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Feeling the Stone Feeling the Stone When Crossing the When Crossing the River: China’s River: China’s Efforts and Efforts and Achievements in Achievements in Promoting the Rule Promoting the Rule of Law of Law Zhang Fan Zhang Fan

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Page 1: Feeling the Stone When Crossing the River: China ’ s Efforts and Achievements in Promoting the Rule of Law Zhang Fan

Feeling the Stone Feeling the Stone When Crossing the When Crossing the

River: China’s River: China’s Efforts and Efforts and

Achievements in Achievements in Promoting the Rule Promoting the Rule

of Lawof LawZhang FanZhang Fan

Page 2: Feeling the Stone When Crossing the River: China ’ s Efforts and Achievements in Promoting the Rule of Law Zhang Fan

ContentsContents Part 1. Preliminary Definitions and DistinctionsPart 1. Preliminary Definitions and Distinctions A The Rule of Law——A Survey of MeaningsA The Rule of Law——A Survey of Meanings B Fazhi, Renzhi, and InstrumentalismB Fazhi, Renzhi, and Instrumentalism C A Rough-and-Ready DefinitionC A Rough-and-Ready Definition D The Rule of Law in Dynastic China D The Rule of Law in Dynastic China Part 2. Chinese Legal SystemPart 2. Chinese Legal System A Historical DevelopmentA Historical Development B Constitutional Amendment in 1999B Constitutional Amendment in 1999 C The rule of law in contemporary China C The rule of law in contemporary China D The Construction of a Legal System for China’D The Construction of a Legal System for China’

s Market Economys Market Economy

Page 3: Feeling the Stone When Crossing the River: China ’ s Efforts and Achievements in Promoting the Rule of Law Zhang Fan

A The Rule of LawA The Rule of Law——A Survey of ——A Survey of

MeaningsMeanings

Page 4: Feeling the Stone When Crossing the River: China ’ s Efforts and Achievements in Promoting the Rule of Law Zhang Fan

The rule of law has recently for The rule of law has recently for many people and institutions around many people and institutions around the world a goal, a requirement, a the world a goal, a requirement, a standard, a fetish, perhaps even a standard, a fetish, perhaps even a religion. religion.

But what does it mean?But what does it mean? In the Box#1, I list several elements In the Box#1, I list several elements

that appear with some regularity in that appear with some regularity in rule- of-law definitions.rule- of-law definitions.

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Notice:Notice:

They are not by all means all consistent with They are not by all means all consistent with each other, and they receive very different each other, and they receive very different degrees of attention and nuances of meaning degrees of attention and nuances of meaning by various observers.by various observers.

In perusing the various elements in Box#1, we In perusing the various elements in Box#1, we might consider them as a background to move might consider them as a background to move toward a working definition that we can use in toward a working definition that we can use in assessing China’s adherence to the rule of law.assessing China’s adherence to the rule of law.

The listing of various elements and assertions The listing of various elements and assertions is not intended to reflect their order of is not intended to reflect their order of importance.importance.

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Box#1 Box#1 An Array of Typical An Array of Typical ElementsElements

The law must be consensual in its origin -that The law must be consensual in its origin -that is, emerging from a general agreement or is, emerging from a general agreement or acceptance throughout the society, as acceptance throughout the society, as opposed to being autocratic in origin. opposed to being autocratic in origin.

The rules in the legal system are created The rules in the legal system are created democratically -that is, with some input democratically -that is, with some input (whether direct or indirect) by the subjects or (whether direct or indirect) by the subjects or citizens of the state. citizens of the state.

The rules do not emerge from the arbitrary The rules do not emerge from the arbitrary will or judgment of a person or group of will or judgment of a person or group of persons wielding coercive governmental persons wielding coercive governmental power. power.

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The government officials are required to The government officials are required to act in accordance with pre-existing law. act in accordance with pre-existing law.

The law therefore rules over the The law therefore rules over the government and the governed alike. government and the governed alike.

The law is viewed as being in part a The law is viewed as being in part a mechanism to prevent government agents mechanism to prevent government agents from oppressing the rest of society. from oppressing the rest of society.

The government is therefore restricted The government is therefore restricted from infringing upon an inviolable realm from infringing upon an inviolable realm of personal autonomy. of personal autonomy.

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The powers of the government are divided The powers of the government are divided into separate compartments -typically into separate compartments -typically legislative, executive, and judicial -with legislative, executive, and judicial -with checks and balances preventing any one checks and balances preventing any one compartment from dominating the others, compartment from dominating the others, and therefore the entire legal system. and therefore the entire legal system.

The judicial power of the state is largely The judicial power of the state is largely separate from and independent of the holders separate from and independent of the holders of the executive and legislative power.of the executive and legislative power.

The people in the society have a right to The people in the society have a right to determine who will govern them and how determine who will govern them and how they will be governed. they will be governed.

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The people in the society also have certain The people in the society also have certain other fundamental rights whose exercise helps other fundamental rights whose exercise helps prevent unfettered governmental power -these prevent unfettered governmental power -these include rights to the freedom of speech, include rights to the freedom of speech, assembly, press, and religion, as well as rights assembly, press, and religion, as well as rights against arbitrary arrest and unjustified against arbitrary arrest and unjustified detention. detention.

The rules in the legal system reflect a theme of The rules in the legal system reflect a theme of limited power of government, so that the limited power of government, so that the rights and authority of the state are restricted, rights and authority of the state are restricted, and all rights and authorities not expressly and all rights and authorities not expressly granted to the state are reserved to the granted to the state are reserved to the people. people.

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The rules in the legal system are reasonably The rules in the legal system are reasonably consistent over time.consistent over time.

The rules in the legal system are applicable to all The rules in the legal system are applicable to all persons in the society.persons in the society.

Nobody, therefore, is "above the law." Nobody, therefore, is "above the law." The rules in the legal system are general, not The rules in the legal system are general, not

particular, in the scope of their application.particular, in the scope of their application. The legal system guarantees procedural fairness The legal system guarantees procedural fairness

("due process") – that is, certain basic rights of ("due process") – that is, certain basic rights of process must be followed in order for the process must be followed in order for the government to act against the interests of an government to act against the interests of an individual, including his or her economic individual, including his or her economic interests. interests.

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The legal system treats all people in the society The legal system treats all people in the society with equality and with respect.with equality and with respect.

The legality of a person's treatment by the organs The legality of a person's treatment by the organs of state power depends on its being shown to serve of state power depends on its being shown to serve the common good - including the good that comes the common good - including the good that comes to all members of society by prohibiting harsh to all members of society by prohibiting harsh treatment of treatment of anyany member of society, even a member of society, even a member of an unpopular minority.member of an unpopular minority.

Distinctions made between people or classes of Distinctions made between people or classes of people must be justifiable on rational grounds and people must be justifiable on rational grounds and not purely on the basis of race or religious belief or not purely on the basis of race or religious belief or ethnicity or gender or on other grounds that reflect ethnicity or gender or on other grounds that reflect an attempt at dominance by one group over an attempt at dominance by one group over another. another.

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The law establishes limits on the state's The law establishes limits on the state's power not only of a procedural character power not only of a procedural character but also of a substantive character, so that but also of a substantive character, so that certain fundamental substantive rights - certain fundamental substantive rights - usually set forth in a constitution - are usually set forth in a constitution - are guaranteed. guaranteed.

The law should be employed to safeguard The law should be employed to safeguard and advance the civil and political rights of and advance the civil and political rights of the individual and to create conditions the individual and to create conditions under which the individual's legitimate under which the individual's legitimate aspirations and dignity may be realized. aspirations and dignity may be realized.

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The law also requires that the state take The law also requires that the state take measures to prevent encroachment by measures to prevent encroachment by powerful members of the society on the powerful members of the society on the rights of other members of society.rights of other members of society.

All members of the society are assumed to All members of the society are assumed to have moral rights and duties with respect to have moral rights and duties with respect to one another.one another.

Among the duties of citizens is the duty to Among the duties of citizens is the duty to submit to and obey the positive laws of the submit to and obey the positive laws of the state, in order to preserve civil society and state, in order to preserve civil society and avoid anarchy or social chaos.avoid anarchy or social chaos.

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The law provides people with the right to bring The law provides people with the right to bring any non-frivolous allegation of government any non-frivolous allegation of government abuse before a competent court.abuse before a competent court.

The law acts as a constant impediment to The law acts as a constant impediment to arbitrary or overly discretionary authority on arbitrary or overly discretionary authority on the part of the government.the part of the government.

Any executive or administrative action Any executive or administrative action infringing on individual rights must be infringing on individual rights must be authorized by law -that is, it must have a legal authorized by law -that is, it must have a legal foundation conferring authority to act.foundation conferring authority to act.

Any punishment that the law prescribes for a Any punishment that the law prescribes for a transgression of the rules should be transgression of the rules should be proportionate in its severity to the seriousness proportionate in its severity to the seriousness of the transgression.of the transgression.

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The law in the society must be clear and The law in the society must be clear and accessible to (and therefore understandable accessible to (and therefore understandable by) members of the society.by) members of the society.

The law protects a broad range of economic The law protects a broad range of economic rights, by which members of the society may rights, by which members of the society may keep what they earn and may enter into keep what they earn and may enter into contracts and alliances (such as business contracts and alliances (such as business entities) as they wish.entities) as they wish.

The law also provides at least a "safety net" The law also provides at least a "safety net" of economic protections, so that members of of economic protections, so that members of society are not preyed upon by powerful and society are not preyed upon by powerful and unscrupulous economic actors.unscrupulous economic actors.

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B Fazhi, Renzhi, anB Fazhi, Renzhi, and Instrumentalismd Instrumentalism

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"rule of man" "rule of man" The third of these - "rule of man" - is easy to The third of these - "rule of man" - is easy to

picture: it is totalitarianism, with power picture: it is totalitarianism, with power concentrated in a single person or small cluster of concentrated in a single person or small cluster of persons who themselves stand outside the law and persons who themselves stand outside the law and who rule predominantly by who rule predominantly by ad hocad hoc( ( Ad hocAd hoc is a is a Latin phrase meaning "for this") directives, giving Latin phrase meaning "for this") directives, giving little or no attention to the rights of individuals or little or no attention to the rights of individuals or to the promulgation and application of clear and to the promulgation and application of clear and consistent rules. History is replete with examples consistent rules. History is replete with examples of such forms of law and governance. of such forms of law and governance.

Now according to your experience, I ’d like to Now according to your experience, I ’d like to know your comments on the concept of “rule of know your comments on the concept of “rule of man”.man”.

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"rule by law" and "rule of la"rule by law" and "rule of law" w"

These two notions can perhaps be best These two notions can perhaps be best distinguished by focusing on two related distinguished by focusing on two related elements: (i) the role of discretion and (ii) the elements: (i) the role of discretion and (ii) the application of the law to government officials. application of the law to government officials.

Under the "rule Under the "rule by by law" notion, while law" notion, while government officials typically would rely on government officials typically would rely on written rules rather than pure discretion in written rules rather than pure discretion in governing the state, those officials would governing the state, those officials would ultimately have discretion to depart from the ultimately have discretion to depart from the rules in circumstances that they deemed rules in circumstances that they deemed exceptional. Moreover, as the existence of exceptional. Moreover, as the existence of such discretion would imply, the government such discretion would imply, the government officials themselves would not be bound by the officials themselves would not be bound by the rules. rules.

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Under the "rule Under the "rule of of law" notion, the law" notion, the government officials government officials would would be bound by be bound by the rules and therefore would not have the rules and therefore would not have discretion to depart from them. Instead discretion to depart from them. Instead of exercising discretion in exceptional of exercising discretion in exceptional circumstances, the government officials circumstances, the government officials would need to await the adoption of an would need to await the adoption of an official amendment of the rules to official amendment of the rules to accommodate such exceptional accommodate such exceptional circumstances.circumstances.

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"instrumentalism" "instrumentalism"

A term often used to capture the A term often used to capture the same concept as "rule by law" same concept as "rule by law" (distinguishing that concept from (distinguishing that concept from "rule of law") is "instrumentalism." "rule of law") is "instrumentalism." Pitman Potter offers this explanation Pitman Potter offers this explanation of that term in the context of of that term in the context of contemporary Chinese law:contemporary Chinese law:

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Pitman Potter Pitman Potter The Chinese government's approach to law is

fundamentally instrumentalist. This means that laws and regulations are intended to be instruments of policy enforcement. Legislative and regulatory enactments are not intended as expressions of immutable general norms that apply consistently in a variety of human endeavors, and neither are they constrained by such norms. Rather, laws and regulations are enacted explicitly to achieve the immediate policy objectives of the regime. Law is not a limit on state power; rather, it is a mechanism by which state power is exercised, as the legal forms and institutions that comprise the Chinese legal system are established and operate to protect the Party/state's political power.

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Stanley Lubman Stanley Lubman Stanley Lubman uses the same term - instrumStanley Lubman uses the same term - instrum

entalism - in describing the course of legal refentalism - in describing the course of legal reform in China since the new PRC regime was dorm in China since the new PRC regime was declared in 1949:eclared in 1949:

The last two decades of the twentieth century saw the Chinese leadership begin to use law as an instrument of governance in a manner relatively more sophisticated than the crude and formalistic copying of Soviet law in the early 1950s or the blunt instrumentalism -and worse - that had followed.

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I interpret Lubman's observation to mean I interpret Lubman's observation to mean that following the establishment ofthat following the establishment of the PRthe PRC in 1949, the Chinese leadership first miC in 1949, the Chinese leadership first mimicked Soviet law and thenmicked Soviet law and then moved toward moved toward blunt instrumentalism - in which law is seblunt instrumentalism - in which law is seen purely as anen purely as an instrument of state powerinstrument of state power - and then deteriorated into something wo - and then deteriorated into something worse during therse during the Cultural Revolution when alCultural Revolution when all law was essentially abolished, before entl law was essentially abolished, before entering into aering into a new phase in the last two decanew phase in the last two decades of the twentieth century.des of the twentieth century.

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These three terms - rule of law, rule by These three terms - rule of law, rule by law, and rule by man - may be seen, thlaw, and rule by man - may be seen, therefore, as describing three different perefore, as describing three different points along a spectrum. oints along a spectrum.

The first one - rule of law, for which thThe first one - rule of law, for which the Chinese term e Chinese term is fazhi is fazhi and the Chinesand the Chinese characters are e characters are 法治法治 - - represents a sysrepresents a system in which the actions of governmetem in which the actions of government authorities are subject entirely to thnt authorities are subject entirely to the control of the written law. e control of the written law.

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The second one - rule of man, for which the CThe second one - rule of man, for which the Chinese term is hinese term is renzhi renzhi and the Chinese charactand the Chinese characters are ers are 人治人治 - - represents a system in which gorepresents a system in which government authorities sit outside the control overnment authorities sit outside the control of the law, and in fact govern not predominantf the law, and in fact govern not predominantly through law at all but instead through discrly through law at all but instead through discretion. In fact, Confucius urged that the rules etion. In fact, Confucius urged that the rules of propriety - the of propriety - the Li Li 礼礼 - typically should not t- typically should not take written form and could in any event neveake written form and could in any event never be fully encompassed in written form. r be fully encompassed in written form.

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The third one - rule The third one - rule by by law - law - represents a hybrid of the two, represents a hybrid of the two, under which government officials under which government officials apply formal, written, perhaps apply formal, written, perhaps detailed rules but are not themselves detailed rules but are not themselves bound by those rules.bound by those rules.

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C A Rough-and-C A Rough-and-Ready DefinitionReady Definition

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A working definitionA working definition A society may be said to adhere to the rule of law if A society may be said to adhere to the rule of law if

the rules in its legal system are publicly the rules in its legal system are publicly promulgated, reasonably clear in their formulation, promulgated, reasonably clear in their formulation, prospective in their effect, reasonably stable over prospective in their effect, reasonably stable over time, reasonably consistent with each time, reasonably consistent with each other ,applicable to all segments of the society other ,applicable to all segments of the society (including the government, so as to prevent the (including the government, so as to prevent the government elite from acting arbitrarily), government elite from acting arbitrarily), reasonably comprehensive in their coverage of reasonably comprehensive in their coverage of substantive issues facing the society and its substantive issues facing the society and its people, and reasonably effective, in the sense that people, and reasonably effective, in the sense that the rules are broadly adhered to by the people in the rules are broadly adhered to by the people in the society - voluntarily by most, and through the society - voluntarily by most, and through officially forced compliance where necessary.officially forced compliance where necessary.

Your comments on the definition? Your comments on the definition?

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Notice:Notice:

It should be obvious that my rough-and-ready It should be obvious that my rough-and-ready definition would surely seem overly narrow definition would surely seem overly narrow and simplistic to some observers - especially and simplistic to some observers - especially those from whom I have drawn some of the those from whom I have drawn some of the elements appearing above in elements appearing above in Box Box #1. #1.

Although the definition mentioned above is Although the definition mentioned above is not sophisticated, for the purpose of the not sophisticated, for the purpose of the lecture, it is enough. Based on the definition, I lecture, it is enough. Based on the definition, I will introduce contemporary Chinese legal will introduce contemporary Chinese legal system and the rule of law in China.system and the rule of law in China.

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D The Rule of D The Rule of Law in Dynastic Law in Dynastic

China China

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QuestionQuestion Was the rule of law present in dynastic China - Was the rule of law present in dynastic China -

that is, in the China that emerged well over that is, in the China that emerged well over two thousand years ago and lasted until the two thousand years ago and lasted until the end of the Qing dynasty in 1911?end of the Qing dynasty in 1911?

As we all know, in ancient China, there are all As we all know, in ancient China, there are all sorts of sophisticated codes and effective sorts of sophisticated codes and effective governance. But did these legal codes, and the governance. But did these legal codes, and the values they reflected, give dynastic China the values they reflected, give dynastic China the "rule of law"? No. For reasons that I shall only "rule of law"? No. For reasons that I shall only sketch out briefly here, it seems clear that the sketch out briefly here, it seems clear that the dynastic Chinese legal system, even at its dynastic Chinese legal system, even at its most sophisticated, would fail to meet at least most sophisticated, would fail to meet at least two of the standards included in the "rule of two of the standards included in the "rule of law" definition offered above. law" definition offered above.

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Two Standards Two Standards

First, the legal system - centered on its First, the legal system - centered on its sophisticated legal codes- was not sophisticated legal codes- was not "applicable to all segments of the society" "applicable to all segments of the society" because it did not apply to the ruling elite because it did not apply to the ruling elite in the government. In a system dominated in the government. In a system dominated by an all-powerful emperor who exercises by an all-powerful emperor who exercises totalitarian control and is above the law - totalitarian control and is above the law - indeed, is the sole ultimate author of the indeed, is the sole ultimate author of the law, with recognized authority to change it law, with recognized authority to change it at will – the rule of law cannot be said to at will – the rule of law cannot be said to exist.exist.

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Second, the rules set forth in the dynastic Chinese legal coSecond, the rules set forth in the dynastic Chinese legal codes were by no means des were by no means "comprehensive in their coverage o"comprehensive in their coverage of substantive issues facing the society and itsf substantive issues facing the society and its people." people." EveEven though the very last versions of the codes did (according n though the very last versions of the codes did (according to academic discoveries made in just the past few decadeto academic discoveries made in just the past few decades) include some rules relating more directly to s) include some rules relating more directly to minshi minshi (pe(people's matters),24 the fact remains that for the bulk of the ople's matters),24 the fact remains that for the bulk of the Chinese population, personal behavior was most directly Chinese population, personal behavior was most directly and importantly influenced not by the applicable law codand importantly influenced not by the applicable law code but instead by traditional rules of moral and ethical cone but instead by traditional rules of moral and ethical conduct among members of family and society. In other wordduct among members of family and society. In other words, even at their most sophisticated, the law codes that distis, even at their most sophisticated, the law codes that distinguish the Chinese dynastic legal tradition did not occupy nguish the Chinese dynastic legal tradition did not occupy a very large portion of the total area of rules governing hua very large portion of the total area of rules governing human behavior in China.man behavior in China.

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Both of the two features I alluded to above - that the codes were not applicable to all segments of the society and that they were not comprehensive in their coverage of substantive issues - are noted in the following words of Professor Bill Jones:

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Bill JonesBill Jones The polity of China consisted of a highly central

ized government headed by an absolute ruler who ruled by means of a bureaucracy. The primary obligation of every Chinese was to fulfil the duties assigned to him by the Emperor. All human activities had to be carried on so as to fit into his scheme for directing society. Consequently one would expect the imperial law or Code to take note of human activity only as it was perceived to affect imperial policies. It was natural that the primary focus of attention would be the activities of bureaucrats in the performance of their duties, not the activities of ordinary human beings in their private lives.

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Conclusion:Conclusion:

Despite the fact that Chinese dynastic Despite the fact that Chinese dynastic law does seem to meet the "rule of law" law does seem to meet the "rule of law" standards in these several aspects, its standards in these several aspects, its failure to meet the other two standards - failure to meet the other two standards - those regarding applicability to the those regarding applicability to the government and comprehensiveness of government and comprehensiveness of coverage - is fatal. I would conclude coverage - is fatal. I would conclude from this very abbreviated review that from this very abbreviated review that dynastic China was not governed by the dynastic China was not governed by the "rule of law" as defined above."rule of law" as defined above.

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2. Chinese Legal 2. Chinese Legal SystemSystem

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Question:Question:

What about the situation in today's China? Is CWhat about the situation in today's China? Is China operating under the rule of law in hina operating under the rule of law in 2011?2011?

What is your point of view?What is your point of view? We might start to address that question We might start to address that question by by seeiseei

ng how some observers have drawn a parallel ng how some observers have drawn a parallel between dynastic China and contemporary Chibetween dynastic China and contemporary China. One authority, Wejen Chang, offers this pena. One authority, Wejen Chang, offers this perspective, some of which reminds us of the Corspective, some of which reminds us of the Confucianist-Legalist debate referred to above: nfucianist-Legalist debate referred to above:

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Wejen ChangWejen Chang Since the late nineteenth century, when China began its moderniza

tion, fazhi, a translation of the Western term "the rule of law," has gained popularity among the Chinese – first the intellectuals, then the common people. Now most Chinese want to see fazhi established in China .... The concepts of fazhi and its opposite, renzhi, or the rule of man, are not entirely new to the Chinese. Ancient records indicate that similar ideas were the subject of serious discussions among earlier philosophers and led to heated debates between the Confucians and the Legalists. The first debate was probably provoked in 536 B.C., by an order of Zi Chan, the prime minister of the state of Zheng, to have the criminal law of his state inscribed on a bronze vessel put on public display. It was meant by him and understood by his contemporaries as a dramatic gesture to demonstrate the permanence of the law and to assure the people that the law would be applied strictly according to its letter, free of government manipulation.

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This last element that Wejen Chang refers to in terms of tThis last element that Wejen Chang refers to in terms of the rule of law he rule of law – – that the application of the law would be "fthat the application of the law would be "free of government manipulation" – is absent from the "rulree of government manipulation" – is absent from the "rule of man" e of man" (renzhi) (renzhi) model that the Confucianists found premodel that the Confucianists found preferable. ferable.

Since 1911 Chinese law has never achieved the sort of systSince 1911 Chinese law has never achieved the sort of systemic sophistication that it had developed over centuries oemic sophistication that it had developed over centuries of cultivation under the generations of Confucian scholars f cultivation under the generations of Confucian scholars in the Han, Tang, Song, Ming, and Qing eras. in the Han, Tang, Song, Ming, and Qing eras.

Instead, Chinese law has in the past hundred years or so vInstead, Chinese law has in the past hundred years or so vacillated between two modes: that of a fairly obvious acillated between two modes: that of a fairly obvious renzrenzhi hi (rule of man, as for example during most of Mao Zedon(rule of man, as for example during most of Mao Zedong's dictatorship) and that of a hybrid system that gives sog's dictatorship) and that of a hybrid system that gives some deference to me deference to fazhi fazhi (rule of law) but with elements also (rule of law) but with elements also of of renzhi.renzhi.

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A Historical A Historical DevelopmentDevelopment

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B Constitutional B Constitutional Amendment in Amendment in

19991999

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After the Cultural Revolution, China has been After the Cultural Revolution, China has been modifying, refining and accomplishing the legal modifying, refining and accomplishing the legal system. system.

Newly enacted laws were inconsistent with older laws Newly enacted laws were inconsistent with older laws covering similar topics, and many areas were not yet covering similar topics, and many areas were not yet addressed at all. Hence, the system had to be refined addressed at all. Hence, the system had to be refined and amended. Beginning in the mid- 1980s, the and amended. Beginning in the mid- 1980s, the existing body of law was modified, refined, and existing body of law was modified, refined, and accomplished. Below are some examples of the accomplished. Below are some examples of the progress. progress.

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The Constitution of 1982 was high The Constitution of 1982 was high quality. It is reported that about 140 quality. It is reported that about 140 constitutions from all around the world constitutions from all around the world were considered in drafting this first were considered in drafting this first post-Cultural Revolution Constitution. post-Cultural Revolution Constitution. It already enshrined a chapter on basic It already enshrined a chapter on basic rights, although restricted to citizens rights, although restricted to citizens of the People’s Republic of China. of the People’s Republic of China.

To give but some examples:To give but some examples:

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Can you talk about Can you talk about some articles of some articles of constitution on constitution on human rights in human rights in your country?your country?

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Fundamental DutiesFundamental Duties

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Probably one of the most Probably one of the most complicated problems was raised by complicated problems was raised by the new economic concept. The the new economic concept. The Constitution of 1982 only Constitution of 1982 only hesitatingly shifted from a socialistic hesitatingly shifted from a socialistic planned economy towards a special planned economy towards a special type of socialist market economy:type of socialist market economy:

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Private economy was only Private economy was only collateral:collateral:

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The Constitution of 1982 was The Constitution of 1982 was significantly modified in 1988 and 1993, significantly modified in 1988 and 1993, and it was last amended in 2004. and it was last amended in 2004.

Modifications obviously are not due to Modifications obviously are not due to bad drafting of the 1982 Constitution but bad drafting of the 1982 Constitution but instead reflect political developments. instead reflect political developments.

They mostly address the economic They mostly address the economic system and the attitude towards system and the attitude towards property.property.

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But a little later Article 11 describes But a little later Article 11 describes this economy as a socialist market this economy as a socialist market economy, adding that the individual, economy, adding that the individual, private, and nonpublic economies private, and nonpublic economies are major parts of the socialist are major parts of the socialist economy and that they are economy and that they are encouraged, supported and guided encouraged, supported and guided by the State:by the State:

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As far as foreign enterprises and As far as foreign enterprises and organizations are concerned, the organizations are concerned, the 2004 Constitution has fostered their 2004 Constitution has fostered their protection. protection.

Subsection 2 of Article 18 has been Subsection 2 of Article 18 has been amended by a clause protecting amended by a clause protecting lawful rights and interests of foreign lawful rights and interests of foreign enterprises and economic enterprises and economic organization:organization:

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Finally, protection of private Finally, protection of private property has been strengthened.property has been strengthened.

The 1982 Constitution still heavily The 1982 Constitution still heavily relied on public ownership of all relied on public ownership of all means of production.means of production.

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However, already this first However, already this first post-Cultural Revolution post-Cultural Revolution Constitution of 1982 Constitution of 1982 contained the beginning of contained the beginning of the recognition and the recognition and protection of private protection of private property.property.

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In debating the question of what role law plays In debating the question of what role law plays in today's China - that is, whether that country in today's China - that is, whether that country is best characterized now as having rule of is best characterized now as having rule of law, rule law, rule by by law, or rule law, or rule by by man man (instrumentalism) - observers sometimes focus (instrumentalism) - observers sometimes focus on the actual language of the Constitution of on the actual language of the Constitution of the PRC, and particularly the language the PRC, and particularly the language appearing in the amendments made in appearing in the amendments made in 1999. 1999. The pertinent text of those amendments The pertinent text of those amendments appears in Box appears in Box #2, #2, along with information along with information about varying translations into English.about varying translations into English.

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Box # 2Box # 2 Amendment Amendment Three Three (approved on March 15, 1999,(approved on March 15, 1999,

by the 9th NPC at its 2nd Session) by the 9th NPC at its 2nd Session) The English version of the text of the amendmenThe English version of the text of the amendmen

t, as reported on the People's Daily website t, as reported on the People's Daily website -- http://english.peopledaily.com.cn/constitution/chttp://english.peopledaily.com.cn/constitution/c

onstitution.html - reads as follows:onstitution.html - reads as follows: One section is added to Article Five of the ConstiOne section is added to Article Five of the Consti

tution as the first section: "The People's Republic tution as the first section: "The People's Republic of China practices ruling the country in accordaof China practices ruling the country in accordance with the law [yifa zhiguo] and building a socince with the law [yifa zhiguo] and building a socialist country of law [lianshe shehui zhuyifazhi galist country of law [lianshe shehui zhuyifazhi guojia].uojia].

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The key phrases are examined below - first in The key phrases are examined below - first in pinyin, pinyin, then in Chinese characters, then in English translatiothen in Chinese characters, then in English translation using the People's Daily translation as above, then n using the People's Daily translation as above, then with some alternative translations from various sourcwith some alternative translations from various sources.es.

YifazhiguoYifazhiguo —— 依法治国依法治国 ——"ruling the country in accordance with the law" (Pe"ruling the country in accordance with the law" (Pe

ople's Daily translation) ople's Daily translation) ——or or "governs the country according to law" - accordi"governs the country according to law" - accordi

ng to the PRC Government's so-called "official web pong to the PRC Government's so-called "official web portal," at rtal," at http://www.npc.gov.cn/englishnpc/Constitution/nodehttp://www.npc.gov.cn/englishnpc/Constitution/node_2827.htm_2827.htm or or "govern the country according to law" (Peerenboo"govern the country according to law" (Peerenboom - see below)m - see below)

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jianshe shehui zhuyifazhi guojiajianshe shehui zhuyifazhi guojia —— 建设社会主义法治国家建设社会主义法治国家 ——"building a socialist country of law" "building a socialist country of law" or or "makes it "makes it

a socialist country ruled by law" - according to thea socialist country ruled by law" - according to the PRC Government's so-called "official web portal," PRC Government's so-called "official web portal,"

at at http://www.npc.gov.cn/englishnpc/Constitution/nhttp://www.npc.gov.cn/englishnpc/Constitution/node_2827.htmode_2827.htm

or or "establish a socialist rule of law country" (Peere"establish a socialist rule of law country" (Peerenboom – see below)nboom – see below)

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As noted in Box #2, the key language (in As noted in Box #2, the key language (in pipinyin) nyin) proclaims the policy proclaims the policy "yifa zhiguo, jia"yifa zhiguo, jianshe shehuizhuyifazhiguo," nshe shehuizhuyifazhiguo," which has beewhich has been translated literally by onen translated literally by one (Western) exp(Western) expert - Randall Peerenboom - as "govern the ert - Randall Peerenboom - as "govern the country according tocountry according to law, establish a socialaw, establish a socialist rule of law country." Peerenboom offerlist rule of law country." Peerenboom offers thiss this explanation of that language and sugexplanation of that language and suggests that it has been misinterpreted by sogests that it has been misinterpreted by someme commentators who urge that China is commentators who urge that China is not serious about the rule of law:not serious about the rule of law:

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[The assumption that a socialist system such as [The assumption that a socialist system such as China's] could not be serious about legal reforChina's] could not be serious about legal reforms and the rule of law.., is evident in the way ms and the rule of law.., is evident in the way many Western reporters and some academics tmany Western reporters and some academics translate the phrasefazhi. This phrase by itself ranslate the phrasefazhi. This phrase by itself could be translated as either rule of law or rule could be translated as either rule of law or rule by law, as there are no prepositions in the Chinby law, as there are no prepositions in the Chinese language. However, the phrase is part of a lese language. However, the phrase is part of a longer tifoar official policy statement of yifa zhionger tifoar official policy statement of yifa zhiguo, jianshe shehuizhuyi fazhiguo [as noted abguo, jianshe shehuizhuyi fazhiguo [as noted above].ove].

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The commitment to governing the country accordiThe commitment to governing the country according to law reflects the central tenet of rule of law: lang to law reflects the central tenet of rule of law: law is supreme and binds government officials and cw is supreme and binds government officials and citizens alike. Indeed, the principle of supremacy of itizens alike. Indeed, the principle of supremacy of law and the notion that no party or person is above law and the notion that no party or person is above the law is explicitly stated in both the state and Partthe law is explicitly stated in both the state and Party constitutions. Significantly, an alternative phrase y constitutions. Significantly, an alternative phrase yifa zhiguo using a different first character, which yifa zhiguo using a different first character, which means "use law to govern the country," was explicitmeans "use law to govern the country," was explicitly rejected because it could be interpreted to suppoly rejected because it could be interpreted to support an instrumental rule by law rather than rule of lart an instrumental rule by law rather than rule of law in which all are bound by law. Because the differw in which all are bound by law. Because the difference between the two phrases had been the subject ence between the two phrases had been the subject of much academic debate, the significance of the cof much academic debate, the significance of the choice was well-known to all.hoice was well-known to all.

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There has also been considerable discussioThere has also been considerable discussion of the difference between an instrumentn of the difference between an instrumental rule by laal rule by laww and the rule of law among ac and the rule of law among academics. PRC legal scholars who have giveademics. PRC legal scholars who have given lectures on rule of law to Jiang Zemin ann lectures on rule of law to Jiang Zemin and other senior leaders confirm that they und other senior leaders confirm that they understand the distinction between rule by laderstand the distinction between rule by law, in which government actors are not bouw, in which government actors are not bound by law, and rule of law in which law is snd by law, and rule of law in which law is supreme. ...upreme. ...

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Nevertheless, many reporters and some scholaNevertheless, many reporters and some scholars insist on translating fazhi as rule rs insist on translating fazhi as rule by by law and law and sometimes even go so far as to translate yifa zhsometimes even go so far as to translate yifa zhiguo as "relying on law to rule the country" origuo as "relying on law to rule the country" or "using law to govern" and other such more inst "using law to govern" and other such more instrumental renderings. Such translations are not rumental renderings. Such translations are not translations in the sense of direct rendering of translations in the sense of direct rendering of the ordinary meaning of the words in Chinese. the ordinary meaning of the words in Chinese. Rather, they are interpretations that reflect the Rather, they are interpretations that reflect the translators' biases or assumptions about the natranslators' biases or assumptions about the nature of legal reform in China.ture of legal reform in China.

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By Peerenboom's account, China has pledged iBy Peerenboom's account, China has pledged itself to the rule of law -understood as meaning tself to the rule of law -understood as meaning that the government is bound by the rules of lthat the government is bound by the rules of law - as part of its formal constitutional frameaw - as part of its formal constitutional framework. work.

While the Constitution of the PRC is not directWhile the Constitution of the PRC is not directly applicable in the same way that the U.S. Coly applicable in the same way that the U.S. Constitution is, the fact remains that China has onstitution is, the fact remains that China has officially adopted the rule of law as formal legal fficially adopted the rule of law as formal legal policy. – and indeed congratulated itself recenpolicy. – and indeed congratulated itself recently for implementing that policy so admirably.tly for implementing that policy so admirably.

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Perhaps some further light may be shed on the Perhaps some further light may be shed on the issue of how issue of how renzhi renzhi should be translated by exashould be translated by examining two points - one linguistic and the othemining two points - one linguistic and the other historical. The first point revolves around the r historical. The first point revolves around the fact that the fact that the pinyin pinyin romanization romanization zhi zhi actually aactually applies to two different Chinese characters (havipplies to two different Chinese characters (having some relationship to law, that is). The historng some relationship to law, that is). The historical point revolves around Deng Xiaoping's role ical point revolves around Deng Xiaoping's role in developing the policies that the CPC would fin developing the policies that the CPC would follow in respect of law and government. Both oollow in respect of law and government. Both of these points appear in f these points appear in Box #3.Box #3.

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Box #3Box #3 Using the Using the pinyin pinyin Romanization fazhi in discussions Romanization fazhi in discussions

of the "rule of law" in China is subject to uncertainty of the "rule of law" in China is subject to uncertainty at several levels. In addition to the fact that there arat several levels. In addition to the fact that there are no prepositions in the Chinese language is the fact e no prepositions in the Chinese language is the fact that fazhi - that fazhi - or, to be more precise by including the tor, to be more precise by including the tonal marks, fazhi – can be used for two different Chonal marks, fazhi – can be used for two different Chinese characters. The first is inese characters. The first is 法治 法治 and the second is and the second is 法制法制 . . The character The character 法 法 which appears in both binowhich appears in both binoms, is of course ms, is of course fa fa - law. The character - law. The character 治治 (zhi)(zhi) woul would typically be translated as "to rule" or "to govern" or d typically be translated as "to rule" or "to govern" or "to manage" or "to harness" ( as in the case of a rive"to manage" or "to harness" ( as in the case of a river). The character r). The character 制 制 (zhi) (zhi) would typically be translawould typically be translated slightly differently, as "system" - or "to control" oted slightly differently, as "system" - or "to control" or "to regulate."r "to regulate."

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Before 1997, the question of which of the two Before 1997, the question of which of the two related but different conceptualizations of the related but different conceptualizations of the role of law in China should be used - that is, wrole of law in China should be used - that is, whether hether 法治 法治 or or 法制 法制 should be used - was debshould be used - was debated among scholars and among top level govated among scholars and among top level government officials. In simplified form, the debernment officials. In simplified form, the debate asked whether China should build a "rule ate asked whether China should build a "rule of law" country or should instead build only a of law" country or should instead build only a country with "laws and systems." The debate country with "laws and systems." The debate was settled in September 1997, when the CPC was settled in September 1997, when the CPC proclaimed (at its annual meeting) that China proclaimed (at its annual meeting) that China should be a rule of law country - and it was thishould be a rule of law country - and it was this concept that was adopted into the Constitutis concept that was adopted into the Constitution by the NPC in 1999.on by the NPC in 1999.

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Before 1997, however, the other conceptualization –Before 1997, however, the other conceptualization – 法法制制 - - commanded much attention. It became well estabcommanded much attention. It became well established that China was aiming to build a country with "llished that China was aiming to build a country with "laws and system"aws and system" (法制)(法制) Indeed, Deng Xiaoping is the Indeed, Deng Xiaoping is the author (in this context) of the concept of author (in this context) of the concept of 法制法制 . . On DeOn December 13, 1978, Deng Xiaoping proclaimed at an impcember 13, 1978, Deng Xiaoping proclaimed at an important government meeting that in order to build up tortant government meeting that in order to build up the socialist legal system, China must follow four key phe socialist legal system, China must follow four key principles. The first was rinciples. The first was 有法可依 有法可依 which may be underwhich may be understood as follows: stood as follows: -- 有有 (you, (you, there should exist);there should exist); 法 法 (fa, (fa, llaw); aw); 可可 (ke, may); (ke, may); 依依 (yi, refer to) - or, in brief, there s(yi, refer to) - or, in brief, there should be law [for the law officers] to refer to. The secohould be law [for the law officers] to refer to. The second wasnd was 有法必依有法必依 , which may be understood as follows: , which may be understood as follows: 有有 (you, (you, there should exist); there should exist); 法法 (fa, (fa, law); law); 必必 (bi, (bi, must); must);

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依依 (yi, refer to) - or, in brief, if there is law, one (yi, refer to) - or, in brief, if there is law, one must refer to the law or comply with such law. must refer to the law or comply with such law. The third was The third was 执法必严执法必严 , , which may be understwhich may be understood as follows:ood as follows: 执执 (zhi,(zhi, enforce); ; enforce); ; 法法 (fa, law); (fa, law); 必必(bi, (bi, must);must); 严严 (yan, (yan, strict) - or, in brief, law enfostrict) - or, in brief, law enforcement officers should not be lenient; instead, rcement officers should not be lenient; instead, enforcement of law must be strict. The fourth wenforcement of law must be strict. The fourth was as 违法必究违法必究 which may be understood as followwhich may be understood as follows: s: 违违 (wei,(wei, violating); violating); 法法 (fa, (fa, law); law); 必必 (bi, (bi, must); must); 究究 (jiu, (jiu, investigate, or prosecute) - or, in brief, if investigate, or prosecute) - or, in brief, if there is a violation of law, it must be prosecuted.there is a violation of law, it must be prosecuted.

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For Deng Xiaoping, then, it was theFor Deng Xiaoping, then, it was the 法法制 制 form form of fazhi of fazhi that China should focthat China should focus on, not the us on, not the 法治 法治 form form of fazhi. of fazhi. (Den(Deng's explanation of the four key principlg's explanation of the four key principles noted above appeared in Deng Xiaoes noted above appeared in Deng Xiaoping's ping's Selected Articles) Selected Articles) Not until 1997 Not until 1997 was the was the 法治 法治 form form of fazhi of fazhi accepted ofaccepted officially by China. ficially by China.

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C The rule of law C The rule of law in contemporary in contemporary

ChinaChina

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According to what I said above and using as our According to what I said above and using as our standard the “ rough and ready” definition of the standard the “ rough and ready” definition of the rule of law that I offered earlier, it seems that law rule of law that I offered earlier, it seems that law in today’s China probably does posses the minimal in today’s China probably does posses the minimal attributes required to say that it does adhere to attributes required to say that it does adhere to the rule of law, or you can say that China’s legal the rule of law, or you can say that China’s legal system does have the rule of law under the ‘thin’ system does have the rule of law under the ‘thin’ standards. The impressive legal reform efforts in standards. The impressive legal reform efforts in China over the past 32 years have created a China over the past 32 years have created a system that is, for the most part, competent and system that is, for the most part, competent and effective.effective.

As evidence to support this assertion, As evidence to support this assertion, I I would would highlight the chronological list of events and highlight the chronological list of events and initiatives appearing in Box #4initiatives appearing in Box #4

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Box # 4 Box # 4 Selected Chinese Selected Chinese Legal and Political Legal and Political

Developments from 1978Developments from 1978 1978 1978 In February, the In February, the NPC NPC is convened and eis convened and e

nacts the nacts the 1978 1978 Constitution, which marks a paConstitution, which marks a partial departure from the most radical ideology rtial departure from the most radical ideology and policies of the Cultural Revolution but doand policies of the Cultural Revolution but does not directly repudiate it (and indeed maintaes not directly repudiate it (and indeed maintains the CPC's control over the political and legins the CPC's control over the political and legal system). In December, Deng Xiaoping insistal system). In December, Deng Xiaoping insists that "the legal system must be strengthened" s that "the legal system must be strengthened" in such a way as to ensure that "laws would noin such a way as to ensure that "laws would not change merely because of a change of leadert change merely because of a change of leadership or a change in the leaders' views and atteship or a change in the leaders' views and attention." The procuratorates are reestablished. ntion." The procuratorates are reestablished. The The CPC byCPC by now has now has 35 35 million members.million members.

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1979 1979 The Ministry of Justice is re-established; orThe Ministry of Justice is re-established; organic laws on courts and on procuratorates are aganic laws on courts and on procuratorates are adopted; the dopted; the Equity Joint Venture Law Equity Joint Venture Law is enacted.is enacted.

1980 1980 The The Provisional Regulations on Lawyers Provisional Regulations on Lawyers arare issued in August e issued in August by by the the NPC NPC Standing CommittStanding Committee.ee.

1981 1981 The The Contract Law Contract Law is adopted, with a strong is adopted, with a strong flavor of Soviet influence. In June, the CPC adoptflavor of Soviet influence. In June, the CPC adopts the s the Resolution on Questions of Party History siResolution on Questions of Party History sincence the Establishment of the PRC, the Establishment of the PRC, which urged twhich urged that law and the legal system must be emphasizehat law and the legal system must be emphasized to prevent the recurrence of errors committed d to prevent the recurrence of errors committed during the Cultural Revolution.during the Cultural Revolution.

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1982 1982 The 1982 Constitution is adopted in The 1982 Constitution is adopted in December, representing a return to the December, representing a return to the "socialist legality" model of an earlier "socialist legality" model of an earlier Constitution. The Constitution. The TrademarkTrademark Law Law is also is also adopted, reflecting the influence of Western adopted, reflecting the influence of Western Law. The Chinese Law Society is established.Law. The Chinese Law Society is established.

1983 The Ministry of Education approves more 1983 The Ministry of Education approves more than 30 universities to set up law departments, than 30 universities to set up law departments, and a national conference on legal education and a national conference on legal education (held in Beijing) calls for the enrollment of up to (held in Beijing) calls for the enrollment of up to 10,000 law students by the end of 1987. Some 10,000 law students by the end of 1987. Some decisions of the Supreme People's Court begin decisions of the Supreme People's Court begin to be distributed within the court system.to be distributed within the court system.

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1984 1984 The The Patent Law Patent Law is adopted, again is adopted, again reflecting the influence of Western law.reflecting the influence of Western law.

1985 1985 The The Gazette of the Supreme Gazette of the Supreme People's Court People's Court begins publication, thus begins publication, thus expanding the range of court decisions expanding the range of court decisions publicly available and providing a publicly available and providing a mechanism by which the Supreme mechanism by which the Supreme People's Court provides guidance to People's Court provides guidance to lower courts.lower courts.

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1986 1986 By the end of this year, numerous By the end of this year, numerous courts have been established, including 29 courts have been established, including 29 high courts, 337 intermediate courts, 2,907 high courts, 337 intermediate courts, 2,907 basic courts, and over 14,000 people's basic courts, and over 14,000 people's tribunals, with a total of nearly 99,000 judges. tribunals, with a total of nearly 99,000 judges. The The General Principles of Civil Law General Principles of Civil Law is is adopted, based directly on the German model; adopted, based directly on the German model; and a relatively comprehensive legal regime and a relatively comprehensive legal regime for foreign investment has been established.for foreign investment has been established.

1988 1988 The 1982 Constitution is amended to The 1982 Constitution is amended to legitimize the private economy and to legalize legitimize the private economy and to legalize the leasing of land and the transfer of land-the leasing of land and the transfer of land-use rights; and the use rights; and the Cooperative Joint Venture Cooperative Joint Venture Law Law is adopted.is adopted.

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1989 1989 By the end of this year, about 150 By the end of this year, about 150 national statutes, more than 500 administrative national statutes, more than 500 administrative regulations and rules, and more than 1,000 regulations and rules, and more than 1,000 local rules have been issued, covering all major local rules have been issued, covering all major aspects of social and economic life; and aspects of social and economic life; and legislative focus on administrative law results in legislative focus on administrative law results in the the Law onLaw on Administrative Litigation, Administrative Litigation, laying laying down detailed standards defining which down detailed standards defining which administrative activities are legal or illegal. In administrative activities are legal or illegal. In May, the protests and crackdown at Tiananmen May, the protests and crackdown at Tiananmen Square bring international criticism and reveal Square bring international criticism and reveal CPC concerns over risks associated with CPC concerns over risks associated with political reform.political reform.

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1991 1991 The State Council issues its white paper, The State Council issues its white paper, HumaHuman Rights in China, n Rights in China, suggesting an about-face in the offisuggesting an about-face in the official attitude toward the discourse ofcial attitude toward the discourse of human rights (by human rights (by claiming that "[i]t remains a long-term historical task claiming that "[i]t remains a long-term historical task forfor the Chinese people and government to continue tthe Chinese people and government to continue to promote humano promote human rights").rights").

1992 e 1992 e In January, CPC leader Deng Xiaoping takes hiIn January, CPC leader Deng Xiaoping takes his "Southern Tour" and is reported as saying that "refos "Southern Tour" and is reported as saying that "reforms and greater openness are China's only way out" arms and greater openness are China's only way out" and that "if capitalism has something good, then socialnd that "if capitalism has something good, then socialism should bring it over and use it." In addition, the ism should bring it over and use it." In addition, the Maritime Code Maritime Code is adopted and is heralded as an examis adopted and is heralded as an example for harmonizing Chinese law with international pple for harmonizing Chinese law with international practice.ractice.

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1993 * The 1982 Constitution is amended 1993 * The 1982 Constitution is amended again, this time replacing the reference to a again, this time replacing the reference to a "planned economy" with that of a "socialist "planned economy" with that of a "socialist market economy" and also replacing "state-market economy" and also replacing "state-run economy" with "state-owned economy" run economy" with "state-owned economy" (implying that the public sector of the (implying that the public sector of the economy will no longer be operated by economy will no longer be operated by bureaucratic administration but will be bureaucratic administration but will be regulated by market mechanisms); and the regulated by market mechanisms); and the Company Law Company Law is enacted.is enacted.

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1994 * The 1994 * The Foreign Trade Law, Foreign Trade Law, the the Arbitration Arbitration Law, Law, and the and the Audit Law Audit Law are adopted, along with are adopted, along with the the State Compensation Law State Compensation Law (supplementing the (supplementing the LawLaw on Administrative Litigation on Administrative Litigation adopted in adopted in 1989); and the legal aid system begins 1989); and the legal aid system begins operations.operations.

1995 1995 * * The The Securities Law, Securities Law, the the Law on Law on Accounting, Accounting, and the and the Insurance Law Insurance Law are adopted. are adopted. There are by this time (according to one There are by this time (according to one account), 89,000 lawyers and 7,200 law firms, account), 89,000 lawyers and 7,200 law firms, and legal education has flourished, with the and legal education has flourished, with the number of law schools having risen from two by number of law schools having risen from two by the end of 1977 to more than 80.the end of 1977 to more than 80.

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1996 1996 * * Revisions to the Revisions to the Criminal Law Criminal Law and and the the Criminal Procedural Law Criminal Procedural Law are are undertaken, with a stated aim of absorbing undertaken, with a stated aim of absorbing commonly accepted international standards commonly accepted international standards on justice and the rule of law; and the NPC on justice and the rule of law; and the NPC Standing Committee enacts the Standing Committee enacts the Law on Law on Lawyers, Lawyers, which seeks to strengthen and which seeks to strengthen and modernize the legal profession and to modernize the legal profession and to recasting lawyers as professionals providing recasting lawyers as professionals providing services to clients (instead of as state services to clients (instead of as state workers).workers).

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1997 * The 1997 * The Law on Administrative Punishment Law on Administrative Punishment is adopted, complementing the earlier laws on is adopted, complementing the earlier laws on administrative law and procedure; and an "Intadministrative law and procedure; and an "Intensified Educational Rectification Movement" ensified Educational Rectification Movement" within the judiciary is undertaken, resulting in within the judiciary is undertaken, resulting in the reshuffling, disciplining, and removal of tthe reshuffling, disciplining, and removal of thousands of judges. Deng Xiaoping dies, and thousands of judges. Deng Xiaoping dies, and the CPC adopts "Deng Xiaoping Theory" as part he CPC adopts "Deng Xiaoping Theory" as part of the CPC's official ideology (along with Mariof the CPC's official ideology (along with Marixism- Leninism and "Mao Zedong Thought"). Ixism- Leninism and "Mao Zedong Thought"). In addition, China signs the International Coven addition, China signs the International Covenant on Economic, Social and Cultural Rights.nant on Economic, Social and Cultural Rights.

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1998 1998 * Several changes are initiated in the judicial * Several changes are initiated in the judicial system, including (i) improving a "lay assessor" system, including (i) improving a "lay assessor" system in which laypersons assist judges in making system in which laypersons assist judges in making court judgments; (ii) strengthening township court judgments; (ii) strengthening township courts in order to expand the judiciary's role in courts in order to expand the judiciary's role in rural areas, (iii) appointing certain senior judges as rural areas, (iii) appointing certain senior judges as superintendents responsible for offering advice in superintendents responsible for offering advice in handing major or difficult cases, (iv) opening most handing major or difficult cases, (iv) opening most trials and hearings to the public, (v) introducing trials and hearings to the public, (v) introducing the practice of advising victims, witnesses, and the practice of advising victims, witnesses, and suspects in criminal cases of their legal rights, and suspects in criminal cases of their legal rights, and (vi) changing the system of recruitment of judges. (vi) changing the system of recruitment of judges. In addition, China signs the International Covenant In addition, China signs the International Covenant on Civil and Political Rights.on Civil and Political Rights.

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1999 1999 * The 1981 version of the * The 1981 version of the Contract Law Contract Law is replais replaced with a revised ced with a revised Contract Law Contract Law that reflects a "plurthat reflects a "pluralist approach" to legislation, drawing onalist approach" to legislation, drawing on experiencexperience from foreign and international sources; and the 19e from foreign and international sources; and the 198282 Constitution is amended again, this time (i) to refConstitution is amended again, this time (i) to reflect the NPC's strategylect the NPC's strategy (urged by CPC Secretary-Gen(urged by CPC Secretary-General Jiang Zemin) of eral Jiang Zemin) of yifa zhiguo, jianshe shehuizhuyyifa zhiguo, jianshe shehuizhuyifazhiguo, ifazhiguo, which has been translated by one expert which has been translated by one expert (as noted(as noted above in above in Box Box #3 and accompanying text) a#3 and accompanying text) as "[to] govern the countrys "[to] govern the country according to law, [and to]according to law, [and to]establish a socialist rule of law country," and (ii)establish a socialist rule of law country," and (ii) to gto give further prominence to the role of the private secive further prominence to the role of the private sector in China'stor in China's economy.economy.

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2001 2001 * * The Supreme People's Court, in iThe Supreme People's Court, in its "Reply to the Shandong High Court" rts "Reply to the Shandong High Court" regarding the case of egarding the case of Qi Yuling v. Chen Qi Yuling v. Chen Xiaoqi and others, Xiaoqi and others, suggested that courtsuggested that courts may refer to and rely on provisions of s may refer to and rely on provisions of the Constitution in deciding cases - therthe Constitution in deciding cases - thereby departing from the position establieby departing from the position established on this issue in 1955. China is admshed on this issue in 1955. China is admitted to the World Trade Organization.itted to the World Trade Organization.

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20022002 Upon the retirement of Jiang Zemin from the posiUpon the retirement of Jiang Zemin from the position of CPC Secretary- General (succeeded by Hu Jintation of CPC Secretary- General (succeeded by Hu Jintao), Jiang's "theory of the Three Represents" is formalizeo), Jiang's "theory of the Three Represents" is formalized in the CPC constitution, setting the stage for the incord in the CPC constitution, setting the stage for the incorporation of that theory into the PRC Constitution in 200poration of that theory into the PRC Constitution in 2004. In addition, the CPC constitution is amended (i) to de4. In addition, the CPC constitution is amended (i) to delete references to the ultimate abolition of capitalism, alete references to the ultimate abolition of capitalism, and (ii) to open CPC membership to a broad range of pend (ii) to open CPC membership to a broad range of people, including private entrepreneurs; and by 2002 the ople, including private entrepreneurs; and by 2002 the CPC has 66 million members.CPC has 66 million members.

2003 2003 As of the end of the year, over 560,000 undergradAs of the end of the year, over 560,000 undergraduate and nearly 11,000 graduate students are enrolled iuate and nearly 11,000 graduate students are enrolled in several hundred law departments and schools within n several hundred law departments and schools within Chinese universities.Chinese universities.

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2004 2004 In March, the 1982 Constitution is amended agIn March, the 1982 Constitution is amended again - this time mainly (i) to provide expressly that the ain - this time mainly (i) to provide expressly that the state respects and protects human rights, (ii) to provistate respects and protects human rights, (ii) to provide expressly for the protection of citizens' private prde expressly for the protection of citizens' private property rights, and (iii) to adopt Jiang Zemin's "theory operty rights, and (iii) to adopt Jiang Zemin's "theory of the three represents." The NPC and its Standing Cof the three represents." The NPC and its Standing Committee have adopted (as of June of this year) a totommittee have adopted (as of June of this year) a total of 323 laws, 138 resolutions, and 10 sets of legislatial of 323 laws, 138 resolutions, and 10 sets of legislative interpretations since 1979, and the State Council hve interpretations since 1979, and the State Council had issued 970 administrative regulations; local legislad issued 970 administrative regulations; local legislatures has also issued thousands of rules. There are atures has also issued thousands of rules. There are over 3,500 courts and more than 190,000 judges, whoover 3,500 courts and more than 190,000 judges, whose qualifications are regulated by national laws and ese qualifications are regulated by national laws and examinations; and there are roughly 120,000 practicinxaminations; and there are roughly 120,000 practicing lawyers, of whom nearly 5,000 work in the 3,023 leg lawyers, of whom nearly 5,000 work in the 3,023 legal aid organizations.gal aid organizations.

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2005 The 2005 The Public Servants Law Public Servants Law is is adopted, setting a high standard for adopted, setting a high standard for conduct by government officials.conduct by government officials.

2006 2006 The NPC adopts the The NPC adopts the Supervision Supervision Law, Law, which authorizes the NPC to which authorizes the NPC to exercise supervisory control over the exercise supervisory control over the operations of courts - not (as earlier operations of courts - not (as earlier proposed) over individual cases handled proposed) over individual cases handled by the courts but rather on a collective by the courts but rather on a collective basis and relating to "specific issues."basis and relating to "specific issues."

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2007 2007 The The Property Law Property Law is enacted, covering all is enacted, covering all three types of property in the PRC three types of property in the PRC - - state, collestate, collective, and private - and giving legislative detail ctive, and private - and giving legislative detail to the constitutional provisions added in 2004 to the constitutional provisions added in 2004 guaranteeing private property rights.guaranteeing private property rights.

20082008 The NPC Standing Committee announces The NPC Standing Committee announces that draft laws submitted to it for review will bthat draft laws submitted to it for review will be published on the NPC's website and in some e published on the NPC's website and in some cases also published in major newspapers, to pcases also published in major newspapers, to permit comments to be provided by the public.ermit comments to be provided by the public.

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Would you like to Would you like to talk about some talk about some important events important events about law in your about law in your

country?country?

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I have cited these law-making I have cited these law-making developments as one piece of evidence developments as one piece of evidence that China's contemporary legal system that China's contemporary legal system does meet the requirements of the rule does meet the requirements of the rule of law. But of course a legal system of law. But of course a legal system comprises much more than comprises much more than promulgated laws and regulations. It promulgated laws and regulations. It also includes institutions, personnel, also includes institutions, personnel, and operations - most notably and operations - most notably enforcement operations. enforcement operations.

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As reflected in As reflected in Box Box #4, China now has develope#4, China now has developed a sophisticated array of legal institutions d a sophisticated array of legal institutions - - not not just law-making institutions (congresses, standijust law-making institutions (congresses, standing committees, and councils at national level ang committees, and councils at national level as well as at the levels of provinces, special muns well as at the levels of provinces, special municipalities, autonomous regions, etc. icipalities, autonomous regions, etc. ), ), but also but also a court system, a procuracy system, and an inca court system, a procuracy system, and an increasingly active community of practicing lawyereasingly active community of practicing lawyers. For better or for worse, these institutions hars. For better or for worse, these institutions have facilitated an explosion in the volume of litigve facilitated an explosion in the volume of litigation in China in recent years. ation in China in recent years.

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One authority, in describing the “amazing increase in One authority, in describing the “amazing increase in cases”, offers these statistics:cases”, offers these statistics:

In 1978, the total number of cases accepted by the In 1978, the total number of cases accepted by the courts was 447,755. The number skyrocketed to more courts was 447,755. The number skyrocketed to more than 5 million after 1996, reached a record high of than 5 million after 1996, reached a record high of 5,692,434 in 1999, and then slowly decreased to 5,692,434 in 1999, and then slowly decreased to 5,161,170 by 2005. In 27 years, the total number of 5,161,170 by 2005. In 27 years, the total number of cases increased more than tenfold. When broken cases increased more than tenfold. When broken down, data showed remarkable increases in all types down, data showed remarkable increases in all types of cases. From 1978 to 2005, the numbers increased of cases. From 1978 to 2005, the numbers increased more than 13-fold for general civil cases and almost more than 13-fold for general civil cases and almost fourfold for criminal cases; economic dispute cases fourfold for criminal cases; economic dispute cases increased more than 295-fold from 1980 to 2001; and increased more than 295-fold from 1980 to 2001; and administrative cases increased more than 181 –fold administrative cases increased more than 181 –fold from 1983 to 2005.from 1983 to 2005.

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Legal training also has expanded dramatically in Legal training also has expanded dramatically in the PRC in the past 32 years or so from its moributhe PRC in the past 32 years or so from its moribund state at the close of the Cultural Revolution:nd state at the close of the Cultural Revolution:

Only after 1978 did legal education finally gain a Only after 1978 did legal education finally gain a rebirth. In the next 10 years from 1978 to 1987, threbirth. In the next 10 years from 1978 to 1987, the number of law colleges and departments increae number of law colleges and departments increased from 6 to 86; the number of teachers increasesed from 6 to 86; the number of teachers increased from 178 to 5,216; and the number of law gradud from 178 to 5,216; and the number of law graduates increased from 99 to 12,639. These numbers ates increased from 99 to 12,639. These numbers continued to grow in the 1990s and in the new micontinued to grow in the 1990s and in the new millennium.By 2006, more than 600 law programs wllennium.By 2006, more than 600 law programs were open nationwide with more than 200,000 studere open nationwide with more than 200,000 students.ents.

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There is obviously a linkage between There is obviously a linkage between these factors of (i) a rejuvenated court these factors of (i) a rejuvenated court system, (ii) a quickening pace of system, (ii) a quickening pace of litigation, and (iii) an increased supply litigation, and (iii) an increased supply of lawyers. Taken together, they could in of lawyers. Taken together, they could in time surely be expected to bring about time surely be expected to bring about the consistently effective the consistently effective implementation and enforcement of implementation and enforcement of laws, which is something on which any laws, which is something on which any legal system ultimately depends.legal system ultimately depends.

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D The D The Construction of a Construction of a Legal System for Legal System for China’s Market China’s Market

EconomyEconomy

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On November 11On November 11 ,, 2002, China, the largest de2002, China, the largest developing country in the world with 1.3 billion veloping country in the world with 1.3 billion people, entered the World Trade Organizatiopeople, entered the World Trade Organization ("WTO"). China's entry into the WTO is an en ("WTO"). China's entry into the WTO is an extremely significant milestone in Chinese histxtremely significant milestone in Chinese history, particularly with regard to the adoption oory, particularly with regard to the adoption of reform and liberation policies. Entering the f reform and liberation policies. Entering the WTO symbolizes the beginning of a new era fWTO symbolizes the beginning of a new era for China; integrating the Chinese economy inor China; integrating the Chinese economy into the globalization process and substantially to the globalization process and substantially accelerating internal reforms. accelerating internal reforms.

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In order to seize the opportunities created bIn order to seize the opportunities created by entry into the WTO; meet a variety of chally entry into the WTO; meet a variety of challenges; integrate the Chinese economy into tenges; integrate the Chinese economy into the international community through reform,he international community through reform, liberalization, adjustment, and innovation; liberalization, adjustment, and innovation; and achieve China's targets for development and achieve China's targets for development and modernization, it is critical to harmonizand modernization, it is critical to harmonize the Chinese legal system with socialist mare the Chinese legal system with socialist market economyket economy ,, utilizing the agreements and utilizing the agreements and rules of the WTO. In this way, a fairer legal erules of the WTO. In this way, a fairer legal environment will emerge for actors in both thnvironment will emerge for actors in both the domestic and foreign markets.e domestic and foreign markets.

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1. China’s Present 1. China’s Present Legal System and Legal System and

the Emerging the Emerging Market EconomyMarket Economy

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Fundamental legal reform in China began Fundamental legal reform in China began in the late 1970s for the purpose of in the late 1970s for the purpose of establishing a socialist market economy. establishing a socialist market economy. More specifically, the planned economy More specifically, the planned economy was abandoned to a large extent, and the was abandoned to a large extent, and the socialist market system emerged. socialist market system emerged. Reformers have made significant Reformers have made significant progress towards the constructing a legal progress towards the constructing a legal system to suit this new economic model system to suit this new economic model over the past thirty years. over the past thirty years.

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Laws Relating to Laws Relating to Business EntitiesBusiness Entities

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As with most legal systems for marke As with most legal systems for marke economies, a company law, a partnerseconomies, a company law, a partnership law, and a sole proprietorship law hip law, and a sole proprietorship law were enacted in China. These laws intrwere enacted in China. These laws introduced internationally accepted normoduced internationally accepted norms for structuring business entities, mas for structuring business entities, managing incorporation capital, and limitnaging incorporation capital, and limiting liability.ing liability.

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The Company Law of the People's Republic The Company Law of the People's Republic of China ("PRC Company Law") provides of China ("PRC Company Law") provides that a company is a for-profit business that a company is a for-profit business entity and that its shareholders undertake entity and that its shareholders undertake limited liability for the debts of the limited liability for the debts of the company. By enacting this Law, the old, company. By enacting this Law, the old, traditional legislative perception traditional legislative perception categorizing businesses by their ownership categorizing businesses by their ownership was discarded. Therefore, a new kind of was discarded. Therefore, a new kind of modern corporate legal regime was modern corporate legal regime was established. established.

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The PRC Company law The PRC Company law includes the following includes the following

notable provisions: notable provisions: (1) the freedom to establish a business (1) the freedom to establish a business

entity; entity; (2) emphasis on the role of capital in the (2) emphasis on the role of capital in the

establishment and operation of the establishment and operation of the entity, and the importance of a entity, and the importance of a company's creditworthiness in safe market company's creditworthiness in safe market transactions;transactions;

(3) the establishment of corporate (3) the establishment of corporate governance standards based on check-and-governance standards based on check-and-balance principles in which the general balance principles in which the general meeting of the shareholders is supreme;meeting of the shareholders is supreme;

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(4)The promotion of transparency and (4)The promotion of transparency and disclosure of company business practidisclosure of company business practices through the regulation of accountices through the regulation of accounting and financial systems; ng and financial systems;

(5) increased duties for the company's (5) increased duties for the company's management team; and management team; and

(6) the protection of the rights and inte(6) the protection of the rights and interests of the company's employees. rests of the company's employees.

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The enactment of the PRC Company Law, The enactment of the PRC Company Law, the PRC Partnership Law, and the Sole the PRC Partnership Law, and the Sole Proprietorship Law has resulted in the Proprietorship Law has resulted in the protection of the rights and interests of protection of the rights and interests of different types of business entities different types of business entities regarding the freedom of establishment, regarding the freedom of establishment, the equality of all businesses, and the the equality of all businesses, and the independence of management. Therefore, independence of management. Therefore, there is now free access to the market for there is now free access to the market for all types of business entities.all types of business entities.

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Construction of a “Construction of a “RRight in Remight in Rem” for the ” for the

Legal SystemLegal System

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A "right in rem" is the basis for people's daily liA "right in rem" is the basis for people's daily life and also an important precondition for ecofe and also an important precondition for economic development. A basic "right in rem" wanomic development. A basic "right in rem" was established with the enactment of the Geners established with the enactment of the General Principles of Civil Law, the Land Administraal Principles of Civil Law, the Land Administration Law, the Urban Real Estate Administratiotion Law, the Urban Real Estate Administration Law, and the Guarantee Law. n Law, and the Guarantee Law.

These laws show that the PRC no longer rejectThese laws show that the PRC no longer rejects the concept of a "right in rem." The laws coves the concept of a "right in rem." The laws covering the "right in rem" cover the following threring the "right in rem" cover the following three categories: e categories:

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(1) the "right in rem" on ownership (in(1) the "right in rem" on ownership (including State ownership, collective owcluding State ownership, collective ownership, and individual ownership); nership, and individual ownership);

(2) "right in rem" for usufruct or use (i(2) "right in rem" for usufruct or use (including land use, contracted managencluding land use, contracted management rights to land, and the right to miment rights to land, and the right to mine); and ne); and

(3) a "right in rem" for security interest(3) a "right in rem" for security interests (including the right to mortgage, the s (including the right to mortgage, the right of pledge and the right of lien). right of pledge and the right of lien).

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More importantly, all legal properties, either StMore importantly, all legal properties, either State-owned, collective, or private (both domestiate-owned, collective, or private (both domestic and foreign) are eligible for legal protection. Ic and foreign) are eligible for legal protection. Ignoring, administratively transferring, and bregnoring, administratively transferring, and breaching property rights are prohibited. aching property rights are prohibited.

A law on a "right in rem" would entitle Chinese A law on a "right in rem" would entitle Chinese businesses and citizens to property rights. The businesses and citizens to property rights. The great motivating power of the legal system with great motivating power of the legal system with regard to the "right in rem" is convincingly reflregard to the "right in rem" is convincingly reflected through the high productivity and increaected through the high productivity and increased resources now available. Such things were sed resources now available. Such things were unthinkable in the past.unthinkable in the past.

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Improvement of Improvement of Contract LawContract Law

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Contract Law governs transactions and Contract Law governs transactions and defines and regulates the rights and defines and regulates the rights and obligations of parties to an agreement. obligations of parties to an agreement. With regard to the development of the With regard to the development of the Chinese market economy, there has been Chinese market economy, there has been significant progress in this area. The significant progress in this area. The enactment of the Economic Contract Law, enactment of the Economic Contract Law, the Law on Foreign Economic Law, and, the Law on Foreign Economic Law, and, most recently, the Unified Contract Law most recently, the Unified Contract Law (a combination of the former two laws) is (a combination of the former two laws) is a key example of this phenomenon. a key example of this phenomenon.

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The PRC Unified Contract Law is quite The PRC Unified Contract Law is quite "fashionable" because the normal rules for a "fashionable" because the normal rules for a market economy are reflected in this Law. market economy are reflected in this Law. Furthermore, the Unified Contract Law Furthermore, the Unified Contract Law contains the sophisticated principles, rules, and contains the sophisticated principles, rules, and advancements in foreign contract legislation. advancements in foreign contract legislation. Moreover, the Law includes fundamental Moreover, the Law includes fundamental elements such as the independence of a elements such as the independence of a contractual party's intent; freedom of contract; contractual party's intent; freedom of contract; principles of equality, willingness, fairness, and principles of equality, willingness, fairness, and integrity; unified and detailed rules, and legal integrity; unified and detailed rules, and legal mechanisms for contractual claims. mechanisms for contractual claims.

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This new contract regime guarantees all This new contract regime guarantees all businesses complete freedom to do businesses complete freedom to do business within authorized areas in business within authorized areas in whatever form and by whatever means whatever form and by whatever means they choose. It also allows for they choose. It also allows for technological innovation and management, technological innovation and management, optimal efficiency, and overall socio-optimal efficiency, and overall socio-economic development. In contrast, under economic development. In contrast, under the old system, there was no freedom of the old system, there was no freedom of contract and business activities, and contract and business activities, and manufacturing and supply were under manufacturing and supply were under state control.state control.

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Legal Standards Legal Standards for Appropriate for Appropriate

State Intervention State Intervention in the Macro-in the Macro-

EconomyEconomy

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The market is neither an almighty god nor a The market is neither an almighty god nor a pure virgin. Where negative forces endanger pure virgin. Where negative forces endanger fair competition, the state should intervene in fair competition, the state should intervene in the market to protect the interests of the public the market to protect the interests of the public at large. at large.

State intervention into the macro-economy is State intervention into the macro-economy is evidenced by legislation like the People's Bank evidenced by legislation like the People's Bank Law, the Budget Law, the Audit Law, and the Law, the Budget Law, the Audit Law, and the Anti-Unfair Competition Law. All of these laws Anti-Unfair Competition Law. All of these laws regulate indirect governmental macro-economic regulate indirect governmental macro-economic adjustment activities and appropriate adjustment activities and appropriate interventions for safeguarding the integrity of interventions for safeguarding the integrity of the socialist market economy. the socialist market economy.

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Improvement of Improvement of the Legal Regime the Legal Regime on Social Securityon Social Security

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Social security is a requirement for the developmeSocial security is a requirement for the development of a market economynt of a market economy ,, and guaranteed social juand guaranteed social justice, stability, and safety. China established a sociastice, stability, and safety. China established a social security system consisting of labor and public heall security system consisting of labor and public health insurance as early as 1951.th insurance as early as 1951.

Nevertheless, this old security system, with features Nevertheless, this old security system, with features such as "employer first, and state second," is not cosuch as "employer first, and state second," is not consistent with the new socialist market economy. At nsistent with the new socialist market economy. At present, some pieces of legislation have been enactpresent, some pieces of legislation have been enacted, such as Regulations on Collection and Administed, such as Regulations on Collection and Administration of Social Security Funds, Regulations on Uneration of Social Security Funds, Regulations on Unemployment Insurance, and Regulations on Practicemployment Insurance, and Regulations on Practices of Basic Living Standard for Urban Residents. s of Basic Living Standard for Urban Residents.

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The five legal reforms mentioned above The five legal reforms mentioned above represent the basis for the legal system orepresent the basis for the legal system of the socialist market economy. Although f the socialist market economy. Although much still needs to be done, the basic primuch still needs to be done, the basic principles for a market economy are reflectnciples for a market economy are reflected in the above-described reforms. Thered in the above-described reforms. Therefore, we are confident that the existing efore, we are confident that the existing Chinese legal system is in conformity witChinese legal system is in conformity with the agreements and rules of the WTO. h the agreements and rules of the WTO.

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2. Prospects for 2. Prospects for Chinese Legislation Chinese Legislation

on Economic on Economic AffairsAffairs

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Enactment of a Civil LawEnactment of a Civil Law

Civil laws are among the most fundamental lawCivil laws are among the most fundamental laws of any state. The purposes of civil law are to rs of any state. The purposes of civil law are to regulate proprietary and personal relationships, egulate proprietary and personal relationships, to administer basic social issues, and to protect to administer basic social issues, and to protect the rights and interests of the public. China has the rights and interests of the public. China has constructed its modern civil law regime under tconstructed its modern civil law regime under the General Principles of Civil Law over the past he General Principles of Civil Law over the past thirty years at an unprecedented rate. For the tithirty years at an unprecedented rate. For the time being, the most urgent task is to enact a law me being, the most urgent task is to enact a law covering the "right in rem" that is based on exiscovering the "right in rem" that is based on existing proprietary laws. ting proprietary laws.

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The world is approaching an era of science and techThe world is approaching an era of science and technology, but a law covering a "right in rem" is still nenology, but a law covering a "right in rem" is still necessary for a country such as China where the econcessary for a country such as China where the economy is undergoing a transition from a planned to a omy is undergoing a transition from a planned to a hybrid planned and market economy. Only if there ihybrid planned and market economy. Only if there is sound protection for a "right in rem" in place can ts sound protection for a "right in rem" in place can there be a strong economic system that coexists with here be a strong economic system that coexists with diverse business entities dominated by publicly-owdiverse business entities dominated by publicly-owned enterprises. Only through the improvement of ned enterprises. Only through the improvement of a "right in rem" can public-ownership be maximizea "right in rem" can public-ownership be maximized while also preventing problems such as the nomid while also preventing problems such as the nominalization of owners, and weakening the incentive tnalization of owners, and weakening the incentive to accrue wealth by alienating laborers, business ento accrue wealth by alienating laborers, business entities, and materials.ities, and materials.

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A proprietary usufruct right and a A proprietary usufruct right and a proprietary security right should be further proprietary security right should be further exercised in order to establish that the exercised in order to establish that the company is a legal entity that owns its own company is a legal entity that owns its own property and that peasants have a property and that peasants have a contracted right to the management of the contracted right to the management of the land. Also, the structure of ownership must land. Also, the structure of ownership must be improved, the quality and be improved, the quality and competitiveness of the national economy competitiveness of the national economy must be reinforced, and the development must be reinforced, and the development collective and private economy must be collective and private economy must be encouraged. encouraged.

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It is in this way that property, which may It is in this way that property, which may be subject to either public or private be subject to either public or private ownership, will be lawfully protected and ownership, will be lawfully protected and inviolable. It is only when ownership rights inviolable. It is only when ownership rights are clear, property is protected, and the are clear, property is protected, and the proprietary relationships are stable that the proprietary relationships are stable that the correct incentives and motivations of correct incentives and motivations of billions of people can be created in order to billions of people can be created in order to care for the property. Only where people care for the property. Only where people have more wealth, enterprises, and assets have more wealth, enterprises, and assets does society become rich and the state does society become rich and the state strong. strong.

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Therefore, the laws on "right in rem" should be Therefore, the laws on "right in rem" should be enhanced to create this incentive mechanism. enhanced to create this incentive mechanism. This legal development is a critical element for This legal development is a critical element for China's revitalization in the twenty-first centurChina's revitalization in the twenty-first century. Once the law on right in rem is enacted, a civy. Once the law on right in rem is enacted, a civil code should also be enacted to: (1) define, detil code should also be enacted to: (1) define, detail, and regulate the civil rights, activities, and lail, and regulate the civil rights, activities, and liabilities of Chinese citizens and legal entities; iabilities of Chinese citizens and legal entities; and (2) consolidate the legal foundation for the and (2) consolidate the legal foundation for the Chinese market economy and international ecoChinese market economy and international economic and trade affairs.nomic and trade affairs.

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The Promotion of The Promotion of Intellectual Property Intellectual Property

LegislationLegislation Today, with science and technology Today, with science and technology

advancing rapidly, high-tech companies advancing rapidly, high-tech companies that deal with electronic information that deal with electronic information and biological technology are developing and biological technology are developing fast. Technological innovation has fast. Technological innovation has become an important source of become an important source of economic growth. The question then economic growth. The question then becomes: how should China face the becomes: how should China face the coming of this new era full of coming of this new era full of opportunities and challenges? opportunities and challenges?

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The only option seems to be to complete The only option seems to be to complete the unfinished industrialization, while also the unfinished industrialization, while also simultaneously boarding the high-tech simultaneously boarding the high-tech express train. Information technology express train. Information technology should be used to advance industrialization. should be used to advance industrialization. These considerations demonstrate that These considerations demonstrate that China must strengthen its protection of China must strengthen its protection of intellectual property rights under the law in intellectual property rights under the law in accordance with the WTO General accordance with the WTO General Agreement on Intellectual Property Rights.Agreement on Intellectual Property Rights.

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Intellectual property rights in science, Intellectual property rights in science, technology, advanced management technology, advanced management experiences, and commercial secrets are experiences, and commercial secrets are invaluable assets that have played a very invaluable assets that have played a very important role in human history. A new chapter important role in human history. A new chapter on intellectual property should be included in on intellectual property should be included in the civil code, while also updating the current the civil code, while also updating the current legal regime protecting intellectual property. legal regime protecting intellectual property. In October of 2001 the Chinese Patent Law and In October of 2001 the Chinese Patent Law and Trademark Law were revised to comply with Trademark Law were revised to comply with WTO rules in the General Agreement for WTO rules in the General Agreement for Intellectual Property Rights. Intellectual Property Rights.

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The application and scope of the legal protection The application and scope of the legal protection for intellectual property rights should be for intellectual property rights should be extended, and the strength of the protection extended, and the strength of the protection enhanced in order to ensure the rights and enhanced in order to ensure the rights and interests of the inventors of new technology. In interests of the inventors of new technology. In addition, the freedom of innovation should be addition, the freedom of innovation should be recognized and protected under the civil law to recognized and protected under the civil law to motivate new developments in technology. A law motivate new developments in technology. A law on electronic business transactions should be on electronic business transactions should be enacted in order to safeguard electronic enacted in order to safeguard electronic transactions and prevent breaches of contract transactions and prevent breaches of contract and tortuous behavior.and tortuous behavior.

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Improving Law for Foreign-Improving Law for Foreign-fund Enterprisesfund Enterprises

There are several ways in which the There are several ways in which the laws governing foreign-funded laws governing foreign-funded enterprises should be improved in enterprises should be improved in the future.the future.

(1) The provisions on the self-balance (1) The provisions on the self-balance of foreign exchange revenue and of foreign exchange revenue and expenditure laws on foreign-funded expenditure laws on foreign-funded enterprises and wholly foreign owned enterprises and wholly foreign owned enterprises should be deleted.enterprises should be deleted.

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(2) Provisions on the preferential (2) Provisions on the preferential treatment for domestic products in the treatment for domestic products in the laws on foreign-funded and wholly foreign laws on foreign-funded and wholly foreign owned enterprises should be deleted. owned enterprises should be deleted. Procurement falls within the exclusive Procurement falls within the exclusive scope of the enterprise's own management scope of the enterprise's own management powers. Forcing foreign-funded powers. Forcing foreign-funded enterprises to give preference to domestic enterprises to give preference to domestic products is not in accordance with WTO products is not in accordance with WTO rules. Therefore, these kinds of is not in rules. Therefore, these kinds of is not in provisions should be deleted and provisions should be deleted and abolished.abolished.

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(3) The obligations of foreign funded (3) The obligations of foreign funded enterprises with regard to exporting should enterprises with regard to exporting should be deleted. The obligation of exporting is be deleted. The obligation of exporting is prohibited by WTO rules.prohibited by WTO rules.

(4) The filing requirements with regard to (4) The filing requirements with regard to the business's plan for foreign-funded and the business's plan for foreign-funded and wholly foreign owned enterprises should be wholly foreign owned enterprises should be deleted. These types of provisions are deleted. These types of provisions are remnants of the old economic system and remnants of the old economic system and are inconsistent with both current practice are inconsistent with both current practice and WTO rules.and WTO rules.

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Additionally, the state should encourage Additionally, the state should encourage investment in areas such as agriculture, investment in areas such as agriculture, high-tech industry, basic industry, infrashigh-tech industry, basic industry, infrastructure, and environmental protection. tructure, and environmental protection. The state should also pursue liberalizing The state should also pursue liberalizing reforms in such service industries as banreforms in such service industries as banking, insurance, telecommunications, disking, insurance, telecommunications, distribution, transportation, legal advisory stribution, transportation, legal advisory services and accounting services to improervices and accounting services to improve the capacity for using foreign investmve the capacity for using foreign investment.ent.

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Improving of Foreign Trade Improving of Foreign Trade LawsLaws

The PRC Foreign Trade Law was enacted iThe PRC Foreign Trade Law was enacted in order to implement unified trade policien order to implement unified trade policies. However, this Law must be revised and s. However, this Law must be revised and amended on the basis of WTO rules and amended on the basis of WTO rules and China's international commitments. Am China's international commitments. Amendments should be made in the following endments should be made in the following areas: tariffs, quantity and quota restrictioareas: tariffs, quantity and quota restrictions on industrial product imports, the tariffns on industrial product imports, the tariffs and quotas for large-scale agricultural prs and quotas for large-scale agricultural products, and restrictions on business licensoducts, and restrictions on business licensing for imports. ing for imports.

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These changes would mean that These changes would mean that three years after China's entry into three years after China's entry into the WTO, all enterprises registered the WTO, all enterprises registered in China may conduct their own in China may conduct their own foreign trade. Meanwhile, an Anti-foreign trade. Meanwhile, an Anti-Dumping Law, Anti-Subsidiary Law, Dumping Law, Anti-Subsidiary Law, and Protective Measures Law should and Protective Measures Law should be enacted in accordance with WTO be enacted in accordance with WTO rules and agreements. rules and agreements.

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Improving of the Law on Improving of the Law on Commercial AffairsCommercial Affairs

Commercial laws are a special type of civil law. Commercial laws are a special type of civil law. The laws on companies, negotiable instruments, The laws on companies, negotiable instruments, insurance, and maritime affairs have been insurance, and maritime affairs have been enacted in China. Chinese commercial law must enacted in China. Chinese commercial law must be improved to adapt to the economic be improved to adapt to the economic developments and significant changes brought developments and significant changes brought about by China’s entry into the WTO. To about by China’s entry into the WTO. To strengthen the internal supervision of state-strengthen the internal supervision of state-owned enterprises and support high-tech owned enterprises and support high-tech companies listed on stock exchanges, Articles 67 companies listed on stock exchanges, Articles 67 and 229 of the PRC Company Law were and 229 of the PRC Company Law were amended in 1999. amended in 1999.

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Specifically, the provisions on the board of Specifically, the provisions on the board of supervisors were added. These supervisors were added. These amendments changed the requirements amendments changed the requirements for: (1) the percentage of technology in the for: (1) the percentage of technology in the total registered capital of the company; total registered capital of the company; and (2) the issuing of new shares for the and (2) the issuing of new shares for the first time. In due time, the PRC Company first time. In due time, the PRC Company Law should also be amended in the areas Law should also be amended in the areas of ownership, capitalization, freedom and of ownership, capitalization, freedom and independence of management, corporate independence of management, corporate governance, and executive managerial governance, and executive managerial duties. duties.

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The Insurance Law and the Securities Law The Insurance Law and the Securities Law should also be improved to bring them should also be improved to bring them more in line with market economic rules. more in line with market economic rules. There must also be an effective supervisory There must also be an effective supervisory mechanism. A law on reorganization and mechanism. A law on reorganization and bankruptcy should be enacted to adapt to bankruptcy should be enacted to adapt to increasingly intense market competition increasingly intense market competition and establish a positive market and establish a positive market mechanism. Moreover, the Trust Law mechanism. Moreover, the Trust Law should be enforced to regulate the should be enforced to regulate the disordering trust relationships existing in disordering trust relationships existing in the markets.the markets.