Since May 1 of 2008, the Regulations on Open Government Information (the OGI Regulations, English translation here) have formally triggered the legal mandate for information disclosure for all government agencies across China. Over the last ten years, much attention has been paid to how much progress towards transparency can be and has been made in a political system long dogged by secrecy, with an enormous amount of ink spilled on this area of law. Yet one issue remains relatively untrodden, if not unknown, among scholars and observers interested in the Chinese transparency regime. That is transparency for public enterprises and institutions.
As part of the legacy from the planned economy of the pre-reform era, public enterprises and institutions, in Chinese 公共企事业单位, also known as state-owned enterprises and state-sponsored institutions, continue to perform a variety of public functions and/or to receive public funds. They still loom large in Chinese people’s lives today, spanning from health care to education, from transportation to electricity. Against this background, the level of transparency of these quasi or non-governmental organizations bears much significance and warrants more attention. In this paper I attempt to fill the gap in the existing literature.
It starts by explaining the legal framework of open public enterprises and institutions in China, paying particular attention to its difference from the same regarding administrative organs and empowered organizations under the OGI Regulations. The previously unnoted dualistic structure within China’s transparency law is pointed out and the 2019 amendment to the OGI Regulations to reinforce such a structure be introduced. I then explain the fourfold conventional wisdom that underpins such a legal change, as articulated by officials entrusted with the drafting task: First, it was believed that because public enterprises and institutions do not qualify as administrative subjects, they are usually unable to enter into administrative litigation. Even if they become defendants, it is difficult, if not impossible, for the courts to review the legality of their disclosure decisions. Second, it was suggested that the responsibility of ensuring public enterprises and institutions’ transparency, including settling grievances arising from lack thereof, is better entrusted to the oversight departments than to the judiciary. Third, the drafters thought that public enterprises and institutions should be considered regulatees whose transparency obligations are different from the freedom of information requirements that apply more generally to the government, and closer to compulsory disclosure requirements imposed on listed companies or charitable organizations. The fourth and last official rationale is that globally, the freedom of information laws primarily target government agencies rather than non-government organizations.
The rest of the article dissects the above reasoning and puts forward counterarguments. It first reports and assesses the transparency performance of the Chinese public enterprises and institutions since the implementation of the OGI Regulations in 2008, particularly in comparison to that of the administrative organs. It will be made clear that public enterprises and institutions had a rather poor transparency record over the last decade or so, due to a lack of hierarchical pressure from the government departments responsible for overseeing their operation. In other words, although it became a legal requirement back in 2008 that public enterprises and institutions should be more open, there has remained a huge gap between the law on paper and law in action. In contrast, as a silver lining, this paper demonstrates that the Chinese judiciary has actually been active yet prudent in scrutinizing public enterprises and institutions’ compliance with the OGI Regulations, in spite of the institutional barrier created by the dualistic structure. The paper then argues that to incorporate public enterprises and institutions into the OGI Regulations is in line with both the Chinese constitutional imperative for participatory democracy and the international mainstream of including non-governmental entities performing public functions and/or receiving public funds in the freedom of information legislation. This means that the underlying rationale for enhancing the dualistic structure by the 2019 amendment is wrongheaded. The concluding part summarizes and makes proposals for further legal reforms in this area.
Chun Peng’s paper is published with the University of Pennsylvania Asian Law Review and available here.
Chun Peng is presently an assistant professor and assistant dean at Peking University Law School. He received his doctorate and master’s degree in law from the University of Oxford and holds a double degree in law and economics from Peking University. He has published widely on Chinese constitutional law, administrative law and comparative law in English and Chinese. Besides scholarly work, he writes op-eds on China and the world at The Diplomat, China Daily and Caixin. His book Rural Land Takings Law in Modern China: Origin and Evolution is published with Cambridge University Press. More recently, he is interested in data governance and privacy law and has published on China’s social credit system and the newly enacted PRC Personal Information Protection Law.
Shanghai Pudong where many of the lawyers supporting the BRI go to work
I emerged from the taxi on a Sunday afternoon and peered up at the skyscrapers that dominate Beijing’s Guomao district. After finding the appropriate gaolou and taking the elevator up to the law firm’s upper floors, one of Mr. Wang’s* associates came out to greet me. Although the offices were largely empty, Mr. Wang’s corner was bustling with activity. Mr. Wang and I spoke for about half an hour before he asked if I would like to continue our conversation over lunch. I agreed, Mr. Wang grabbed a bottle of wine from his fridge, and we went out to eat.
During lunch, we continued our discussion of Mr. Wang’s cross-border legal experiences. He earned his initial degrees from Chinese universities before studying abroad and earning an additional set of European credentials. He returned to China to work at a domestic law firm, where he now specializes in representing Chinese mining companies pursuing projects in Africa. In addition to taking pride in his foreign training, in his foreign-language skills, and in the one foreign-born non-Chinese associate on his team, Mr. Wang is also very proud of China’s outbound development efforts. He criticized the negative portrayals of the Belt and Road Initiative (BRI) outside of China, noted that “Western” countries were hypocritical for celebrating their own international work while casting aspersions on China’s, and he applauded Chinese companies’ willingness to take risks that foreign companies no longer take.
Interest abounds in whether China’s outbound ambitions are changing the rules of the international legal order. Many have adopted an international-relations lens that focuses on state-to-state dynamics. This interest in the forest instead of the trees is not incorrect, but it shifts attention away from the sources of the norms that would underlie any potential new order—such as the Chinese lawyers who are intimately involved in the day-to-day work of initiatives like the BRI. Interviews with Mr. Wang and others reflect the complex role played by Chinese lawyers that sit at the boundary of two competing scripts. From one perspective, many are “Western”-trained and provide cross-border legal services developed and spread by “Western” states. From another, lawyers like Mr. Wang are encouraged by the Chinese government to serve on the frontlines of its international development efforts.
To obtain a deeper understanding of these lawyers’ views and work, I also interviewed eleven experts or their associates in Beijing and Shanghai. I document how BRI and Cross-Border Legal Experts draw on knowledge buckets that highlight their familiarity with transnational best practices. At the same time, these Experts recognize and help shape the political context surrounding their work. Though most BRI and Cross-Border Legal Experts naturally became involved in BRI projects as their clients’ sights shifted abroad, many (like Mr. Wang) want to see the BRI succeed, even as they also recognize the need for continued policy reforms.
As China continues its global rise, will Chinese lawyers’ stance vis-à-vis the status quo become more subversive than complementary? Perhaps, though I would argue that it is still too early to say. Ongoing work should continue to monitor these dynamics by adopting a similar bottom-up approach. If and when China’s BRI lawyers begin to prioritize Chinese state scripts over existing norms of transnational practice, this should worry those who are committed to the “Western”-led international order. Until then, we should remain attentive to the words and actions of on-the-ground actors like China’s BRI and Cross-Border Legal Experts, those that make state policy a reality.
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, the legal profession, and state-society relations, with a focus on contemporary China.
* Mr. Wang is a pseudonym for one of my interviewees in Beijing.
The world has witnessed significant developments in the institutions, mechanisms and processes of dispute resolution in China since the introduction of Open Up and Reform policies in 1978. Legal reforms since then have restored the court system and the legal profession. In commercial law, China’s WTO accession has further significantly facilitated the modernisation of legal institutions and the commercial law legal framework. With economic development and the strengthening of the legal system, there has also been significant growth in litigation, a development that does not sit comfortably with the traditional view in China that direct conflict should be averted and mediation or other non-confrontational means should be applied to resolve disputes. Additionally, under Xi’s leadership, China has begun to assert its own model of governance which has been presented to the world as a potential alternative global governance model.
At a practical level, ever increasing court caseloads in civil, commercial and administrative disputes have put major pressure on the court system and its resources. Indeed, according to a recent Supreme People’s Court Report, Chinese courts adjudicated some 28 million cases (of which more than half were civil and economic cases) in 2018. Not surprisingly, major reforms of dispute resolution mechanisms have been carried out in the last decade and continue until this day. In the last ten years or so, the dispute resolution system in China under Xi has been elevated to a mechanism treated as part of the new governance model, and its capacity as indicative of governance capacity.
The new system promoted by the Chinese government is described by Chinese authorities as a ‘Mechanism for Pluralist Dispute Resolution’ (PDR)(Duoyuanhua Jiufeng Jiejue Jizhi 多元化争端解决机制). The Chinese term ‘duoyuanhua’ has been variously translated as ‘multiple’ and ‘diversified’; however, in the book I co-authored with Prof Jianfu Chen, Dispute Resolution in the People’s Republic of China: The Evolving Institutions and Mechanisms, we decided after careful consideration that ‘pluralist’ is a better translation, since it indicates that the ‘duoyuanhua’ system is new and different, and the ‘multiple’ or ‘diversified’ dispute resolution methods it refers to are not just independent alternatives but interrelated components in an integrated and coordinated system.
The term ‘Mechanism for PDR’ first appeared in 2004 in the 2nd Five Year Reform Plan of the People’s Courts, and again in 2008 in the judicial reform scheme coordinated by the Communist Party of China (CPC) Central Committee on Judicial Reform. The most important policy measures, however, emerged in 2013 and 2014. The CPC Central Committee in 2014 stipulates that:
Mechanisms for prevention and resolution of social conflicts and disputes shall be strengthened, and a pluralist dispute resolution mechanism, in which mediation, arbitration, administrative ruling, administrative reconsideration, and litigation shall be organically linked and their operations be coordinated, shall be improved.
– Item 5 (4), Decision Concerning Certain Major Issues in Comprehensively Moving Forward Ruling the Country According to Law, CPC Central Committee, 2014
This 2014 CPC Decision makes the reform task clear: to develop a comprehensive dispute resolution system in which the various dispute resolution methods are not treated as separate alternatives, but as mutually supportive components in an integrated system of PDR.
In Chinese literature and policy documents the term ‘Mechanism for PDR’ has been used in both a broad and narrow context.
The 2014 CPC Decision refers to strengthening mechanisms for the prevention and resolution of social conflicts and disputes and emphasises building and improving the interconnection and coordination of all kinds of dispute resolution methods. These measures include alternative dispute resolution (ADR), litigation and administrative measures and a great variety of organisations, including the judiciary (courts and procuratorates) and many government authorities such as administrative law enforcement agencies (public security authorities) and offices of Comprehensive Control and Social Management (Zongzhi Ban 综治办), as well as mass/social organisations (Trade Unions, Women’s Federations, Youth Leagues, Neighbourhood Committees). In this broad context, the term refers to a system of mechanisms for comprehensive social control and the prevention of social conflict and instability (Weiwen 维稳) under the general umbrella of social governance, which is clearly more political than legal. These reforms aim at establishing an integrated dispute resolution system that forms part of China’s new governance model, addressing not only dispute resolution but also the prevention of social conflict and maintenance of social stability.
Conversely, the term is also used in a narrow sense, referring to an integrated system of legal mechanisms, the reform of which is led by the Supreme People’s Court, which focuses on building links between ADR, administrative review, adjudication and litigation. These include judicial confirmation of mediation agreements, support for arbitration and the enforcement of arbitral awards, appointing mediators and arbitration institutions as court-sanctioned mediators and arbitrators, establishment of ‘one-stop’ (Yizhanshi一站式) dispute resolution mechanisms within the court system, and shared platforms for litigation and ADR.
The comprehensive approach, under the umbrella of strengthening PDR as a dispute resolution mechanism, is innovative yet full of uncertainties. It is probably well-intended that all social forces are mobilised to prevent and resolve social conflicts and disputes, and the one-stop approach may provide convenience and efficient and effective dispute resolution solutions.
It is uncertain and potentially risky, not just because the Mechanism for PDR may be used as an instrument for social control, but because this may politicise an otherwise innovative reform. On the other hand, however, efforts towards building and strengthening the PDR, in the narrow sense of the term, led by the Supreme People’s Court, are to be welcomed. These efforts have seen the strengthening and further development of mediation and arbitration, as well as the establishment of various mechanisms for ADR and litigation to work together as a ‘united force’ for dispute resolution.
Zhiqiong June Wang (PhD) is Associate Professor of Law, Western Sydney University, Australia. June’s research interests are in Chinese law, international economic law, dispute resolution and comparative law. Her China-related research focuses on original observation and analysis of the various institutional reforms in the area of commercial law in China. June is also an arbitrator of the Shenzhen International Court of Arbitration.
How did Chinese law change in the first two decades of the 21st century? In his article Cage for the Birds: On the Social Transformation of Chinese Law, 1999-2019, Sida Liu flips the metaphor that Stanley B. Lubman used in his seminal book on Chinese law in the late 20th century, Bird in a Cage, to trace the Chinese legal system’s internal institutionalization and party inscription. Internal institutionalization refers to the vast improvement of the Chinese legal system’s internal coherence and formal rationality with the promulgation of thousands of new laws and regulations in the early 21st century. Party inscription refers to the Chinese Communist Party’s explicit reassertion of its dominance over the Chinese legal system since Xi Jinping took power in 2012, including incorporating the party disciplinary system into the National Supervision Commission, politicizing the judiciary and the bar exam, setting up party cells at law firms and nurturing legal professionals who are loyal to the party, and persecuting politically liberal lawyers and legal academics.
As a result of those two processes, Chinese law is no longer a chirping and stirring bird as it was in the 1990s, waiting to be freed from the political cage, but an increasingly large, complex, and repressive cage for the party-state to confine all kinds of birds. In this article, Liu identifies four types of birds currently trapped in the legal cage: hawks, crows, sparrows, and ostriches. Hawks are party and government officials who are potentially the subjects of efforts to combat corruption. Crows are activists who pose potential threats to political and social stability, including activist lawyers, feminists and LGBT (lesbian, gay, bisexual, transgender) activists, labor organizers, and religious activists. Sparrows are millions of netizens who form the “surrounding gaze” in China’s vibrant yet heavily censored cyberspace. Ostriches are ordinary Chinese people who usually turn a blind eye to politics and simply hope to live in peace and prosperity. Taken together, this typology of birds provides a view of Chinese law not with any doctrinal or institutional classification system but from the perspective of the various kinds of people living in it and influenced by it, as well as the ways in which the party-state uses law to control them.
To give a snapshot of how this new bird-cage metaphor works, with Xi Jinping’s massive anti-corruption campaign in the 2010s, laws for combating corruption in China have evolved from two parallel institutions of the CCP’s Commission for Discipline Inspection (CDI) and the anti-corruption bureau in the procuracy to the unified National Supervisory Commission. As a result, the extralegal shuanggui procedure, in which corrupt officials were taken by the CDI for questioning and prolonged detention, was legalized and the scope of the CDI’s work has expanded from CCP members to non-party members in the state sector. In other words, the invisible black box of shuanggui is not replaced but, rather, reinstalled in a harder and stronger legal box controlled by the CCP. All the “hawks”, corrupt or not, are confined to this legal box now.
In the rest of the article, the bird-cage metaphor is applied to other areas of Chinese law involving political stability, internet control, and everyday life. The article ends with a not-so-hopeful note. Liu argues that the idea of law as a driving force for economic and political change, which is implied in Lubman’s “bird in a cage” metaphor, is merely an illusion of law-and-development scholars and practitioners. For most of human history, the fate of law has always been a cage, especially when it is situated under an authoritarian state that prioritizes instrumentality over proceduralism and focuses on reducing “restlessness” rather than “arbitrariness”. However, the fate of the birds confined in the new Chinese legal cage remains uncertain.
Professor Sida Liu joined the Department of Sociology at the University of Toronto in 2016 and holds a non-budgetary cross-appointment at the Faculty of Law. His research interests include the sociology of law, organizations and professions, criminal justice, globalization, and social theory. He has conducted extensive empirical research on China’s legal reform and legal profession, including the globalization of corporate law firms, the political mobilization of criminal defense lawyers, the feminization of judges, and the career mobility of law practitioners. Professor Liu is the author of, among others, Criminal Defense in China: The Politics of Lawyers at Work (with Terence C. Halliday, Cambridge University Press, 2016).
Financial technology (Fintech) brings about paradigm changes to the traditional financial system, presenting both challenges and opportunities. In 2020 when this book was largely written, unlike many traditional businesses, Fintech seemed to be accelerated rather than hampered by the outbreak of the COVID-19 pandemic. Due to the various restrictions and even lockdowns imposed during the pandemic, more people and institutions have embraced Fintech, doing shopping, payment, and investment through online platforms. In any event, Fintech looks set to reshape the financial landscape, producing significant impact on the business community and society at large.
This is the first book-length treatment of the regulation of Fintech in China. At the international level, there has been a fierce competition for the coveted title of global Fintech hub. One of the key enablers of success in this race is regulation. As the world’s leader in Fintech, China’s regulatory experience is of both academic and practical significance. This book aims to present a systematic and contextualized account of China’s Fintech regulation, identify relevant institutional factors contributing to the development of the Chinese law, and illustrate why and how China’s Fintech regulation has been developed, if and how it differs from the rest of the world, and what can be learned from the Chinese experience.
Fintech is an evolving concept with new products or services emerging constantly. Hence, it seems neither desirable nor feasible to discuss all Fintech sectors in this book, and it would be necessary to be selective about the topics to be covered. This book chooses to focus on the following topics: online P2P lending, cryptoassets, initial coin offerings, mobile payments, data protection, robo-advisory, equity crowdfunding and central bank digital currency. In fact, China has both stories of success (e.g., mobile payments) and lessons of failure (e.g., online P2P lending).
Although different sectors of the Fintech market have different features and issues, this book shows some common threads running through them. First and foremost, the regulatory goal is to achieve two main objectives, namely facilitating financial innovation and market development on the one hand, while ensuring risk control and investor protection on the other. Second, the regulatory balance is a delicate and dynamic one, which needs to be carefully designed and adjusted according to the local conditions of any given jurisdiction. Third, the regulatory regime for the Fintech markets is a work-in-progress, which is not surprising given the fast-changing pace of the underlying Fintech markets.
Given the novel and disruptive nature of Fintech, a fundamental question here is whether we can still use the traditional regulatory framework for Fintech, or we need to think outside the box and introduce a new one specifically for Fintech? Indeed, Fintech regulation presents a cutting-edge and largely uncharted territory, and the right key can be found only after lots of trial and error.
From a political-economic perspective, this book also ventures to demonstrate the Chinese characteristics of China’s Fintech regulation. For instance, it does not only examine the substantive rules, but also the enforcement issues, particularly the interest group politics of relevant regulators. At a higher level, China’s Fintech market can be labelled “policy market” in that the development and regulation of China’s Fintech markets have been heavily influenced by the policies of the government (or even the Chinese Communist Party). Data privacy and cybersecurity have become increasingly important in the regulation of China’s Fintech business, with far-reaching implications for the financial markets domestically and internationally (via overseas-listed Chinese Fintech firms). There can be more uncertainty arising from these issues due to China’s growing concerns over national security against the background of the ongoing competition (confrontation) between China and the US.
In sum, the Chinese experience can have important implications for the international discourse and debate on the regulation of Fintech. This book has several features which readers may find useful as a source of information. Firstly, a systematic and contextualized account of China’s Fintech regulation helps readers gain a holistic view of the regulatory approach and regulatory perimeter in China. Secondly, the book tries to identify and analyze factors the interaction of which has contributed to the constitution of the institutional environment in which China’s regulation of Fintech has been made and enforced. This will help readers understand not only what the law is, but also why the law is the way that it is. Thirdly, it takes a comparative approach to critically evaluate Fintech regulation in China. The comparative analysis covers some major Fintech jurisdictions in the region and internationally, such as the US, the UK, Singapore and Hong Kong.
Robin Hui Huang’s book, Fintech Regulation in China: Principles, Policies and Practices was published with Cambridge University Press and is available here.
Robin Hui Huang is Professor (senior level) at the Faculty of Law, Chinese University of Hong Kong. He is a leading expert in corporate and financial law with a focus on Chinese and comparative issues. He is also Adjunct Professor of Law at the University of New South Wales, Li Ka Shing Visiting Professor of Law at McGill University, Honorary Professor at East China University of Political Science and Law, and Guest Professor at China University of Political Science and Law. He is Specially-Invited Research Fellow of the Supreme People’s Court of PRC and Expert Advisor of Shanghai Financial Court. He has had about 120 publications, including 10 books and many papers in premier publishing houses and top journals in the United States, United Kingdom, Australia, Canada, Germany, Israel, Hong Kong, Mainland China, and elsewhere. He acts as a Chinese law expert in international litigations and serves as an arbitrator in China and overseas.
In a nutshell: With its observations of a range of topics, what does this book tell us about the trajectory of criminal justice in China?
One of the main achievements of the book is to bring together contributions that look at Chinese court reforms and criminal procedure law reforms. Moreover, the book combines a wide range of analytical perspectives and themes in order to investigate questions that link institutional changes within the court system and legal environment with developments in criminal procedure law. The common denominator in the broad array of topics discussed in this volume is the multitude of forces attempting to influence the trajectory of judicial reform and criminal justice in China. The complex dynamics, and particular interests, of the numerous agents and subjects involved in the process intermingle with any undertaking to effective systemic change in the Chinese judiciary. These dynamics may play out in different ways. They may, for example, be mutually reinforcing, as in the case of the intra-court personnel reforms, heightened transparency, resilience against media influence and reform of the adjudication committees, all of which may result, to use the words of Fu Yulin, the author of chapter 2 of the book, in the by-product of a more independent judiciary. However, parallel reform projects can also interfere with one another, impeding the intended effects of each, as evidenced by the difficult position of the procuratorates in the criminal justice reforms, given that the envisioned trial-centred proceedings mandate the more prolific and active use of live witness testimony.
Judicial Reform is an ongoing endeavour since reform and opening. (How) has the direction changed under the Xi Jinping administration?
Due to far-reaching limitations of civil and political rights, increased repression of political dissent and mass internment in Xinjiang, legal developments in the Xi Jinping era are generally perceived outside China as subject to unrestricted authoritarian rule that has largely side-lined legal institutions, including the Chinese courts. However, the court reforms of the post-2013 period have provided judges and courts with more autonomy in the adjudication of cases. Under Xi Jinping, court reforms have returned to the idea of rule-based governance, brought the court system back to the centre of dispute resolution, and emphasised professionalism, autonomous decision-making, the transparency and accountability of judges, and centralisation of the judiciary. The Decision on Governing the Country According to Law of the 4th Plenum, attempts at the normative regulation of inner-party affairs by strengthening rule-based governance and the October 2018 amendment of the People’s Court Organisation Law all underscore the regime’s efforts to formalise legal procedures and strengthen legality. Court reforms have taken a more radical turn than those passed under preceding administrations, as a vast range of measures have been introduced to render judges and the courts less susceptible to local government interference and increase the efficiency of the judiciary. The strengthening of the courts as professional, autonomous arbitrators of legal disputes was effected through both a centralised judicial authority and controlled experimental reform measures at the local level.
Xi Jinping’s leadership has amended the Constitution three years back, among others lifting the term limits for his own rule. Among the changes made, which are most consequential for criminal procedure in China?
Apart from abolishing the term limits of the state president, the 2018 constitutional amendment established the National Supervision Commission as a new state organ that merged the anti-corruption agencies of the party and the state. Supervision commissions were also introduced at the local levels. The National Supervision Commission has now been afforded an independent constitutional status that allows it to exercise both administrative and criminal supervisory powers in supervising, investigating, disciplining and sanctioning public officials. Rather than constituting an independent state institution, the supervision commissions have absorbed state functions that are now directly controlled by Party disciplinary inspection commissions at the various administrative levels, the members of which simultaneously hold positions in the state’s supervision commissions. The supervision commissions are not subject to the legal constraints on investigative powers stipulated in the Criminal Procedure Law, although they enjoy de facto power to conduct criminal investigations and gather evidence that is admissible in criminal trials. The Supervision Law’s coverage has been extended to all public employees who exercise public power rather than being restricted to Party members alone, as under the previous scope of investigation by the disciplinary inspection commissions. Meng Ye in chapter 5 of the book provides an in-depth analysis of the supervision commissions.
The volume zooms in on a number of themes in the reform of criminal procedure. What do the observations have to offer in response to the claim that the rule of law is a lost cause in China?
The answer to this question depends on how you define the rule of law. If we take the term in its liberal sense and require that the law effectively constrains all levels of government and comprehensively controls the political process, then the overall direction of procedural and institutional reforms during the post-2013 era is disappointing. In general, the dominance of the party over the law has been re-emphasised on the ideological and institutional levels. It is stressed that the effectiveness of the law hinges on permanent affirmation and supervision by the party. The reforms do not directly aim at improving the protection of rights of the individuals involved in criminal procedures. However, improvements in terms of the protection of rights may occur as by-products of some reform measures. Many court reforms are part of a general centralisation dynamic and aim at insulating courts from improper horizontal influence of local actors, while strengthening vertical control over the court system. What this change from ‘improper influence’ to ‘proper influence’ means for the development of a ‘socialist rule of law’ is difficult to measure. The court and criminal procedure law reforms are oriented towards unified application of the law, they rely on technology and data-driven innovations that reduce human discretion, they have enhanced professionalisation, transparency and vertical control of courts as well as given individual judges and panels of judges greater autonomy in adjudication. However, criminal procedure reforms aim at enhancing Party-state governance effectively control crime and political dissent in order to maintain Party supremacy and social stability. To sum up, the reforms have strengthened the instrumentalist aspects of law and formal legality but not necessarily due process or human rights protection.
How can the role of the Supreme People’s Court be described in criminal procedure developments?
This issue is addressed in detail by Susan Finder in her chapter on how the SPC adopts judicial interpretations of the criminal procedure law. The SPC is the most important institutional actor linking court reform and criminal procedure reform, with the dynamics of both grounded in the administrative and legislative functions of the SPC. Those functions are distinct characteristics of China’s highest court that are not shared by the apex courts of other jurisdictions. Although the SPC has an important adjudicative function as an appeal court, its legislative function has elevated it to the role of a legislator. The SPC wields these powers through judicial interpretations that are often more relevant to adjudicative practice in procedural law than the laws passed by the NPC or its Standing Committee. Further, the SPC exercises administrative powers over the entire court system, including the design and implementation of court reforms in cooperation with the relevant party organs. The SPC’s judicial interpretation drafting process is an example of secluded, bureaucratic law-making in which the political interests of the CPC and the institutional interests of the SPC and the judiciary as a whole dominate.
What are other actors exerting influence in the development of criminal justice and courts in China?
The book focuses on the Supreme People’s Court as a major actor of initiating and implementing institutional and procedural reforms. Yet we should not underestimate the role of the academia in the development of criminal procedure law and court reforms. Many of the reform measures were proposed by legal scholars and have been discussed for some time before they were taken up by the party-state leadership. Of course, legal scholars have no power to determine reform priorities or to take decisions about what kind of reform models shall be adopted, but Chinese legal scholarship is the most important intellectual resource from which decisionmakers draw.
Developments in Chinese law have been informed by systems and laws in other countries. Does criminal procedure reform look to other countries for reference?
All major Chinese legal reforms in the last decades were preceded by comparative studies of legislation, scholarship and judicial practice of foreign jurisdictions. Apart from foreign jurisdictions, international human rights treaties that set standards for criminal trials have been a central reference point of academic discussions. However, nowadays debates about foreign legal models and their suitability for China only take place in the background. In contrast to earlier periods of the reform and opening period, official documents refrain from references to foreign or international law and place the indigenous Chinese experience at the centre. The widespread use of the terms ‘Chinese characteristics’ and ‘selective adaptation’ of foreign models indicate legal reform relies on indigenous resources and technology and data-driven innovations rather than on the adoption of ‘Western’ law. Indeed, Chinese legal institutions and procedural laws are quite distinct from those of liberal rule of law systems as the Chinese authoritarian system has certain features that determine the shape and operation of legal institutions and the law. For example, the supremacy of the Communist Party requires channels of ‘proper interference’ with judicial decision-making processes in order to effectuate its comprehensive overview of the implementation of law.
Contributors to the volume ‘Chinese Courts and Criminal Procedure‘, published with Cambridge University Press, include Xiaohong Yu, Yulin Fu, Susan Finder, Ye Meng, Alexandra Kaiser, Zhiyuan Guo, Kwai Hang Ng, Xin He, Michelle Miao, and Daniel Sprick. The editor Björn Ahl is Professor and Chair of Chinese Legal Culture, Cologne University and President of the European China Law Studies Association.
Chinese multinational companies (MNCs), key agents in China’s global expansion, have caught considerable attention as the US-China rivalry escalates. Top Chinese MNCs such as Huawei, ByteDance, and Xiaomi face unprecedented political, regulatory, and legal risks in the United States, which, if poorly managed, pose existential threat. Are Chinese MNCs capable of negotiating the risks? The answer is certainly no if the MNC managers, most of whom lack basic understanding of U.S. law, do not delegate extensively to legal professionals. In other words, U.S. lawyers play an indispensable role in helping Chinese MNCs navigate the increasingly complex and hostile U.S. legal and regulatory landscape. Yet little is known about how Chinese MNCs interact with their outside counsel, as the existing literature on corporate consumption of legal services has largely neglected developing country MNCs. Ji Li addresses Chinese MNCs’ in-house legal counsels in the United States in his article “Going Out” and Going In-House: Chinese Multinationals’ Internal Legal Capacity in the United States.
Li empirically explores several major aspects of Chinese MNCs as consumers in the U.S. legal market. Do they take professional legal advice seriously? The qualitative evidence (i.e., interviews with lawyers, in-house counsel, and other business professionals) tells a mixed story. While some view Chinese MNCs as not notably different from U.S. companies, others complain about habitual disrespect for lawyers and under-appreciation of the importance of quality legal services for running business in the United States. However, the quantitative evidence (i.e., data based on a comprehensive survey of Chinese MNCs in the United States) indicates that, on balance, Chinese investors recognize U.S. legal services as being costly but essential for their U.S. operations.
That said, in a market of 1.3 million registered U.S. lawyers, most of whom are self-claimed “leading experts” in their respective practice areas, how do Chinese MNC managers without U.S. legal expertise collect accurate and truthful lawyer information? The study reveals that Chinese managers surmount severe information asymmetry by relying primarily on trusted and knowledgeable third parties for U.S. lawyer recommendations (for more about Chinese MNCs’ lawyer selection preferences, see “What Do Chinese Clients Want?”). Additionally, the study finds that most Chinese MNCs spend relatively insignificant amounts of money on U.S. legal services, leaving them with minimal bargaining power vis-à-vis their legal service providers. It is therefore not uncommon for top U.S. firms to treat Chinese MNCs as “second class clients.”
Obviously, all Chinese MNCs are not the same, and their U.S. legal expenses vary significantly. Huawei and ByteDance probably spend millions of dollars a year purchasing U.S. legal services, whereas many report annual legal budgets of less than a hundred thousand dollars. What explains the inter-company variations? For instance, all else being equal, do state-owned Chinese MNC spend more on U.S. lawyers? After all, “it’s not their own money,” noted a knowledgeable informant. The study finds that the U.S. legal expenses of Chinese MNCs vary according to their legal service demand, not special corporate attributes such as ownership structure, which Li argues is another sign that Chinese MNCs have limited impact on the U.S. legal market due to their lack of leverage. The findings of this study contribute to ongoing debates about Chinese MNCs, their adaptation to host country institutions, and their impacts on the legal profession and the global legal service market.
Ji Li’s paper “Meeting Law’s Demand: Chinese Multinationals as Consumers of U.S. Legal Services” was published in Yale Journal of International Law online and is available for free here.
Ji Li (jli[at]law.uci.edu) is John S. and Marilyn Long Professor of U.S.-China Business and Law at UC Irvine School of Law. His book, Clash of Capitalisms: Chinese Companies in the United States (Cambridge University Press, 2018), examines the adaptation of Chinese investors to the U.S. legal and regulatory system. His other publications can be downloaded here.
The “Göttingen Summer School on Chinese Law” of will take place in the week of September 20-24, 2021 in a digital format. The event, organized by the SinoGerman Institute for Legal Studies of the Georg-August University of Göttingen in cooperation with the Max Planck Institute for Comparative and International Private Law Hamburg, is aimed at students, doctoral candidates and practitioners who want to gain an initial insight into Chinese law or who want to deepen their knowledge in this field. The focus is on the professional exchange on current developments in Chinese law and legal practice in China. As we welcome an international audience, the event will be held in English. The main component of the summer school is a daily basic lecture “Chinese Business Law” by Professor Dr. Knut Benjamin Pißler, China consultant at the Max Planck Institute. In addition, academics and experts will give lectures on various selected topics of Chinese law. Find the full program here.
This year, the Institute is particularly pleased to offer lectures by Professor Donald Clarke (The George Washington University Law School), Professor Dr. Yuanshi Bu (University of Freiburg) and Professor Dr. Eva Pils (Dickson Poon School of Law, King’s College London). For an overview of all speakers, click here. By passing the take-home examination, law students can acquire their foreign language certificate according to § 4 I No. 1 d NJAG.
As the number of participants is limited to 80 people, we ask that you register early.
For further information and if you have any questions, visit our website and please do not hesitate to contact Susanne Jonetzko and her team by phone (+49 551 3921820) or email (ChinaRecht@jura.unigoettingen.de).
On December 31, 2019, the Wuhan Municipal Health Commission posted a notice on its website about an outbreak of a viral pneumonia outbreak in the city. By July 27, 2021, almost 200 million people across the world were known to have been infected and more than four million had died. The COVID-19 pandemic’s global cost, as estimated in October 2020 by the International Monetary Fund, could reach 28 trillion US dollars over the next five years.
Are there grounds in law to impute state responsibility on China for its role in the spread of the pandemic, and is there evidence for such claims? This paper (available here) focuses on the first question, namely on the framework in public international law governing state responsibility in relation with epidemics.
Under public international law, every internationally wrongful act of a state entails its international responsibility.[1] Such wrongful acts include, among others, violations of general principles of public international law and violations of obligations specifically undertaken vis-à-vis other states. A defendant state may invoke as an excuse for failures to perform any of such obligations the defense of force majeure subject to the satisfaction of certain conditions. Victim states assume responsibility for their own conduct that aggravates harm caused illegally by another state.
General principles of public international law
It has been established that states have a general obligation to ensure that activities within their jurisdiction and control respect the environment of other states.[2] However, there can be no responsibility for a pure act of nature, such as a flood caused by rainfall. An epidemic outbreak of a dangerous disease is generally recognised as such an act of nature, so that a state where one broke out would not be liable on that account alone for its propagation internationally.
On the other hand, although there can be no responsibility for a pure act of nature, as soon as human action or inaction is involved, the problem of responsibility arises. Consequently a flood caused by the breach of a dam, itself caused by heavy rainfall, begs the question to what extent the dam’s construction or operations were catalysts of its breach.[3]
China might also be held liable for violations of its obligations subscribed under treaties, in this case, most relevantly the International Health Regulations (IHR) adopted under the aegis of the World Health Organization (WHO) by 196 states.[4] The currently applicable IHR, adopted in 2005, entered into effect on June 17, 2007 in the aftermath of the severe acute respiratory syndrome (SARS) outbreak.
According to its Article 2, the member states retain “the sovereign right to legislate and to implement legislation in pursuance of their health policies”, so the WHO has very little power to impose its desiderata on any recalcitrant member state. For instance, Indonesia refused to share samples of influenza A (H5N1) with the WHO. The country invoked its sovereign right to control matters connected to the outbreak of the disease on its territory as it was concerned that it might not receive a fair share of the benefits of scientific discoveries derived from the virus samples.
The Regulations further stipulate that each member state undertakes to “develop, strengthen and maintain . . . the capacity to detect, assess, notify and report events” as required and that they must notify the WHO within 24 hours of all events which may constitute a public health risk to other states through the international spread of disease and which may require a coordinated international response. When requested by the WHO, member states “should provide, to the extent possible, support to WHO-coordinated response activities”.
If a member state of the WHO were to engage its responsibility in connection with its commitments within the WHO, then it could be pursued by other member states in accordance with the WHO dispute resolution procedures. However, the WHO itself, in its report on its investigative mission to China published in February 2020, has declared that
'In the face of a previously unknown virus, China has rolled out perhaps the most ambitious, agile and aggressive disease containment effort in history. The strategy that underpinned this containment effort was initially a national approach that promoted universal temperature monitoring, masking, and hand washing. However, as the outbreak evolved, and knowledge was gained, a science and risk-based approach was taken to tailor implementation. Specific containment measures were adjusted to the provincial, county and even community context, the capacity of the setting, and the nature of novel coronavirus transmission there.'[5]
In addition, member states retain the right to refer any dispute about the IHR to the International Court of Justice, provided that each had submitted to its jurisdiction without filing any reservations with respect to the subject matter of the dispute in question; China has not filed any such declarations.
The defense of force majeure
In the event of a claim brought against China for violations of any of its treaty obligations, it could invoke force majeure as a defense. For an event to justify the invocation of force majeure in public international law, a state must demonstrate a link of causality between the event and its failure to fulfil the obligation[6] from which the State claims to be excused[7] and additionally that the event is ”irresistible”, “unforeseeable”, and “external to the party invoking it”.
In short, a State would not be held responsible in public international for the occurrence of an epidemic as an act of nature, but its policies, acts and omissions in its prevention, and management of its propagation, in particular toward foreign countries, could engage its responsibility. If it were established that a Chinese state agency, such as the Wuhan Institute of Virology (WIV),[8] willingly or negligently introduced COVID-19 into circulation, then the defence of force majeure would not be available since its acts would be clearly within the control of the Chinese State, i.e. not “external”.
On the consequences of contributory negligence
Contributory negligence by the injured party is also held to extinguish the total or partial liability of the operator or the acting state in some multilateral conventions.[9] Contributions to the injury by willful or negligent action or omission of the injured state must be taken into account in determining any due reparations. According to the John Hopkins Corona Virus Resource Center, as of July 27, 2021, in the United States there had been about 126 times more deaths per capita due to COVID-19 than in China, and that is before considering that China’s population is four times larger.[10]
Whatever China’s liability to other countries stricken by the pandemic for its violations of its international obligations might be, the liability to repair the ensuing harm would be reduced, or even entirely offset, to the extent that other states had failed to adopt appropriate and timely measures to prevent and mitigate the harm caused by the pandemic within each of their territories.
Events surrounding the COVID-19 pandemic have demonstrated the limits of the current law to regulate international health. To carry out any missions on the territory of a member state, the WHO must obtain the latter’s consent, which can be withheld at its unqualified discretion for the protection of its sovereignty. A more constraining framework could be adopted by the member states.
Find Daniel A. Laprès’ paper ‘The framework in public international law for determining the responsibility of the People’s Republic of China in connection with the Covid-19 pandemic‘, published in the International Business Law Journal, here. He was Senior Counsel at the Kunlun Law Firm, Beijing from 2008-2019, counsel at the Court of Appeals of Paris, Barrister and Solicitor in Nova Scotia, and an arbitrator on the International List of the China International Economic and Trade Arbitration Commission (CIETAC). He authored numerous publications Chinese law, a list of which may be found on his website.
[1] Article 1 of the International Law Commission (ILC) Draft articles on Responsibility of States for Internationally Wrongful Acts, with commentaries, 2001, https://legal.un.org/ilc/texts/instruments/english/commentaries/9_6_2001.pdf; and the following cases: Phosphates in Morocco, Judgment, 1938, P.C.I.J., Series A/B, No. 74, p. 10, at p. 28. See also S.S. “Wimbledon”, 1923, P.C.I.J., Series A, No. 1, p. 15, at p. 30; Factory at Chorzow, Jurisdiction, Judgment No. 8, 1927, P.C.I.J., Series A, No. 9, p. 21; and Merits, Judgment No. 13, 1928, P.C.I.J., Series A, No. 17, p. 29.
[2] Certain activities carried out by Nicaragua in the Border Area (Costa Rica v Nicaragua, and Certain activities carried out by Costa Rica in the Border Area (Nicaragua v Costa Rica), December 16, 2015, https://www.icj-cij.org/files/case-related/152/152-20151216-JUD-01-00-EN.pdf; the passage cited is extracted from the ICJ’s order in this case rendered on December 123, 2013 at para. 19.
[3] P. Reuter, Droit international public, 4th ed., Paris, Presses universitaires de France, coll. Thémis, 1973, p. 115.
[4] Other commitments meriting consideration, though in the end not likely applicable, are those undertaken under articles 55 and 56 of the United Nations Charter, under article 12 of the International Covenant on Economic, Social, and Cultural Rights, as well as under the UN Convention concerning the Protection of the World Cultural and Natural Heritage of 1972 the UN Convention on Biological Diversity of 1992 and the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES).
[6] The international obligation may arise from any “source” of public international law, such as a treaty, a custom, a general principle, a unilateral act, a decision of an international governmental organization, a judgement of the ICJ, an award of an arbitration tribunal. P. Reuter, Droit international public, 4th ed., Paris, Presses universitaires de France, coll. Thémis, 1973, p. 115.
[7] B. Cheng, General Principles of Law as Applied by International Courts and Tribunals, London, Stevens, 1953, p. 228, citing the Permanent Court of International Justice in the cases of the Serbian Loans and the Brazilian Loans (1929), and the rapporteur in the Spanish Zone of Morocco Claims (1924-1925).
[8] The Institute was founded in 1956, and put under the administration of the Hubei Commission of Science & Technology in 1970. In June 1978, it was returned to the jurisdiction of the Chinese Academy of Sciences, and it adopted its current title
[9] International Liability for Injurious Consequences arising out of acts not prohibited by International Law, International Liability in case of loss from transboundary harm arising out of hazardous activities, (Agenda Item 4) Document 1/CN 4/543, N° 446.
[10] In the United States : 611,151 deaths among a population of 333,071,970 compared with China’s loss of 4,848 for a total population of 1,444,586,267, https://coronavirus.jhu.edu/map.html.
China is stepping up its ambitions to become a norm-making power and its capability to achieve this has become a key question in the debate over the international order. In the realm of international law, the government of the People’s Republic has put forward the concept of a ‘community of common destiny for mankind’ which stresses some long-standing norms of global constitutionalism, neglects others and further introduces new ones to the field.
In order to better delineate China’s plans for international law and to identify the values and structures of the future international legal order envisaged by China, Björn Ahl in his latest paper observed both Chinese legal scholarly debates and government statements revolving around the community of common destiny for mankind as well as global constitutionalism and its substantive ingredients: jus cogens, human rights, democracy and the rule of law. Whereas the public debate by no means embodies the full picture of the direction where the PRC’s take on international law is heading towards, it does reveal which elements are accepted and which are rejected.
Although part of that scholarship affirms in general terms the value of the rule of law, human rights and democracy, those who discuss the substantive elements of global constitutionalism in more detail often give them distinctly different interpretations or even refute them.
The Chinese debate on global constitutionalism began with China’s accession to the WTO in 2000. While generally supporting the interpretation of international law in constitutionalist terms, many scholars also point out the dominance of Western viewpoints and call to better align international law with Chinese interests. For instance, peremptory norms of international law (jus cogens), are regarded as one constitutive element of global constitutionalism, however official statements show a very narrow reading of it that is not in line with the scholarly understanding that jus cogens norms have universal binding force and a higher status than ordinary norms of international law.[1] Ahl explains that jus cogens norms as norms imposed on states without their consent empower non-state actors, domestic courts and international tribunals, and are thus not conducive to furthering the interests of authoritarian states like the PRC which seek effective control over the judiciary and civil society.
The rule of law was first officially introduced to the PRC Constitution in 1999 with a significant twist: ‘Socialist rule of law’ emphasizes the supremacy of the party over the law and denies full legal autonomy, features that make it difficult to apply it to the realm of international law. The official debate around the rule of law in China defends the instrumentalist ‘socialist rule of law’ as a legitimate local variation of the international rule of law.
Socialist rule of law is an ideological rather than legal concept, the meaning of which is not determined and/or fleshed out by legislation and the courts but by party documents. […] The concept is a variation of the principle of socialist legality, where stability and flexibility are combined within a dialectical relationship.
A general trend towards democratisation in international law has been widely acknowledged by Chinese authors in the sense of a power shift away from US dominance. They have also claimed that the dominant notion of democracy as well human rights is limited and advocates Western ideology. One strand of arguments projects the Chinese development model onto the global arena, holding that top-down considerations can better serve developmental goals than antagonistic and individualistic rights-based approaches. Through stating that it “offers Chinese wisdom and solutions for global governance of human rights”[2], the government makes it clear that it works towards disseminating its own official human rights approach in order to bring international human rights standards in line with domestic practices.
The concept of the community of common destiny for mankind is in the scholarly discourse at hand regarded as a precondition for recognising a hierarchy of norms in international law. Scholars argue that the community of common destiny concept contains a set of binding principles of international law. Ahl’s paper dives into official and scholarly takes on these principles: for instance is the very prerequisite for the principle ‘durable peace’ found to be sovereign equality including a free choice of political system and development path. The principle ‘universal security’ is regarded to also cover the political risks to authoritarian systems.
The community of common destiny is seen as a new source of legitimacy for international law that is based on the shared interests of the community of states.
He concludes that the reinforcement of the existing order and fundamental change to that order are both components of the community of common destiny concept. Whereas formal aspects of global constitutionalism overall are viewed favourably, it is also criticized as turning a blind eye to US dominance.
Find Björn Ahl‘s full paper ‘Chinese Positions on Global Constitutionalism, Community of Common Destiny for Mankind and the Future of International Law’, forthcoming in the Chinese Journal of Comparative Law, on SSRN here.
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.
[1] Permanent Mission of the PRC to the UN, ‘Statement by Mr. XU Hong, Director General of the Department of Treaty and Law, Ministry of Foreign Affairs, People’s Republic of China at the 71st Session of the UN General Assembly on Agenda Item 78, Report of the International Law Commission on the work of its sixty-eighth session (Part II: Chapters 7, 8, 9, 10, 11, 12)’ (chnun.chinamission.org, 27 October 2016) last accessed 18 July 2021
[2] State Council Information Office, ‘Seeking Happiness for People: 70 Years of Progress on Human Rights in China’ (gov.cn 22 September 2019 last accessed 18 July 2021.
