European Chinese Law Research Hub

Archipelagos of Chinese Law

25. June 2021

A new paper by Matthew Erie

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.

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.))

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.

Chinese Antitrust Exceptionalism

21. May 2021

Opinion by Angela Huyue Zhang

In recent months, Chinese antitrust authorities have ramped up their efforts to rein in Big Tech firms such as Alibaba, Ant Group, Meituan and Tencent. These enforcement actions were all launched after Jack Ma’s controversial speech criticizing Chinese financial regulation last October. Many have therefore speculated that there are political motivations behind China’s crackdown on Big Tech. While Ma’s speech may have been the tipping point, there have been long-standing economic, social, and industrial policy issues that merit the government’s action. In fact, Beijing’s recent efforts to strengthen antitrust regulation in the tech sector could facilitate a larger goal of the Chinese government: to become a technology superpower and achieve self-sufficiency, removing reliance on the West.

In this regard, how China handles antitrust law offers it a distinct competitive advantage, particularly compared with the U.S., which is also grappling with how to handle tech giants. Even though efforts to rein in companies such as Google and Facebook have gathered momentum, the U.S. government has significantly less leverage than China when it comes to antitrust law. Indeed, any U.S. legislative changes will take years to enact, and existing antitrust cases brought against Big Tech also face uphill battles in U.S. courts.

China shares some of the same concerns as the U.S. over increasing market concentration in the tech sector. However, Chinese big tech companies do not thrive because they develop innovative technologies. Rather, they build smart apps that make it easier for consumers to connect with merchants. Even though China has emerged at the forefront of e-commerce and digital payment, Chinese Big Tech still owes its success, to a large extent, to China’s vast consumer market.

Despite their sophisticated software development capabilities, companies such as Tencent and Alibaba have yet to develop foundational technologies. China’s fragility in technological innovation was clearly exposed during the Sino-American trade war—the operations of national champions such as ZTE and Huawei could be easily interrupted if the U.S. government withheld the supply of key components such as semiconductors.

China’s weakness in technological innovation explains Beijing’s recent emphasis on achieving technological self-reliance and its desire to push Chinese tech giants in this direction. Since China is the only country apart from the U.S. to have Internet giants, these tech firms are in a good position to develop digital technologies for the country. In some ways, Chinese tech giants have responded to the government’s call. Tencent has promised to invest $70 billion in new digital infrastructure. In 2019, Alibaba unveiled its first chip to power artificial intelligence. Baidu is betting heavily on driverless cars.

But Beijing wants more. Its intentions were clearly revealed in a recent editorial by the People’s Daily, a Communist Party mouthpiece, which chided tech firms for investing in the “community group-buying” market. The commentator instead urged Chinese Internet giants to forge ahead with higher ambitions, such as advancing technological innovations to clear China’s bottleneck in the intensive Sino-American rivalry, rather than focusing on selling cabbages.

In the meantime, antitrust law enforcement gives Beijing significant regulatory leverage to push its tech firms in the direction it desires. Antitrust law grants the central government strong sanctioning powers, allowing it to impose anything from astronomical monetary fines to severe structural remedies. The Chinese antitrust regulator also possesses vast administrative discretion while being subject to little judicial oversight. Furthermore, Chinese antitrust law enforcement is spearheaded by a central ministry that follows the central government’s directives carefully.

As Chinese tech giants have amassed significant market power, they have become vulnerable to antitrust regulatory attacks. And just as U.S. and EU regulators are tightening their antitrust scrutiny over Big Tech, the Chinese antitrust authority also has perfectly legitimate reasons to do so. The regulatory vulnerability of Chinese Big Tech, in turn, facilitates their cooperation with Beijing to help the latter achieve its goals, be it in antitrust or other industrial policy matters. Thus, Chinese Big Tech can and do align their business development strategies with the government’s industrial policy as a form of self-protection.

Indeed, the Chinese government views antitrust law as a powerful multipurpose tool not only for tackling monopolies, but also for achieving a wide variety of policy objectives, such as maintaining price stability, industrial planning, and trade and foreign policy. Thus, the absence of checks and balances in Chinese antitrust enforcement, supposedly an institutional weakness, could actually be a strength for Beijing as it pushes tech giants and the country toward achieving technological self-sufficiency.

Angela Huyue Zhang is the director of the Center for Chinese Law and Associate Professor of Law at the University of Hong Kong. She is the author of Chinese Antitrust Exceptionalism: How the Rise of China Challenges Global Regulation, published by Oxford University Press in March 2021. This opinion is an abridged version of an opinion that was first published with Fortune: China antitrust: How regulation helps it compete with the U.S. | Fortune.

After Difference: A Meta-Comparative Study of Chinese Encounters with Foreign Comparative Law

12. April 2021

A new paper by Samuli Seppänen

European and American comparative lawyers’ engagement with so-called “radically different” legal systems has generated much introspection and methodological controversy among comparative lawyers. Is it possible to truly understand “radically different” foreign law? Can one understand foreign law through translations? What right do comparatists have to write about areas of law which are outside their field of expertise, in the first place? Similar questions have long been raised in comparative law, but they have gained new momentum as American and European comparatists have begun to examine “non-Western” legal systems.

Yet, there remains a striking asymmetry in how such questions are conventionally posed. While many American and European comparatists have expressed concerns about intercultural comparisons, few studies have examined whether the experience of “radical difference” and its side effects—self-doubt, suspicion of cultural bias, and feelings of inadequacy—affect comparative lawyers in “radically different” legal cultures, such as China.

My article “After Difference: A Meta-Comparative Study of Chinese Encounters with Foreign Comparative Law” (free draft) examines perceptions of difference in Chinese comparative law. I seek to demonstrate that labelling foreign law as “different” or “similar” carries different political implications in China than in liberal democratic societies, such as Britain and the United States. China’s governing Communist Party sees the promotion of Western constitutional democracy as an “attempt to undermine the current leadership and the socialism with Chinese characteristics.” The Chinese leadership has also instructed legal scholars and other social scientists to develop original theories based on China’s practical conditions.

In this political climate, an emphasis on “similarity” in comparative legal scholarship often coincides with a willingness to adopt liberal legal and political reforms, whereas a conspicuous preference for “difference” implies resistance to such reforms. A legal institution that is described as foreign, and yet familiar, can be more easily advanced in China than a legal institution that can never be “truly” understood or one that is portrayed as being “radically” different from Chinese law.

Comparative law has also supported mainstream legal scholars who try to find a middle ground between conservative socialism and devotional liberalism. A comparative law focus on the social purposes of legal institutions, for instance, has allowed Chinese comparatists to denounce politically sensitive foreign legal institutions—such as the judicial review of legislation—which supposedly serve the idiosyncratic purposes of Western societies, while at the same time endorsing and advocating politically less controversial legal reforms.

To be sure, there are many nuances in Chinese comparative law. An emphasis on difference can be a liberal strategy, whereas arguments about similarity have been used to resist legal and political reforms. It is also true that many Chinese comparatists are sufficiently familiar with American and European law so as not to experience them as exotic. The question of (radical) difference and similarity also relates to Chinese legal scholars’ professional identity and worldview. Whereas American and European comparatists may view Chinese comparatists (and indeed, all students of Chinese law) as being on the margins of their discipline, Chinese mainstream comparatists are committed to learning and understanding foreign law. This attitude is not limited to Chinese studies of European and American law, but it can also be seen in some Chinese research on non-European legal systems, such as Hindu law.

Finally, the larger argument of my Article is that statements about difference and similarity—and attitudes towards understanding, in general—should be understood in light of the individual scholar’s ideological project. There is no ideologically innocent way to relate to foreign legal systems either in China or abroad. Scholars who encounter legal systems that at first seem difficult or even impossible to “understand” would do well to remember that difference and similarity are matters of perception—and, it would appear, not the most fruitful theoretical basis for legal research.

Find Samuli Seppänen’s free draft of “After Difference: A Meta-Comparative Study of Chinese Encounters with Foreign Comparative Law” here. He is an Associate Professor at the Chinese University of Hong Kong. His research focuses on legal and political thought in China and developmental aspects of international law. Reach out to him at sseppanen(at)cuhk.edu.hk.

American Constitutional Law in China

22. March 2021

A new paper by Han Liu

American constitutional law has influenced various countries, but what about China? For conventional account, the answer is, little, given China’s socialist constitutional system and continental legal thinking. Diving into a relatively unexplored domain, Han Liu traces the reception of American constitutional law in post-Reform China, arguing that American constitutional law has greatly influenced Chinese constitutional thinking, sometimes even generating practical reform projects (article, free draft).

One influential Chinese text book on US-American Constitutional Law

To be sure, American constitutionalism had almost no influence in proto-socialist China (1949–1979). In 1979, as China and the United States established diplomatic relations, interest in American constitutional system began to surge. Translations, studies, and introductions about American constitutional law started to grow rapidly. This academic project also influenced practice, especially by providing an example of the separation of powers and judicial review.

Han Liu points out that there has been a great change in Chinese understandings of American constitutionalism, that is, from “regime-centered” to “court-centered”. These two exerted different practical influences. In the 1980s, American constitutionalism was generally tantamount to tripartite “separation of powers” to Chinese intellectuals, legal or otherwise, and even political leaders. Deng famously said that “I always criticize the American power holders for having three governments.” Despite Deng’s critique, others tried, without success, to learn from the American example, bringing checks and balances into the Chinese system.

But at the turn of the century, especially in the early 2000s, American constitutionalism shows a different face. For many legal scholars and lawyers, it was understood as synonomous with judicial review. They came to believe that a constitution remains a dead letter if not used in courts and litigations, as in the US. The US Supreme Court, with its power to enforce the Constitution, now took the center stage in the Chinese understandings. Its Chinese counterpart, from 2001 to 2008, even introduced an American model of judicial review into the Chinese judicial system.

Why has this happened? It was not simply a “response-impact” mechanism. Rather, China’s different receptive attitudes towards American constitutional law hinge upon China’s own frame of reference in the legal reform. As the authorities began to construct “the rule of law” in the 1990s, the Constitution had to be activated in practice. Then the American model became attractive.

In the space between theory and practice, the Chinese constitutional mind becomes receptive to American influence.

This logic also explains the decline of American influence in Chinese constitutional theory and practice in the last ten years. While the authorities declare the principle of “governing according to the constitution”, they at the same time stress China’s distinction from “Western” models, especially the US. In due course, American constitutionalism in China will perhaps no longer be the single idol to adore, let alone the best model to follow.

Looking back, American constitutionalism’s impacts on Chinese constitutional development depend upon the internal logic and dynamics of Chinese reform, which determines the optics in the reception of foreign law. The fundamental change in Chinese understandings of American constitutionalism reflects the great transformation in the deep structure of Chinese ideology and jurisprudence.

Han Liu is Associate Professor at Tsinghua University Law School and Deputy Director of Tsinghua Institute for Law and AI. He researches comparative constitutional law, cyber law and policies, and legal theory. His recent paper ‘Regime-Centered and Court-Centered Understandings: The Reception of American Constitutional Law in Contemporary China’ (free draft here) appears in American Journal of Comparative Law, selected as one of the top 10 comparative law articles in the Best of 2020 Law Journals from Oxford University Press. His book Think Big and Beyond Yourself: Law as a Way of Thinking (in Chinese) won “The 10 Best Books 2020 in Law” in China. His online course “Legal Thinking” has attracted more than 70, 000 subscribers. Reach out to him at liuhan[at]tsinghua.edu.cn.

Two Paradigms of Emergency Power: Hong Kong’s Liberal Order Meeting the Authoritarian State

15. March 2021

A new paper by Hualing Fu and Xiaobo Zhai

The Covid-19 pandemic since February 2020 and the Hong Kong National Security Law (HKNSL) passed on June 30, 2020 have set an abrupt end to the protests in Hong Kong, which, according to its mini-Constitution, the Basic Law, enjoys ‘high degree autonomy’ under China’s sovereignty and shall be administered by Hong Kong people. Activating Article 18 (4) of the Basic Law, declaring a state of emergency, and deploying the army to restore order in Hong Kong were under wide and lively discussion in September 2019 (for contributions, see here, here, here, and here). One aim of the HKNSL, as pointed out by Shen Chunyao, head of Beijing’s Basic Law Committee, is to pre-empt the occurrence of the state of emergency provided in Article 18 (4) of the Basic Law, which, Shen stressed, is “a very serious situation”: it is even much worse than Beijing taking over complete jurisdiction and applying Mainland laws in exceptional national security cases (article 55, HKNSL).

What will this “very serious situation” be like? An answer can be found in the Basic Law’s Art. 18 (4), which says,

in the event that the NPCSC … by reason of turmoil within the HKSAR which endangers national unity or security and is beyond the control of the government of the Region, decides that the Region is in a state of emergency, the Central People’s Government may issue an order applying the relevant national laws in the Region.

Fu and Zhai argue that Article 18(4) creates a dual emergency regime: Hong Kong’s own internal one and the NPCSC’s external one. The former is based on the rule of law, where the emergency power is subject to significant legal and political constraints. The latter, however, introduces a state of exception, where an authoritarian state manages a crisis, largely independent of legal rules and without democratic responsibility. In view of this contrast, Fu and Zhai suggest that the HKSAR internalise the responses to states of emergency, so that rights and freedoms be carefully protected, and the rule of law be effectively defended.

Find the free PDF of the paper here.

Hualing Fu is Dean and holder of the Warren Chan Professorship of Human Rights and Responsibilities, Faculty of Law, the University of Hong Kong. His more recent contributions include: Mediation in Contemporary China (2017); Transparency Challenges Facing China (2018); Socialist Law in Socialist East Asia (2018), and Authoritarian Legality in Asia (2020). Reach out to him at hlfu(at)hku.hk.

Xiaobo Zhai is Associate Professor at Macau University. He co-edited the volumes Bentham’s Theory of Law and Public Opinion (2014) and Bentham Around the World (2020) and is the author of The People’s Constitution (2009) and China’s System of Constitutional Implementation (2009). Reach out to him at xbzhai(at)um.edu.mo.

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.