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Month: June 2021

Archipelagos of Chinese Law

25. June 2021
A new paper by Matthew Erie
Dahlak Archipelago (Wikimedia Commons)

On May 20, 2021, the Sri Lankan government passed the controversial Colombo Port City Economic Zone Bill (Port City Bill), creating the country’s first special economic zone (SEZ) for services-oriented industries. Parliament’s passing of the bill occurred days after the Supreme Court ruled that several provisions of the Port City Bill were unconstitutional, requiring amendments. The heart of the controversy was the creation of a commission of unelected members who would have broad powers over the SEZ, an innovation that contravened the authority of regulators and, as it has been argued, violated Sri Lankan sovereignty as enshrined in its constitution. More specifically, the SEZ is funded and developed by a subsidiary of China Communications Construction Company, which invested $1.4 billion to construct the SEZ in exchange for a 99-year lease from the Sri Lankan government. As a result of this controversy, the Port City Bill was amended such that five of the seven commission members have to be Sri Lankan.

Unaddressed by the Supreme Court, however, was a seemingly more innocuous but nonetheless potentially far-reaching problem: the bill’s dispute resolution provisions. The Port City Bill proposed to establish an International Commercial Dispute Resolution Centre (ICDRC) that uses arbitration to settle disputes within the SEZ, effectively ousting the jurisdiction of Sri Lankan courts. This ouster is contentious given that the courts have, in the past, held that legislation cannot oust its jurisdiction. Still, the ICDRC survived judicial scrutiny and was passed into law.

The Port City Bill and the ICDRC, in particular, exemplify a particular logic of outbound Chinese capital, one that, in my recent article based on three years of fieldwork and nearly 150 interviews, I summarize as “Chinese law and development” (CLD). Whereas previous capital-exporting countries, and in particular, the U.S., have sought to reform the legal system of host states, often in line with their own experience of law, Chinese parties are mostly not interested in engaging in the legal reform of host states. Rather, they have shown a greater interest in creating institutions of transnational law, including international arbitration centers—both within the People’s Republic of China and outside its territory—that can avoid Chinese companies from having to litigate in host state courts.  

Opening Ceremony Colombo Port City Project (Public Ownership)

Taking a step back, “law and development” most generically refers to the relationship between law and economic development in what used to be called the “Third World,” and is particularly understood as technical legal development assistance as provided by donor states to host ones. The career of David Trubek at the University of Wisconsin Law School is most commonly associated with the U.S. experience of law and development, one that has undergone a series of waves. Chinese law and development (CLD) is different from Trubek’s view of the notion. For the most part, the Chinese government does not send out legal technicians to advise foreign states on how to design legal institutions or draft legislation, efforts under-girded by assumptions about the capacity of law to stimulate economic growth.

Instead of popular accounts that envision China as hegemonic, and roughly analogous to previous economic superpowers, China is emerging into the world economy during a period of widespread anxiety about Chinese influence, anxiety that takes the form of investment screening, trade tariffs, and immigration blockades. Further, China’s own experience with legal reform shows how law offered one set of norms, among others (e.g., administrative directives, dictates of the Chinese Communist Party, political campaigns, etc.) that facilitated (and sometimes impeded) economic experimentation. CLD thus addresses how the Chinese government and Chinese enterprises protect their assets, investments, and personnel in challenging legal and regulatory environments. To do so, CLD unzips the toolkit of such Chinese parties to demonstrate the plurality of means by which they secure their commercial and also geo-economic interests.

The co-creation of what elsewhere I have called “exceptional zones” such as SEZs with their own dispute resolution mechanisms that feature rules different from those of the host jurisdiction is one such method. In addition to Sri Lanka, there are other extraterritorial examples, such as that of the China-Africa Joint Arbitration Centre. These jurisdictional archipelagos foster transnational law by allowing parties to opt out of the national law of host states and choose alternative law, which theoretically could be Chinese law. Hence, issues of governing law in contracts that are the basis of disputes, as well as language of arbitration, nationality of arbitrators, and related procedural issues, loom large as these new legal hubs start to accept cases. While these archipelagos are not unique to Chinese outbound capital, Chinese parties seem to be particularly focused on their promotion. More broadly, CLD raises important questions concerning how exceptional zones impact legal development and access to justice in emerging economies.

Matthew Erie’s paper ‘Chinese Law and Development’ was published in the Harvard International Law Journal earlier this year and is available for free here.

Matthew S. Erie is an Associate Professor, Member of the Law Faculty, and Associate Research Fellow at the Centre for Socio-Legal Studies at the University of Oxford. He is also the Principal Investigator of the “China, Law and Development” project (grant agreement No 803763), based at the University of Oxford. You can follow him on Twitter @MatthewErie or reach out to him at matthew.erie(at)law.ox.ac.uk.

General Arbitration Centre, Colombo Port City Bill, International Commercial Dispute Resolution, Law and Development, One Belt One Road, Special Economic Zone, Sri Lanka, Transnational law

Hong Kong Between ‘One Country’ and ‘Two Systems’

14. June 2021
A forthcoming book by Larry Catá Backer
Hong Kong Tram with National Security Law Government Campaign (Wikimedia Commons)

Hong Kong Between “One Country” and “Two Systems” examines the battle of ideas that started with the June 2019 anti-extradition law protests and ended with the enactment of the National Security and National Anthem Laws a year later. At the center of these battles was the “One Country, Two Systems” principle. By June 2020, the meaning of that principle was highly contested, with Chinese authorities taking decisive steps to implement their own understanding of the principle and its normative foundations, and the international community taking countermeasures. As events progressed between June 2019 and June 2020, the author devised a series of essays that analytically chronicle the discursive battles that were fought, won and lost. Without an underlying political or polemical agenda, the essays retain the freshness of the moment, reflecting the uncertainties of those times as events unfolded. What was won on the streets of Hong Kong from June to December 2019, namely, the public and physical manifestation of a principled internationalist and liberal democratic narrative of self-determination, and of civil and political rights, was lost by June 2020 within a cage of authoritative legality legitimated through the resurgence of the normative authority of the state and the application of a strong and coherent expression of the principled narrative of its Marxist-Leninist constitutional order. Ironically enough, both political ideologies emerged stronger and more coherent from the conflict, each now better prepared for the next one.

Book Front Cover (Courtesy of the Publisher)

The essays written between June 2019 and June 2020 are compiled in Hong Kong Between “One Country” and “Two Systems” with little change to how they were originally written. The book is presented as a diary with essays as diary entries. This is to mark an intellectual progression that matches the development of Hong Kong’s political turmoil. The object is to capture not just the strategic and normative developments that produced Hong Kong’s new order from June 2020, but also to give a sense of the uncertainties and anticipations that existed leading up that moment. The process of ideological genesis from June 2019 to June 2020 is most immediately captured from a state of anticipation without the benefit of foresight. It is that immediacy that adds a layer of analysis to the usual post facto accounting and examination of events. That layering, anyway, is the aim. The essays in Hong Kong Between “One Country” and “Two Systems”, then, do not look back on events after the fact, but speculate, discover, and capture moments that from June 2020 look inevitable but which from the perspective of June 2019 appeared far less so. By doing so the book aims to retain the freshness of the moment. It is, thus, both a journal of events, and a journey. For its readers it may serve as a record of how the way of thinking about the situation of Hong Kong changed radically over such a short period of time. It is also, in part, a chronicle of the way in which larger events—the US-China trade war, and the COVID19 pandemic—can have a substantial effect on what would otherwise be a localized affair.

The focus of the book is on discourse. The essays follow events as they unfolded through the rhetoric of the parties involved–their statements, their gestures, their performances on the streets, and ultimately the memorialization of these discourses in the landmark laws of the Hong Kong after June 2020–the National Anthem Law and the National Security Law. To some extent this discursive focus owes a debt to and might be comfortably embedded within analytic traditions that owe much to the insights of Guiguzi (鬼谷子) and its rhetoric,[1] which makes its appearance throughout the essays and perhaps binds them together into something more coherent. These insights frame some of the analysis, as do the insights of critical thinkers from the Western tradition.

June 2019 protests in Hong Kong (Studio Incendo)

Hong Kong Between “One Country” and “Two Systems” is organized into six parts. Part I (Epilogue as Introduction) starts at the end of the story. It uses a rare statement endorsed by a substantial majority of the representatives of the United Nations Human Rights special procedures calling for the development of decisive measures to protect human rights in the face of the enactment by Chinese authorities of the National Security Law for Hong Kong. This is to situate the story of Hong Kong between June 2019 and June 2020 from the perspective of the international community–perhaps among the actors most adversely affected by the story of Hong Kong.

Part II consists of eleven chapter essays. These essays take the reader from the beginning of the protests in June 2019 to the end of August 2019. The essays serve as an analytical witness to the development of the initial phase of the Hong Kong protests. Step by step, as it occurred, Part II considers the escalations of ambitions and tactics of the protesters, the growing intransigence of local officials, and the start of what would become an elaborate and largely effective counter position of the Chinese central authorities. Much of what occurred during these early weeks provided the foundation for everything that developed thereafter.

Part III consists of seven essays. The essays chronicle critical events taking place from the beginning of September to the end of November 2019. These take the reader through the next phase of development, one in which initial positions are fully developed and hardened. Here one sees fully developed the ideological position of the central authorities that in retrospect were faithfully memorialized in the National Anthem Law, the National Security Law, and recent amendments to the Election rules in the Hong Kong Basic Law in March 2021. At the same time, one encounters here the maturing of an aligned position of the various groups of protesters that sought to deepen the internationalization of their movement and preserve efforts to permanently protect a measure of liberal democratic order in Hong Kong. Lastly, the international response also developed in this period: grounded first in the narrow strictures of the Sino-British Joint Declaration and thereafter in general fundamental principles of self-determination and the international civil and political rights of coherent political communities.

Part IV then considers two stalemates. Firstly, three essays cover the relatively short period of stalemate between December 2019 and April 2020 which includes the apex of protester power in December 2019 and January 2020. Secondly, the stalemate imposed by the realities of the worldwide COVID-19 pandemic. One moves here from the unabated storm of protest to the opportunity that the pandemic provides local and national authorities to break the stalemate in their favor. It was during this period that the stakes around the proper conceptualization of the One Country Two Systems principle became clear. On one side were central authorities who now fully developed the construct of the principle as a means of permitting autonomy within the discretionary authority of the state. On the other were the protesters and the international community who now saw in One Country Two Systems a principle of divided sovereignty in which the political choices of the Hong Kong community could be protected against encroachment by the central authorities, one based on international liberal democratic and human rights principles.

Part V chronicles the end of the protest movement and the emergence of a “new” Hong Kong between May and July 2020. Its seven essays critically chronicle the way that the central authorities drove events from May 2020, in a way that paralleled how protesters drove events between June and September 2019. Part V starts with the announcement of an intention to impose the National Security Law, by first devising the National Anthem Law and then ending with the adoption of the National Security Law itself. The seven essays here consider the importance in developing a patriotic front as a means of dividing and managing the people of Hong Kong, and consider the relatively little opposition that the central authorities faced in realizing their objectives.

The single essay that makes up Part VI serves as the after-word of Hong Kong’s story. Part VI is meant not only to end the story of the protests in Hong Kong but also to begin the story of Hong Kong as a more integrated part of the Pearl River area of China. No longer an international city in the sense of being internationally recognized and having a protected legal autonomy from its territorial sovereign, Hong Kong now rejoins the nation as a Chinese city with substantial international connections. Beyond that, Hong Kong’s future is now far more closely aligned with that of the Chinese heartland and with the vision of China’s central authorities for the nation as a whole.

The publisher, Little Sir Press, will be hosting a book launch author meets reader webinar on 13 July 2021.  Registration is required but free. Free chapters and more about Hong Kong Between ‘One Country’ and ‘Two Systems is available here. 

Larry Catá Backer is the W. Richard and Mary Eshelman Faculty Scholar, Professor of Law and International Affairs at Pennsylvania State University (B.A. Brandeis University; M.P.P. Harvard University Kennedy School of Government; J.D. Columbia University). He researches in the areas of Marxist Leninist political-economic systems with a focus on China and Cuba, economic globalization, corporate social responsibility, international affairs, global governance, trade and finance, and semiotics. In addition to his own books, Backer has published over one hundred articles and book chapters in journals in the U.S., Latin Americas, China, and Europe. For a list of his publications, please click here. Backer also runs his own blog, Law at the End of the Day. 


[1] Guiguzi (鬼谷子), Guiguzi: China’s First Treatise on Rhetoric; A Critical Translation and Commentary (Hui Wu (trans.); Carbondale: Southern Illinois University Press, 2016 (before 220 A.D.))

General Hong Kong, National Security Law, One Country Two Systems

China’s Law and Development: The Case of the China International Commercial Court

6. June 2021
A new paper by Weixia Gu
Appointment of the First Batch of CICC International Commercial Experts Committee

In June 2018, the China International Commercial Court (CICC) was established within China’s Supreme People’s Court. It is a top-down capacity-building effort in establishing dispute resolution infrastructure and represents the ambition to create a lex mercatoria in the context of the Belt and Road Initiative (BRI). This blogpost highlights some salient features of the CICC and sheds light on its significance in China’s Law and Development.

First, CICC installed an International Commercial Experts Committee (ICEC) to make up for the lack of non-Mainland Chinese judges among its personnel. It draws on experts from both civil law and common law jurisdictions with diverse backgrounds (Eastern, Western and African legal culture). Members of the ICEC will provide foreign legal expertise to engage in the CICC mediation work, the outcome of which could be turned into a CICC judgement equivalent to “semi adjudication.” The ICEC has two main functions: first, presiding over mediation proceedings of international commercial cases which can be converted into a CICC judgement; second, providing advisory opinions on proof of foreign law and on international treaties, international commercial rules. The ICEC is argued as emblematic of the “paradigm shift” of the Beijing Consensus which traditionally emphasises soft law in international legal ordering such as what has happened in the Belt and Road context. Scholars have argued about a rising new Chinese economic legal order that is characterized by China’s decentralized mode of trade governance through a pragmatic, incremental development policy grounded in soft law and norm-based networks (Shaffer & Gao 2020). This is shown in China’s approach toward the BRI (yidaiyilu 一带一路) as China largely relies on memoranda of understanding and soft law agreements. There is no stringent cross-border legal framework or rigid regulatory structure in China’s approach toward the BRI. The advent of the ICEC however points to a new focus on institution-building which is somewhat a departure of the previous soft-law approach. Apart from that, the ICEC also showcases a breakthrough in the Chinese legal system in light of the existing statutory impediments found in, for example, China’s Judges Law, which allows only Mainland Chinese nationals to sit on the Chinese judicial benches. It reflects a more proactive, experimental, and innovative mentality adopted by the Chinese government and judiciary in seeking to incorporate overseas judicial expertise so as to compete in the global dispute resolution market.

The CICC signifies China’s major step towards a dual-track model which places equal emphasis on both soft-law instruments and hard-law capacity-building of legal infrastructure. Second, the CICC brands itself as a “one-stop shop” for diversified dispute resolution, incorporating alternative dispute resolutions (ADRs) into conventional litigation. Under this vision, international commercial litigation, arbitration and mediation are blended and integrated to facilitate the resolution of international commercial disputes brought before the CICC. The CICC also links with China’s five most market-driven arbitration institutions – China International Economic and Trade Arbitration (CIETAC), Beijing Arbitration Commission (BAC), Shenzhen Court of International Arbitration (SCIA), Shanghai International Arbitration Centre (SHIAC), China Maritime Arbitration Commission (CMAC), and two leading commercial mediation institutions – China Council for the Promotion of International Trade (CCPIT) Mediation Center and Shanghai Commercial Mediation Centre (SCMC). If disputing parties have reached a mediation settlement agreement before the CCPIT Mediation Center or SCMC, the CICC may also make a CICC judgment based on the mediation agreement if it is requested by the parties. This conversion of the institutional mediation settlement agreement into a CICC judgment is an unprecedented arrangement, evidencing the experimental and law-positive nature of China’s approach to the BRI and the new Beijing Consensus.

From the Law and Development perspective, the establishment of the CICC exemplifies a turning point in the Beijing Consensus to move away from the heavy reliance on norm-based instruments in international legal ordering.

Third, the CICC has a guaranteed caseload. Structurally, the CICC is within the hierarchy of the Chinese domestic judiciary. It forms part of China’s Supreme People’s Court of which both the first CICC in Shenzhen and the second CICC in Xi’an are permanent branches. Flowing from this structure, it is ensured that the CICC continuously has a high caseload as the Supreme People’s Court in Beijing directly refers cases to them. In fact, the case flow under the CICC Provisions includes “other international commercial cases that the Supreme People’s Court considers appropriate to be tried by the CICC.” (Provisions of the Supreme People’s Court on Several Issues Regarding the Establishment of the International Commercial Court, Article 2(5), English here). Comparative studies show that the feature of “rooting” the international commercial courts within the domestic judicial system is similarly found in other jurisdictions, such as the Singapore International Commercial Court and the Chamber for International Commercial Disputes of the Frankfurt Regional Court in Germany.

The establishment of the CICC arguably represents a paradigm shift of the “Beijing Consensus”, which traditionally placed emphasis on informal alternatives to law (i.e. a soft-law and norm-based approach). The CICC signifies China’s major step towards a dual-track model which places equal emphasis on both soft-law instruments and hard-law capacity-building of legal infrastructure. From the Law and Development perspective, the establishment of the CICC exemplifies a turning point in the Beijing Consensus to move away from the heavy reliance on norm-based instruments in international legal ordering (such as Memorandum of Understandings, Memorandum of Agreements, Joint Statements etc. involved in the BRI) to hard-law institutional infrastructure capacity-building.

Finally, the CICC benefits from China’s accession to the Hague Convention of 30 June 2005 on Choice of Court Agreements (Choice of Court Convention) (the Hague Convention) which was signed in September 2017. Recognition and enforcement of the judgments rendered by the CICC can be facilitated via the Hague Convention.

For details, please find Weixia Gu’s forthcoming article regarding the CICC and Law and Development Study at Harvard International Law Journal here. Please also find her recent monograph, Dispute Resolution in China: Litigation, Arbitration, Mediation and Their Interactions published by Routledge in 2021 here.

Weixia Gu is Associate Professor at the Faculty of Law, University of Hong Kong and immediate past Co-Chair of the American Society of International Law (ASIL) Asia-Pacific Interest Group. Her research focuses on arbitration, dispute resolution, private international law and cross-border legal issues. Her scholarship is published by leading comparative and international law journals and cited by leading judiciaries in the world. She is the recipient of University of Hong Kong’s Outstanding Young Researcher Award and three times the awardee of China Society of Private International Law Best Research Output Prize. Her recent books include The Developing World of Arbitration (Hart, 2018); Dispute Resolution in China (Routledge, 2021); Multi-tiered Approaches to the Resolution of International Disputes (CUP, 2021). Contact her at guweixia@hku.hk.

General Arbitration, Beijing Consensus, China International Commercial Court, Chinese courts, Law and Development, One Belt One Road

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