concerning Judicial Auction Online (Herein referred as Regulations on Judicial Auction Online) requires that the bidding time is no less than 24 hours. Judicial auction online not only lets more people participate in bidding but also furthers the transparency and justice of judicial auction. Article 3 of the Regulations on Judicial Auction Online stipulates that the judicial auction online should be open to the public on the Internet auction platform and be subject to social supervision. With the public being able to supervise the entire auction process online, doubts concerning the fairness of the auction can be eliminated to some extent.

Find the full paper here.

Wen Xiang (corresponding author) is an Assistant Professor and S.C.Van Fellow of Chinese Law at iCourts (Centre of Excellence for International Courts), Faculty of Law, University of Copenhagen. Wen Xiang was a guest lecturer at Harvard Kennedy School and a visiting scholar at Duke University School of Law. Contact him on LinkedIn.

Junlin Peng obtained a bachelor degree in law from Beijing Normal University and a master degree in law from University of Copenhagen. She attended summer school of Georgetown University and exchanged to University of Milan and University of Stockholm. Contact her at junlinpeng[at]163.com.

Economic Development through Migration: Facilitating Skilled Migration to China through the Belt and Road Initiative

5. November 2020
A new paper by Eva Lena Richter

Contributing to the “China, Law and Development” research project, Eva Lena Richter‘s latest research observes Chinese and multilateral efforts to facilitate skilled migration from Belt and Road Initiative countries to China. Since the launch of the Initiative, strengthening people-to-people ties is part of its cooperation priorities. This cooperation is established in different ways, including student and academic exchanges, research cooperation, joint vocational training, and tourism. The Chinese government is the major guiding force of the Initiative and hence also shapes how these exchanges, or rather forms of migration, develop between China and Belt and Road Initiative-countries. 

This paper (a free draft version here) looks at student, academic, and personnel mobility from Belt and Road Initiative countries to China and forms of migration and national Chinese legislation as well as efforts in bilateral and multilateral cooperation to facilitate them. Is the promise of mutually beneficial development tangible in these efforts? What role does China occupy in shaping the way migration develops along the Belt and Road Initiative? What role does Chinese skilled immigration legislation play? These are some of the questions this paper addresses. 

The findings suggest that new skilled Chinese migration legislation, geared towards foreigners with tertiary education, paired with Belt and Road Initiative cooperation efforts and visa facilitation, is opening comparatively more opportunities for skilled nationals of BRI countries. BRI nationals are more often exempt from visas and have access to targeted talent attraction and retention programs. Nevertheless, up to now, these efforts have been mainly undertaken by the Chinese government, and skilled Belt and Road Initiative nationals are not being encouraged to migrate to China under bilateral employment agreements. For now, the bulk of China’s skilled immigrants does not come from Belt and Road Initiative countries. 

Eva Lena Richter is a PhD Candidate at Cologne University’s Chair for Chinese Legal Culture and a Research Associate with the “China, Law and Development”-project, University of Oxford. She focusses on China’s legal system for skilled labour migration and efforts to attract and retain skilled foreigners in China. Get in touch with her on Linkedin.

How to Build Your Municipal Social Credit System

26. October 2020

‘The trustworthy shall roam everywhere under heaven, while those who breach trust shall not be able to move a single step’ is the underlying maxim of China’s Social Credit System (SCS) project. Taking a step closer to understand what is behind this rhetoric quickly reveals that the SCS is better to be spoken of in plural, and the initiatives proliferating under it include projects as various as commercial loyalty programs, market regulation measures, and judicial enforcement mechanisms. But what does the central government envision in terms of a comprehensive system? We may find answers by looking at how the central government organs in charge of SCS building regularly assess the progress of the pioneers, cities. This is done through quantified criteria, so called SCS Construction Assessment Indicators. They offer a rare comprehensive depiction of how the perfect municipal SCS looks like in the eyes of the central planners. Based on these criteria, Marianne von Blomberg lays out what it takes to build a municipal SCS.

The National Development and Reform Commission and the People’s Bank of China, two major players in SCS creation, annually issue assessment indicators to evaluate the progress cities make on that front. Those performing best are designated “SCS construction model cities” (社会信用体系建设示范城市). Each of the twelve indicators in every set deals with what may be understood as one construction site within the larger SCS project. This is how they work: For progress on each site, cities get points. Further, a set of “hard indicators” includes ten concrete goals “which all must be completed without exception”. They may be regarded as centrally designed manuals for municipal SCS building which are handed to local leaders.

Filling a gap between the broadly termed conceptual central documents and the orders, legislation and specifications scattered across localities and realms which each relate to one of the SCS’s many parts, they are a rare official depiction of the whole SCS which is, moreover, translated into concrete criteria.

Step 1: Build your infrastructure for credit information production & sharing

The code: Under the unified social credit code, the gathered credit information is allotted to the then credit subjects. Issuing this code to legal persons and other organizations is a first fundamental element in SCS construction that reappears in all sets of indicators with the bar to earn points being raised throughout the years.

The records: Credit information is stored in credit records (信用记录, sometimes: sincerity files 诚信档案) that are to be set up by departments in charge of more than 21 realms as various as tax collection, construction, transport, e-commerce, birth control, education and research, environmental protection, law firms and lawyers, notaries, and for civil servants. In addition, the judiciary and providers of public utilities such as water, electricity and telecommunication are to gather and share information. What amounts to credit information differs across localities and administrations, it is commonly stipulated in credit information catalogues (find an example of such a catalogue here). As of 2019, Hangzhou has collected 140 million pieces of credit information, Suzhou has collected 350 million pieces, and Nanjing 1,4 billion (Zhu Lili 祝丽丽 2019).

The platform: Such credit information, once gathered, is directly to be forwarded to the credit information sharing platform (信用信息共享平台). The indicators of 2016 were the last to ask for the creation of such a platform, it was in the following years treated as given prerequisite. Its vital role in the system is illustrated by the fact that approximately one fourth of all points can only be attained if the platform is constructed. One indicator reads: “0.5 points are deducted for every city-level unit that is not connected to the credit sharing platform and sharing their information”. However, the experience of SCS construction model city Zhengzhou shows that linking up the platform with the sources of information such as administrative departments and providers of public utilities is a significant challenge.

Step 2: Make trustworthiness records the basis for decision-making in public administration

Joint reward and punishment: Joint reward and punishment (联合奖惩) refers to the realization of punishments and rewards in one realm to those entities who have been enlisted for trust-breaking or exemplary trustworthy behaviour in another realm. The ban to book high-speed trains for those who have defaulted on court judgments is an example. Joint reward and punishment was, upon the announcement of the first batch of model cities described as the “ring in the bull’s nose” of SCS construction, that, if being taken care of, will “cause all smaller things to follow.” Correspondingly, it has steadily gained importance in the indicators: 11% of all points in 2017 are to be achieved by implementing joint reward and punishment, jumping to 21% in 2018, and to 22% in 2019. Cities can gain points for example for each case where joint punishment was meted out against a trust-breaking entity or where benefits materialized for the red-listed, as well as for institutionalization of joint reward and punishment, meaning its integration in information systems and work procedures. Hard indicator 11 requires that “the number of realms where the city implements joint reward and punishment is not less than the respective number of realms at national level”.

Regulation by credit classification (信用分级分类监管) refers to adjusting the intensity of market regulation measures, such as random inspections, to the credit status of the relevant subject. Regulation by credit classification is on the ascendant, with a rise in proportional value within the respective sets of indicators of 9%, to 17%, to 22% from 2017-2019. This “novel type of regulation” is not only overhauling traditional market regulation but increasingly a tool for administrative agencies concerned with other realms. Since 2017 it has been woven into other indicator groups such as commercial sincerity, social sincerity and judicial credibility construction.

Step 3: Foster a market for credit products for individuals that make use of public credit information

A score: A municipal social credit score is to be set up for the respective city’s residents using their social credit information (this is what in Hangzhou is called the Qian River Score, in Fuzhou the Jasmin Score, in Suzhou the Osmanthus Score, etc). Through the “credit+ programs” enumerated below, public credit information translated into the score indeed follows a subject into numerous areas in daily life- in a rewarding manner.

Credit+ programs: Integrating market forces has helped to develop credit products that are to be used by local administrations in their daily work so that social credit information directly impacts how convenient a citizen’s everyday life is. In the 2017 indicators still vaguely termed “sincerity conveniences in public service”, the concept has matured into fully-fledged programs such as “credit easing procedure” (信易批) in the course of which administrative agencies tolerate the lack of secondary documents when proceeding requests of high-scorers. Likewise, “internet+credit+medical treatment”, “internet+credit+elderly care”, “credit easing transport” and “credit easing loans”, to name just a few of those programs enumerated in the latest set of indicators, allow high-scoring subjects certain privileges such as fast track handling of paperwork at hospitals.

Step 4: Equip your SCS with remedial paths- or don’t

From a legal point of view it appears striking that the objection procedures laid out at some length in province-level social credit regulations and recently reemphasized by the latest central level SCS guideline are not mentioned throughout the indicators. A careful deduction we can draw from that and the fact that the author could not yet find legal cases involving relevant provisions is that the focus of municipal SCS building lies on pushing forward the system’s coverage first.

Credit Repair: Not strictly speaking a remedial measure, credit repair (信用修复) refers to a procedure with the help of which credit subjects can have unfavourable credit information deleted and relevant punishment halted. They are required to eliminate all damages caused by their “untrustworthy” behaviour, or where that is not applicable, undergo “credit repair trainings”. The indicators award points to cities for cases of successfully completed trainings (possible in online formats and without final exam, making them easily circumventable) and the de-blacklisting of entities as a result of such.

Step 5: Make sure your city has a sound financial environment

Interestingly, the indicator on constructing a trustworthy financial eco-system seems to be standing on its own- other than the other indicators, it makes no mention of the credit sharing platform, blacklists, credit records, regulation by credit classification or other central SCS tools. Instead, points are given to cities on the bases of whether normatively, the level of trustworthiness is high. For instance, where no significant regional financial risk has occurred, the 2019 Indicators award two points. While most of the indicators seek to have a system of dealing with specific trust-related problems set up, the indicator on the financial eco-system is less concerned with SCS infrastructure building, but with the greater goal to achieve a more trustworthy financial environment. Further, this indicator alone is to be evaluated not by the assessment groups that handle the other indicators but by the PBoC alone.

Extras

Political ideology: It is less helpful for municipal SCS designers aiming for the title of SCS model city to put much effort on living up to political rhetoric. While the indicators do mention the ubiquitous Xi Jinping Thought, implementing the CPCCC’s and the State Council’s directives on the SCS (all eleven of them which are enlisted, translations here), and Socialist Core Values- The relevance of these elements in relation to the other indicators shrank from 11% in 2017 to 8% in 2018 and 2019, the 2016 indicators and the hard Indicators do not mention them at all.

Innovations and making use of local specialities: Notably, not even this indicator that explicitly encourages experimentation and lists examples mentions the application of AI and other technology that is frequently associated with the SCS. Indeed, the most high-tech element the indicators lay down is the building of the information sharing platform and credit websites. Most technological innovation for municipal SCSs appears to happen within the private sector: Cities gain points for fostering a market of credit products. How such products may eventually be “incorporated” into the larger, centrally driven project was demonstrated in early 2018: The PRC’s first credit scoring services that were given licenses to experiment with their products did not get the license in the end but were made minority shareholders of one PBoC-lead Credit Scoring entity called Baihang Zhengxin (百行征信, the whole story).

Marianne von Blomberg is a PhD Candidate at Zhejiang University’s Law School and Cologne University’s Chair for Chinese Legal Culture and working as a Research Associate with the latter. She is particularly interested in the intersections of the law and social credit and recently focuses on reputational sanctions within the Social Credit System. Get in touch with her on LinkedIn or follow her on Twitter.

Chinese Legal Professionals and Gender Equality

20. October 2020
A new paper by Helle Blomquist
Fading propaganda: “Raise Women’s Status” (tigao funü diwei), spotted in Chaoxing, Zhejiang Province

The notorious gap between socialist ideals of gender equality on the one hand, and the patriarchal reality in the People’s Republic on the other has not been bridged by economic development: Particularly when it comes to political participation, women remain underrepresented. In a small but insightful case study (PDF available here), Helle Blomquist asked in how far legal professionals may play a helpful role to end the severe gender inequalities in Chinese society.

My case study in a Chinese provincial city has given me hopes for the Chinese legal profession and its work for the advancement of gender equality as a value in the modern Chinese state. If gender equality is a goal, lawyers in China may facilitate progress towards this goal in the Chinese population. They may accomplish this through communicating values of gender equality to their clients and thereby presenting feasible options that empower women. In doing so, they function as intermediaries between the modern state with a Marxist ideology of equality and a population with traditional values.

Why is this interesting? Over the years, Western Chinese studies have shown that even though the Chinese government has implemented laws to advance equality, culture has been a drawback. Equality is part-and-parcel of Marxist ideology, as Simone de Beauvoir’s works demonstrates. However, the cleavage between the high-flying Chinese government policy and a traditional population in some cases is too wide. The main finding from my case study points to legal professionals as a ‘missing link’ to bridge this cleavage. Their function however may depend on their individual awareness of their role, their support of gender equality, and their position vis-à-vis the state and party.

The professionals had varied positions: one law professor, a judge, a practicing lawyer, and two project workers. The law professor runs a legal clinic, where she influenced her students and suggested solutions for the clients seeking advice to solve their legal conflicts. The project workers aimed to empower villagers to organize. Both, the project workers and the law professor found solutions for their clients, based on the law and advancing the maximum of equality within the law. They planned their consulting sessions in a way that would encourage women to seek their own solutions and investigate their rights under the law rather than resorting to traditional mechanisms. The judge decided on divorce cases and she had the same aim, but saw herself limited by the law. The practicing lawyer represented clients at court in criminal and commercial cases. He also communicated gender values, even if more traditional ones. A reaction from a law student demonstrated that this made an imprint on her, thereby demonstrating that communication of values matter, in the case of the practicing lawyer the effect would more likely advance barriers against gender equality.

This brings me to the drawbacks I found. Firstly, the bias of the legal professional may influence the values communicated, independent of government policy. Other drawbacks are more subtle. In analyzing them, I drew on classical sociological theory, namely Talcott Parsons’ idea of malfunctions. The legal professional may be under pressure from the state, as for instance the judge in my sample, and in this resort to formalism that will impair her ability to communicate equality. The project worker may identify with his or her clients and exaggerate the client’s case. A practicing lawyer may be likely to adopt a position of self-interest and try to act as gatekeeper to the profession.

A case study cannot reveal anything concerning the extent of the findings, of course. I conducted my study in a single city at a specific time. The practice I detected may change, and it may turn out differently in other cities and government policy and pressures may change. However, my case study showed a potential. 

You may find the whole paper, as published in the Naveiñ Reet, Nordic Journal of Law and Social Research (NNJLSR), No. 9, 2020 here.