Written Comments on Rule of
Law Issues Related to the People's Republic of China's Accession to the World
Trade Organization[1]
By American Bar Association (ABA)
China Law Committee
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Pursuant to the Request for Comments and Notice of
Public Hearing Concerning China's Compliance with WTO Commitments[2], we are pleased to provide
written comments on the People's Republic of China's ("PRC" or
"China") efforts to comply with its rule of law commitments made in
acceding to the World Trade Organization ("WTO"). In reviewing China's compliance with its WTO
commitments, one should maintain realistic expectations, but, at the same time,
expect full compliance with China's commitments. Realistic, however, does not mean passive. One should not view China's WTO accession as
an end, but as a milestone in the ongoing process of legal reform in
China.
China made several rule of law commitments in
joining the WTO; China faces significant challenges in conforming to such
commitments. These specific commitments
can be divided into general rule of law categories: (1) uniform administration
of China's trade regime; (2) transparency; and (3)
judicial review.[3] Increased scrutiny of WTO members and by an
increasing number of foreign businesses will reinforce these explicit rule of
law commitments. WTO accession will be a
significant impetus in the further development of the rule of law in
China. Our examination of the issue
indicates that many elements of the current central government are serious
about further developing the rule of law, at least in the context of economic
liberalization and development. Many
elements of subnational governments do not share a commitment to developing the
rule of law. China's fulfillment of its
WTO commitments will require the sustained effort of the Chinese government,
other WTO members, including the United States, intergovernmental
organizations, and nongovernmental organizations.
Our written comments will review China's rule of law commitments made in acceding to the WTO, and China's efforts to date to comply thereto. While we understand that the Office of the United States Trade Representative is mandated to make these annual reviews, we are not sure that adequate time has elapsed since China's WTO accession in order to identify serious or systemic compliance issues. These comments will only cover the time period from December 11, 2001 to September 9, 2002. Section I of these comments will examine China's efforts to comply with its WTO rule of law commitments, and is divided into three thematic sections: (1) an examination of a lawyer's role in Chinese society; (2) local protectionism; (3) regulatory and administrative transparency; and (4) a review of China' judiciary. Section II will conclude with some policy recommendations to assist China in complying with its rule of law commitments.
Attached to this document is Appendix A: Background
Materials. Section I of Appendix A will
examine the rule of law in a general context.
Section II of Appendix A will analyze rule of law development in the
Chinese context, divided into three chronological subsections: (1) before
1949's creation of the PRC; (2) between 1949 and the start of the economic and
legal reform process in 1978; and (3) legal reform and development since
1978. Section III of Appendix A reviews
the rule of law commitments contained in the General Agreement on Tariffs and
Trade 1947 ("GATT") and in China's WTO Accession Protocol.
We hope that this process will foster greater
understanding between the United States and China and help further the
development of the rule of law in China.
China's WTO commitments, including those in the rule
of law realm, present significant challenges to the Chinese government. The role of lawyers and of the legal system
itself in Chinese society remains somewhat of an open question. China continues to struggle with economic
inefficiencies and investment disincentives created by local protectionism,
predatory pricing, and preservation of industry-wide monopolies. Existing laws can be rendered ineffective
due to poor national coordination and inconsistent local and provincial
enforcement. Local protectionism by
provincial or local authorities often blocks efficient distribution of goods
and services inside of China. While
recent amendments to various laws and regulations that drop certain
administrative requirements, many remain concerned that industry is concerned
that the government may impose unofficial requirements in exchange for
extralegal decisions by government officials. China has made significant rule
of law commitments to join the WTO.
This section of our comments will review China's
efforts to date in complying with the rule of law commitments made in acceding
to the WTO. As stated above, not enough
time has passed to identify systemic problems in the compliance area but our
comments will review recent legal developments and trends. This section is divided into three sections,
examinations of: (a) the lawyer's role in Chinese society; (b) local
protectionism; (c) transparency; and (d) an overview of dispute resolution
procedures in the PRC. The penultimate
section, on transparency, will examine the allocation of rulemaking power,
legislative drafting issues, unaddressed areas of the law, regulatory publications,
administrative interpretation, and the continued development of China's legal
and regulatory infrastructure.
Implicit in the development of the rule of law is
the development of competent, independent community of qualified legal
professionals. The legal community,
too, should enjoy a positive perception in larger society. In addition, in the Chinese context, the
legal community should enjoy increased autonomy from the government. This current reality is a reflection of the
current social and political mores in China.
Changes to these mores should come however, as China's economic
integration into the global trading system exerts pressure for social and
political changes.
China now has over 150,000 lawyers and 8,000
domestic law firms, although most firms are state run, with a smaller number of
private cooperative firms.[4] Relative to China's population, the number of lawyers per capita
is low.[5] In China lawyers represent clients only in 10 to 25 percent of
cases, and criminal defendants have lawyers in about 50 percent of cases. Only about four percent of registered
Chinese businesses have regular legal advisers.[6] Legal ethics are only slowly emerging. The relatively sudden expansion of China's legal sector has
created enormous opportunity for corruption.
For example, it is still a common custom for lawyers to entertain
socially the judges who will decide their cases, or use other types of ex parte contacts in order to influence
the judge.[7]
The central government continues to regulate and
scrutinize lawyers' activities, and lawyers still encounter substantial limits
on the expansion of their roles.[8] There is a major, unresolved contradiction between the idea of an
autonomous legal profession and CPC opposition to autonomous organizations and
professions.[9] 1996 legislation repealed the obligation of lawyers to answer
directly to the Ministry of Justice, although the Ministry of Justice is the
ultimate overseer of China's lawyers.[10] Recognizing that our assumption is that there is benefit in
having an independent lawyer serve as advocate for the client’s interests, we
posit that the relationship between lawyers and the government must be
liberalized.
Clearly, Chinese lawyers must enjoy more actual
independence from the government, freedom from arbitrary treatment, and strong,
autonomous bar associations. The recent
case of Zhang Jianzhong is very concerning.[11] Mr. Zhang, one of China's most prominent private lawyers, has
been held incommunicado since May 3, 2002, for reasons that have not been
disclosed. As chief of the Members
Rights Committee of the Beijing Lawyers Association, Mr. Zhang has spoken out
against the coercion of defense lawyers by the police and prosecutors. Two anonymous legal experts in China
speculate that the allegations against Mr. Zhang involve promotion of false
testimony by a client in a criminal case.
Such charges are based on vague legal provisions, under which defense
lawyers can be prosecuted when their client changes testimony or recants a
prior confession.[12]
Chinese bar associations are not as strong or
autonomous as their western counterparts.
Pursuant to 1996's Lawyers Law, bar associations are limited to (1)
organizing continuing legal education, (2) educating attorneys about their
ethical obligations, (3) conducting exchanges with foreign bar associations,
(4) mediating disputes arising from the practice of law, and (5) other
responsibilities imposed by law.[13] The Ministry of Justice retains power over attorney admissions
and discipline, as well as approval of law firms. At the local level, these powers are exercised by local Bureaus
of Justice, although some powers may be unofficially delegated to the local bar
association.[14]
A primary flashpoint between
local bar associations and local Bureaus of Justice is control over admissions
and discipline. The local Bureaus o
Justice are reluctant to delegate much power in these areas to the local bar
associations because such power is a powerful control mechanism over local
bars. The policy between the Shanghai
bar and local Bureau of Justice is that the latter enlists the former's input
before disciplining an attorney.[15] The primary political obstacles to a truly autonomous bar in
China are (1) the CCP's prohibition against certain types of professional
organizations; and (2) and the local bars' reliance on the assistance of the
local Bureaus of Justice in attorney disciplinary matters.
These issues might be helped by China's commitment,
in the General Agreement on Trade in Services, to liberalize foreign access to
its legal market. The State Council's
Management Regulation on Representative Offices of Foreign Law Firms in China,
effective as of January 1, 2002, allows foreign law firms to provide to foreign
and domestic clients on international legal issues. Foreign law firms must maintain a specific type of operational
structure, and are prohibited from hiring Chinese lawyers. The Regulation outlines a lengthy
registration process for new firms and re-registration process for existing
firms. In the future, it is expected that the current "one firm, one
office" rule that restricted most foreign law firms to a single office in
China will be repealed. The Ministry of Justice has recently published
implementing rules for the Regulation, which went into effect in September of
this year. Increased foreign
participation in China's legal sector demonstrates China’s commitments both to
implementation of its obligations under the WTO and to furthering economic
development through use of a developed legal structure. We believe that the increasing collaboration and interaction
between foreign and Chinese lawyers
will be beneficial in improving the quality of China's domestic legal
sector.
Even if the quality, quantity, and autonomy of
China's legal system improves, the Chinese public's cynicism needs to be
remedied. In some areas, the Chinese
public has lost some degree of faith in the legal system. In the beginning, the public
enthusiastically greeted the development of China's legal system. However, as the number of laws and regulations
increased, social problems increased.
The Chinese public picked up on the fact that the government does not
seriously enforce many laws.[16] Despite the fact that a legal show is among the most popular
television programs in China, there is evidence that programs promoting public
knowledge of the law are decreasingly effective.
As discussed above, a contributing factor to the
public's opinion of lawyers is the prior Chinese legal policy stressed
mediation as a primary means of dispute settlement.[17] Implicit in this policy was the non-use of lawyers. However, there are indications that Chinese
public's perception of litigation is changing.
The number of civil and economic cases per year has risen from 2.4
million cases in 1990 to almost 6 million in 1997. Still, some 60% of the cases brought to the courts are resolved
through some form of mediation.[18] The rise in litigation has coincided with a decline in use of
mediation; 7.4 million cases were mediated in 1990, as compared to 5.5
million in 1997.[19]
The ambivalence of China's leadership to the rule of
law is reflected in the unclear role lawyers are to play in Chinese
society. If China is to successfully
comply with its WTO rule of law commitments, it must create a qualified,
autonomous legal community. The quality
and quantity of law schools must be improved.
Admissions criteria should be tightened, and continuing education should
become a matter of course. Local, and
national, bar associations need to be more autonomous from all levels of the
government. Chinese lawyers need to
recapture some measure of the public enthusiasm that has marked some parts of
legal reform in China.
Uniform applicability of Chinese law and regulation
by sub-national government entities is a major concern. Several members of
the WTO's Working Party on China's accession raised concerns about the
continued presence of multiple trade instruments used by different levels of
government within China. Those members
considered that this situation resulted in a lessening of the security and
predictability of access to the Chinese market.[20]
Specifically, the Members of the Working
Party raised concerns regarding the authority of sub-national governmental
bodies in the areas of fiscal, financial and budgetary activities, specifically
with respect to subsidies, taxation, trade policy and other issues covered by
the WTO Agreement. Some members
expressed concerns about whether the central government could effectively ensure
that trade-related measures introduced or implemented at the sub-national level
would conform to China's commitments in the WTO Agreement and the Accession
Protocol.[21]
In response to these concerns, the PRC
representative to the Working Party averred that sub-national governments had
no autonomous authority over issues of trade policy. Further, the Chinese government would, in a timely manner, annul
local regulations, government rules and other local measures that were
inconsistent with China's obligations.
The Chinese representative further confirmed that the central government
would ensure that China's national and subnational legal infrastructure
conforms to China's WTO commitments.[22]
Despite these affirmations, many WTO members and
foreign investors still have significant concerns over local
protectionism. A root of this issue
might be the economic liberalization policies implemented since 1979. Delegation of power from Beijing to
provinces was seen as necessary for economic growth. Some areas, such as designated Special Economic Zones were
empowered to create a legal infrastructure to regulate foreign investment, even
if such infrastructure conflicts with national law. These policies created local bureaucracies that answer more to
local business and labor than to Beijing.[23] These bureaucracies became prone to making decisions or
implementing policies that aided the local economy, even if such decisions or
policies created an uneven regulatory framework for foreign investors in China.
In order to address these concerns, on April 21, 2001,
the State Council released Regulation Concerning Prohibiting Implementation of
Regional Barriers in the Course of Market Economy Activities. Pursuant to the Regulation, the central
government has been given new powers to discipline local officials who pursue
or implement policies inconsistent with national laws and regulations and, by
extension China's WTO obligations. On
paper, this Regulation is a positive step in China's compliance with its WTO
commitments. However, the Regulation is
drafted in somewhat vague terms, and it is unclear the degree to which local
officials will have to report policies prior to implementation. Further, the effectiveness of this new rule
remains untested.
China's WTO implementation efforts have been focused principally on the central government. While China's sub-national governments have begun a review of their local trade regimes for WTO consistency, most have not yet fully implemented WTO obligations. At the present time, coastal areas of China as well as Beijing are ahead of western China in implementing WTO commitments. Local level knowledge of China's WTO commitments and their implications for daily government operations is at a low level. The number of WTO-familiar local officials needs augmentation. While Guangdong and Jiangsu provinces and Shanghai, and Beijing cities have opened WTO consulting centers, many of these offices are understaffed and underdeveloped. Despite the national government's efforts, there are indications that many local officials remain reluctant to implement standards that could weaken their control over the local economy.
Opacity in the drafting, review, and interpretation
of the laws, regulations and other measures applicable to China's WTO
commitments were a significant concern for the WTO Working Party on
China's. Members noted the difficulty
in finding and obtaining copies of Chinese laws, regulations and other measures
overseen by various national ministries and subnational authorities.[25] These members also emphasized the importance of publication of
such regulations before implementation to ensure secure, predictable trading
relations.[26]
In response, the PRC representative stated that the
national government regularly issues several publications providing information
on China's foreign trade system.[27] Further, all laws, regulations, and rules relating to foreign
trade issued by the PRC's regulatory departments are published by the central
government.[28] The Chinese representative further stated that information concerning
China's international trade regime would be published in the
"International Business" newspaper and the "MOFTEC
Gazette".[29] Moreover, the Chinese representative confirmed that China would
make available to WTO Members translations of all laws, regulations and other
measures pertaining to or affecting China's WTO commitments, and would make
such laws, regulations and other measures available before they were
implemented or enforced, but in no case later than 90 days after they were
implemented or enforced. Further, China
committed to establishing one or more enquiry points for the foregoing
information.[30] Despite these commitments, significant transparency hurdles
remain in place.
This section is divided into five subparts, all
relevant to the discussion of the transparency of China's regulatory
structure. This section will examine
the allocation of rulemaking power across China's bureaucracy, the drafting
process for laws and regulations, uncovered areas in Chinese law, publication
of law and regulation, administrative interpretation of law and regulation, and
the further development of China's legal infrastructure.
The diffusion of rulemaking power among the more
than twenty functional bureaucracies of the central government is a major
transparency issue.[31] The State Council, which is the head of the executive branch of
the central government, supervises more than 30 departments including
ministries, commissions, administrations and offices.[32] Further, foreign investors are concerned about the legislative
power of provincial governments, which has expanded during the reform era.
Part of this diffusion may be caused by Article 7 of
the Law of the People's Republic of China on Legislation. Article 7 provides that the National People's
Congress and Standing Committee of the CPC jointly exercise state legislative
power in complementary spheres. The
National People's Congress enacts and amends criminal, civil, and state organic
laws and other basic laws, while the Standing Committee of National People's
Congress enacts and amends laws other than those to be enacted by the National
People's Congress.[33]
Many departments under the State Council possess
some level of authority to issue regulations implementing specific legislation.[34] Issuing authority is derived from a general rulemaking power
assumed by these departments, enabling them to issue any rule that is necessary
to carry out their functions.[35] No procedural rules in place to govern enactment of these
regulations, which may be issued or amended by any agency (not only the issuing
agency) with subject matter jurisdiction over the regulation. There is no system in place to see if
subnational laws or regulations contradict national laws or regulations. Even if a conflict is found, there are no
clear procedures to address such conflict.
As a result, it is not uncommon (although it is becoming rarer) for
Chinese laws, regulations or rules to contradict one another.
There are several ramifications to the diffuse
rulemaking power in the PRC.
Bureaucratic infighting is not uncommon, as several overlapping
departments compete to regulate a specific area. For example, before the promulgation of the Securities Law, the
China Securities Regulatory Commission and Ministry of Finance would engage in
frequent turf battles over stock market regulation. Further, and more recent, a turf battle between the Ministry of
Foreign Trade and Economic Cooperation, the key central government agency
charged with regulating foreign investment in China ("MOFTEC") and
the State Postal Bureau may have caused China to not fulfill its WTO
obligations with respect to international courier services. While Premier Zhu Rongji has been somewhat
successful in stemming this infighting, several officials have privately
expressed concern about the ability of Zhu's as-yet-unnamed successor (assumed
to be either Wen Jiabao or Li Changchun) to stem such infighting. The Chinese government needs to streamline
and clarify legislative authority to increase government transparency.
At all levels of the Chinese government, vague
legislative drafting adds to the opacity of China's regulatory structure.
Flexibility is a major goal of Chinese legislative drafting, and drafters
typically use language that creates wide leeway for administrative discretion.[36] Standard drafting techniques include the use of general
principles, undefined terms, broadly worded discretion, omissions, and general
catchall phrases.[37] Much in Chinese legislation is fleshed out only over time in
implementing regulations and opinions that may take years to be issued or
become available.[38] Therefore, because of ambiguity in legislative drafting, as
stated in the previous subsection, regulatory entities will have significant
opportunities to affect the implementation and meaning of such law or
regulation. Foreign investors must
regularly return to the authorities for interpretation and clarification of
certain laws or regulation, the basis of which interpretation or clarification
are not often transparent.[39]
Some commentators suggest that poor legislative
drafting is a result of the low technical qualifications of members of the
National People's Congress and local congresses, and the fact that such
legislative bodies meet infrequently.[40] These entities often act as rubber stamps for government
initiatives and, in practice have authority and status below that stated in the
Constitution.[41] Hu Jintao, Chinese Vice President and presumed successor to Jiang
Zemin, has stated that the Communist Party must improve the selection criteria
for officials, with a goal of improving the quality of such officials. A reported statute on appointing officials
provides that a person must have working competence and moral integrity in
order to serve as a government official.[42]
Until the run-up to WTO accession, the Chinese
government usually did not allow public participation in the drafting
process. Administrative departments
have either circulated unofficial copies of draft measures to concerned
industry representatives and scholars for comment or have issued new measures
in final form without providing a formal opportunity for comment before
implementation. During the pendency of
China's WTO accession, the central government began to consider a system to solicit
input from interested parties before issuing trade and investment laws or
regulations. The Regulations on
Administrative Regulation Formulation Procedures and the Regulations on Legal
Code Formulation Procedures, both effective from January 1, 2002, require the
publication of amended or new administrative regulations and codes thirty days
before their adoption. Further, these
Regulations allow issuing bodies to solicit comments from authorities,
organizations, and civilians during the drafting process. After China's accession, the China
Securities Regulatory Commission, for example, issued draft regulations on
foreign investment in securities companies and on establishment fund management
companies for public review and comment.
Face-to-face consultations between government
agencies and industry representatives on the text of new measures are becoming
more common. However, the
above-mentioned Regulations do not establish a formal mechanism for
incorporating public opinion into the drafting process. There is no concept in Chinese legal culture
similar to "legislative history."
Further, there are indications that "public" commentators are
selected and supervised by the relevant government ministry.
While China has promulgated a large number of laws
and regulations in recent years, existing law or regulation does not cover many
commercial law areas. Implementing
regulations must still be promulgated in other areas. Specifically, the Chinese government must adopt laws on investment
funds.
Until appropriate law or regulation is adopted,
foreign invested enterprises must fill the gaps by extrapolating by analogy
with existing regulations, obtaining an administrative ruling or opinion from a
policy maker, or shopping around for a "friendly" jurisdiction within
China.[43] A comprehensive legal framework, coupled with adequate prior
notice of proposed changes to laws and regulations, and an opportunity to
comment on those changes, would greatly enhance business conditions, promote commerce
and reduce opportunities for corruption.
Such a framework will augment the transparency of China's legal
infrastructure.
Finding governing law or regulation has been
difficult for foreign investors in China.
In a 1992 bilateral market access memorandum of understanding between
the United States and China, the central government agreed to publish certain
laws, regulations, and rules. As
mentioned above, China agreed to provide a copy of new laws, regulations and
other measures to the WTO Secretariat in Geneva, translated into one or more of
the WTO's official languages (English, French and Spanish) no later than 90
days after implementation.
Pursuant to these commitments, MOFTEC (in the MOFTEC
Gazette) publishes new regulations related to foreign trade, complementing the
central government's effort to publish existing laws and regulations.[44] Further, pursuant to the Regulation for Putting on Record Rules
and Regulations, effective as of January 1, 2002, all agencies promulgating
rules or regulations are to submit the preceding year's rules and regulations
to the State Council's Legal Affairs Office by January 31 of each year. However, this Regulation does it predict the
degree to which subnational governments would conform to the Regulation. Further, it is not clear how the Legal
Affairs Office would be empowered to ensure compliance with the Regulation's
strictures.
Lack of information about relevant regulations
continues to be a problem for foreign invested enterprises. The central government continues to restrict
publication of some legal and regulatory materials, and despite the wider
availability of Chinese law and regulation on the Internet and in libraries,
some sector-specific regulations are not publicly known. The MOFTEC Gazette has
a reputation for being imperfect, incomplete (for example, no coverage of
sub-national regulations), and untimely.
Further, China still maintains a number of
unpublished laws and regulations (called neibu)
in violation of WTO transparency principles.
Neibu materials are usually
internal policy directives that concern the implementation and interpretation
of laws that may not be publicly disclosed before promulgation.[45] The central government has not indicated how it will address the neibu issue. Thus, foreign invested enterprises in China have expressed
concerns regarding whether China will actually publish all "measures"
related to trade, as required by its WTO commitments.
Some Working Party members requested that China
designate independent tribunals, contact points, and procedures for the prompt
review of all administrative actions relating to WTO issues.[46] Members stated that such tribunals should be independent of
administrative agencies and have no interest in the outcome of the matter. In its Accession Protocol, China committed
to establish tribunals for the review of all administrative actions relating to
the implementation of laws, regulations, judicial decisions and administrative
rulings.
At times, the Chinese bureaucracy has taken action
based on vague justifications of "state security" or "public
order." The recent case involving
the government's blocking of the Google website is illustrative of this
phenomenon. Google.com, a search site,
provides links to websites requested by a user. If one entered "Jiang Zemin" into the search field at
Google.com, the fourteenth result would be a link to a site in the United
Kingdom with an interactive game entitled "Slap the Evil Dictator Jiang
Zemin." The Chinese government
blocked access to Google.com without informing the company or the public. When pressed about their action, Chinese
officials only provided vague answers justifying their actions. In order for China to fulfill its
transparency commitments, it must use "state security" or
"public order" less frequently; when used, such concepts must be
explained transparently.[47] Apparently, access to the Altavista search engine has been
blocked in the past day or two, with no notice or justification. A recent fire at a Beijing internet café
that killed a number of young students has been used as justification by the
central government to close all internet cafes in China. Such actions adversely impact the transparency
of central government action.
Chinese administrative agency power to both issue
and interpret their own rules and require the courts to enforce such rules
concerns foreign investors.[48] Chinese government entities have sometimes been accused of
selectively applying regulations. For example, customs officers have
significant leeway in classifying and valuing an imported item, leading, at
times, to negotiated classifications and valuations. This power has been used by administrative agencies to protect or
increase their jurisdiction or advance their policies. There are few procedures in place to appeal
regulatory decisions. It is unclear
whether this situation will change in the near future. A new administrative procedure law is
reportedly in the works, but there are indications that there will be no
ability to review legality of general rules.
Business licensing is another area of concern for
foreign invested enterprises. A draft
Law on Administrative Licenses may reduce the influence of administrative
agencies in licensing. The draft law proposes
to rigorously restrict the power of government bodies in the licensing sphere
by removing business licensing power from departments under the State Council
and subnational governments. A goal of
the draft law is to have licensing power exercised by fewer entities,
preferable a single entity, so those applicants have only a single licensing
point.[49]
The power of Chinese administrative entities
highlights ineffective Chinese law. The
Administrative Litigation Law, adopted in 1990, provides affected persons or
organizations the right to sue administrative agencies that may have acted
unlawfully.[50] By 1995, over 50,000 actions were brought under this law,
although the plaintiffs lost considerably more than 50% of the cases.[51] Further, the courts' power to restrain administrative
arbitrariness remains limited.[52] The actions of administrative agencies in applying rules in
specific situations may be reviewed only if the agency has violated a law in
the application of the rule. This burden
is difficult to satisfy given the vague drafting of Chinese law and
regulation. As a result, many Chinese
agencies assume almost unreviewable administrative discretion.
Another statute, the Administrative Litigation Law
also restricts the scope of a court's jurisdiction over administrative
agencies. Under this Law, courts may
not decide the validity of general rules issued by administrative agencies or
decide whether agencies abused their discretion.[53] Although 1999 amendments to this Law empowered courts to review
certain general rules, findings adverse to regulatory agencies are rare. Even if an agency act is challenged in
court, many suits are withdrawn for fear of some sort of administrative
retaliation.
The Regulation for Putting on Record Rules and
Regulations (discussed above) is an interesting development in this field. This Regulation establishes a judicial
inquiry process whereby the State Council's Legal Affairs Office may interpret
certain rules and regulations upon a written request by specified
entities. It is not clear how the
Regulation will affect exiting Chinese administrative practice.
China has made significant changes to its legal
infrastructure as a result of WTO accession.
These changes include modifications of the "paper"
infrastructure and changes to its bureaucratic infrastructure. After WTO accession, the PRC adopted and
implemented a revised Catalogue Guiding Foreign Investment in Industry that
reflects China's WTO market-access commitments. Among other changes, the revised Catalogue eliminates differences
between the former Restricted A and Restricted B categories and allows foreign
investment in a broader range of industry sectors. Further, various PRC government sources indicate that several new
or revised laws are in the pipeline, including a Retailing Law, a Wholesaling Law, and a revised Foreign Trade Law. We do not know when such laws will be made
open for comment or adopted.
China also improved its "paper" legal
framework in the intellectual property area by amending its patent, trademark
and copyright laws to comply with the WTO Agreement on Trade-Related Aspects of
Intellectual Property Rights ("TRIPS"). These revised regulations came into force after China's WTO
accession, and include greater capacity for allegedly injured parties to seek
injunctive relief. Implementing
regulations for the revised Trademark Law came into effect on August 11, 2002
and for the revised Copyright Law on August 14, 2002. As with many Chinese laws, however, significant problems remain,
particularly in the area of enforcement. Poor enforcement, combined with weak
punishments, mean that intellectual property violations are still rampant. We also have indications that the central
government is considering disregarding international patents as such relate to
AIDs medicines.
As a complement to these modifications to
"paper" infrastructure, the central government created new
bureaucracies and offices to assist with the challenge of WTO membership. On January 24, 2002, MOFTEC launched its
China WTO Notification Inquiry Center in Beijing. According to a MOFTEC announcement, all WTO members, Chinese or
foreign enterprises, and individuals may consult with this center about
relevant laws and regulations. Pursuant
to the MOFTEC announcement, inquiries are to be satisfied within thirty days of
receipt. MOFTEC also created two new
departments: The Department of WTO Affairs and the Fair Trade Bureau for Import
and Export. Using personnel from the
existing department of International Trade and Economic Affairs, the Department
of WTO Affairs is in charge of China's overall relations with the WTO,
including implementation and litigation. The Fair Trade Bureau for Import and
Export oversees China's antidumping, anti-subsidy, and protective measures and
related lawsuits.
We have indications that the
central government is considering an overhaul of China's tax system. These changes would bring China's tax system
in compliance with its WTO commitments.
There is some indication that, among other reforms, changes to the PRC's
tax system could include ending the preferential tax treatments currently
enjoyed by foreign investors.
Subnational governments have
also been active in this arena.
Recently, the Beijing Foreign Economic and Trade Commission established
the Beijing Center for Handling Complaints Lodged by Foreign Invested
Enterprises. These types of offices
likely will become initial contact points for specific WTO implementation
concerns. Reports indicate that these
centers, however, have limited staff and functions primarily as a transfer
point for incoming complaints.
The independence and professionalism of China's
judiciary will impact China's ability to satisfy its WTO commitments. In the run-up to WTO accession, the Supreme
People's Court hosted fora on WTO rules, and obtained training from current WTO
members. Further, the Court screened
some 2,600 verdicts for consistency with WTO principles, and overturned 177.[54] Despite these efforts, skepticism about the court system and the
enforceability of court judgments and awards remains high among foreign
companies. The skepticism is driven by
(1) a lack of a tradition of civil adjudication, and a widespread assumption
that judgements are rendered on personal affiliations, not on the case's
objective merits; (2) lack of capacity; and (3) a tendency in the court system
to avoid strong positions.[55] As stated above, this current reality is a reflection of the
current social and political mores in China.
Changes to these mores should come however, as China's economic
integration into the global trading system exerts pressure for social and
political changes.
In 1999 the Supreme People's Court provided that
judges should be appointed competitively based on merit, rather than through
pure politics or favoritism.[56] While the new qualification regulations specify educational
standards for Chinese judges, the regulations appear to grandfather use of
existing judges. Before this regulation,
only 10-15% of judges had any sort of legal education, and many did not have
any post-secondary education. The new
regulation requires a judge to have a university degree and at least some prior
legal experience. As of 2002, at least
80 percent of judges have the requisite certification.[57] Further, an Academy of Judges was established in Beijing,
providing continuing education for judges and training for future judges.[58]
High court fees and delays are common. Certain
Chinese jurisdictions are, however, attempting to streamline judicial
timelines. As of August 1, 2002, under
a reform launched by the Higher People's Court of Shanghai, simplified court
procedures in certain civil cases have dramatically reduced the amount of time
to hear or settle a case.[59] While this reform is a positive step, it does not embrace cases
involving foreign interests, nor is it a nationwide reform.
There are genuine concerns about the independence of
China's judiciary. Criminal cases are
often handled in a manner consistent with national policies, and party
influence is also brought to bear in civil cases. It is possible that party influence could expand. Under a recently proposed draft Law on
Supervision of Administrative and Judicial Bodies, local and national people's
congresses could expand their oversight of China's judiciary. This oversight would be accomplished through
examination of budgets, reviews of work reports, and investigations on specific
issues. Although the Chinese
Constitution guarantees the people's congresses the right to oversee the
judiciary, this draft law could harm developing the rule of law in China.[60]
As discussed above, China's courts have very limited
jurisdiction over administrative actions.
Courts may only review legality (not the reasonableness) of the application
of the law to particular circumstances.
Further, courts can't review the inherent validity of any specific
regulation. Since regulations are
drafted vaguely, courts often defer to the agency's own interpretation. Pursuant to the Administrative Litigation
Law, courts can't invalidate regulations, but can refuse to apply a regulation,
although nonapplication is a rare event
Implementing an effective ethics system is another
issue facing China's judiciary.[61] It is not uncommon for courts to accept cases to help local
parties, even if it means a deliberate misinterpretation of the law. As mentioned above, lawyers often entertain
judges before whom the lawyer has a pending case. In addition, there are instances of judges accepting money and
gifts from parties with business before the judge. There is a widespread perception that judges, particularly
outside of China's big cities, are more influenced by local political or
business pressures than they are by written regulations or signed
contracts. There are instances of local
protectionism by judges, such as a refusal to enforce judgments against
locals. Further, it is not uncommon for
lower courts to consult with or ask instructions from higher courts even in
advance of hearing cases. Legal opinions are often opaque in that they are
usually very short and don't discuss evidence[62], the parties' claims or the
legal reasoning underlying the decision.
Related to an ethics system, the specter of
corruption stalks China's judiciary.
Formal anti-corruption measures for judges were adopted in the late
1980s, but are ineffective.[63] Anti-corruption campaigns are not effective because the legal
system lacks independence and the dominance of the CPC has meant "the
officials assigned to clean up the corruption were very often the same
officials who were engaged in it."[64] A recent incident in Jingzhou highlights this issue. Two judges at an intermediate court in the
Hubei province city were sentenced to ten and 14 years, respectively, in jail
for embezzling approximately $71,000 from a court account. The judges used this money to cover gambling
debts incurred on a recent trip to Macao's casinos.[65] The central government has made efforts to stem the tide of
corruption in its society. These
efforts range from the closing of heavily indebted businesses, prosecutions of
corrupt bureaucrats, and, unfortunately, the executions of a number of
allegedly corrupt high-level politicians.
Despite some issues with this effort, particularly the carrying out of
capital punishment, China's recent anticorruption efforts are a step in the
right direction.
These issues coalesce in a manner that makes
investors unable to predict whether, in a given situation, a written contract
or codified law or regulation would prevail over guanxi. These issues have
often caused both foreign and domestic companies to avoid enforcement actions
through the Chinese courts. The Chinese
government is moving to establish consistent and reliable mechanisms for
dispute resolution through the adoption of improved codes of ethics for judges
and lawyers and increased emphasis on the consistent and predictable
application of laws.
To that end, in late February 2002, the Supreme
People's Court announced that it was designating a number of courts at provincial
and local levels to handle commercial cases involving foreign parties. Pursuant to the Supreme People's Court Regulations on Certain Issues Regarding
Jurisdiction of Foreign-Related Civil and Commercial Lawsuits (effective March
1, 2002), the lowest level people's courts and a great number of intermediate
people's courts from are prohibited trying certain foreign-related civil and
commercial lawsuits. Five types of
foreign-related civil and commercial lawsuits must be tried first by one of a
small group of higher-level people's courts: (1) foreign-related contract and
tort disputes; (2) disputes related to letters of credit; (3) applications for
revocation, admission, or enforcement of foreign arbitral awards; (4) review of
the validity of arbitration clauses in foreign-related civil and commercial
transactions; and (5) applications for admission and enforcement of foreign
court judgments. Courts authorized to
hear such cases include: (1) people's courts in economic and technology
development zones approved by the State Council; (2) intermediate people's
courts in provincial capitals and "centrally-governed
municipalities"; (3) intermediate people's courts in special economic
zones and "separate plan municipalities"; (4) other intermediate
people's courts designated by the Supreme People's Court; and (5) high people's
courts. According to a press release by
the Supreme People's Court following the announcement of these regulations, the
promulgation of the Regulations aims at optimizing the country's judicial
resources by giving foreign-related cases to the more experienced courts and
minimizing local protectionism by broadening the geographic area under the
jurisdiction of an authorized court.
China's chief justice recently decried judicial
incompetence and promised reforms in judicial recruitment and training. Xiao Yang, president of the Supreme People's
Court stated, in July 2002, that low recruitment and training standards are
large factors in China's judicial inequity.
Mr. Xiao also decried the fact that China's judiciary is treated as a
branch of the government, rather than an independent entity; reform goals
include strengthening the judiciary's immunity from local government influence,
increasing judicial pay, and improving the judiciary's real and perceived
integrity. Further, Mr. Xiao proposes
that judges be required to pass two sets of exams (with existing judges
required to complete a law degree or face expulsion); Mr. Xiao proposes that
judges be disciplined or dismissed only after an appropriate hearing.[66]
In these written comments, the China Law Committee
has attempted to review the rule of law commitments China made in connection
with its WTO accession. China made
significant commitments to join the WTO, and faces significant challenges in
complying with such commitments. In the
ten months since China's accession it has, on paper at least, made a concerted
effort to implement and observe its WTO commitments. During the short period since accession, we have not come across
empirical proof that China has disregarded its WTO commitments. Events of nonconformity may arise when China
moves to implement the "paper" law changes it made in connection with
WTO entry.
In reviewing this issue, policymakers should have
several goals in the development of the rule of law in China. These goals should include (1) the
development of legal and judicial infrastructure that are autonomous; (2)
increasing the quality and quantity of China's law schools and lawyers; (3)
improved regulatory transparency through fair notice and hearing provisions,
public promulgation of legislation, and the availability of legal information;
(4) observance of legal mechanisms respecting human rights in China; (5)
improving China's legal culture; (6) assuring procedural regularity in the
legal process, uniform application of legal rules, and principled appellate
review and oversight; (7) removing the links between local courts and local
government, creating top-down management of courts, from Supreme People's Court
on down; (8) tightening the time gap between promulgation of law and release of
implementing regulations; and (9) restricting legislative drafting to
legislatures, not administrative departments.
All of these specific goals point to a broader
policy goal: building China's capacity to fulfill its rule of law-related and
other WTO commitments. The most
effective avenue for such capacity building is the provision of technical legal
assistance. This Administration should
continue to support legal reform programs in China. The Administration should also work with Congress to ensure that
the legal assistance programs envisioned by President Clinton and Jiang Zemin
are fully funded. The technical legal
assistance programs should be responsive and provide legal assistance in a
timely manner. Programs should also be
coordinated, both within the United States and with the larger world
community. These programs should not
waste effort through duplication.
Lastly, the priorities of these programs should reflect specific needs
in China, not necessarily the priorities of program donors.
The China Law Committee is pleased to provide the
Office of the United Stated Trade Representative with these comments. We hope that this process will result in
closer relations between the United States and China, and will further the
development of the rule of law in China.
The China Law Committee is ready to assist in this process in any
appropriate manner.
Appendix A
Background Materials
The concept of "rule of law" is enjoying a
renaissance as an international relations buzzword, especially in the United
States. Recent American foreign policy
initiatives have promoted the rule of law as a normative goal. Some of this attention has fallen on China,
with many American government entities and nongovernmental entities engaging in
technical legal assistance programs in China.
The rule of law, as a concept has, many facets but no precise
definition. Broadly speaking, the rule
of law could be defined as a system wherein laws are public, objective,
efficient, and applied evenly.
In developing a system based on the rule of law,
experts have noted that legal reform can be divided into three phases: (1)
reform of subject-specific laws; (2) capacity building of legal institutions;
and (3) increasing government's compliance with the law.[67] These experts note that a system does not embrace fully until it
has completed stage three. They further
note that, in the developing world, legal reform usually ends before phase
three is completed. According to
research, the primary hurdles for developing a society based on the rule of law
are (1) rulers who refused to be ruled by law and (2) public cynicism about
rule of law efforts.[68] Legal reform efforts often stall at the "rule by law"
stage rather than the "rule of law" stage.[69]
As many commentators will note, China has, on paper
an impressive system of law and regulation.
However, enforcement and interpretation of the law creates significant
problems in China. Economists refer to
"paper" law as de iure
judicial independence, an indicator that can be defined by examining the letter
of the law. The second kind of judicial
independence is referred to as de facto
judicial independence, which measures the degree to which "paper" law
is implemented in an objective, efficient, and effective manner.[70] Economists have found that development of de iure judicial independence has no effect on a nation's economic
growth, while development of de facto
judicial independence has a positive correlation with economic growth.[71] Therefore, development of competent,
effective, and independent legal institutions is at least as important as
developing a comprehensive legal structure on paper.
As with any review of China, historical context is
crucial in understanding the past and the challenges ahead. This is especially true in the rule of law
context. As Kenneth Lieberthal writes:
China had literally no legal system and no law in a
western sense as of 1977. When the PRC
was founded, the party declared all Guomindang laws invalid and during the
early 1950s it began to develop a new legal code to replace defunct GMD
statutes. This effort, however, came to
a halt at the beginning of the Great Leap Forward and it never resumed. As of 1977, therefore, China was governed by
decrees, bureaucratic regulations, and the personal orders of various
officials; it had no codes of law at all.
In addition, many decrees, regulations and so on were kept secret.[72]
Since 1978 Chinese leaders have recognized that
development of a rules-based system and economic development. According to some elements of the Chinese
government, emphasizing and amplifying on the rule of law coincides with the
notion that economic modernization requires "getting on track with the
international community."[73] Despite this recognition, there are varied perspectives on the
actual development of the rule of law in China. Once commentator states that the last few decades in China have
witnessed "the most concerted effort in world history to construct a legal
system."[74] Another commentator doubts "whether a true rule of law
exists, or will ever exist, in China" given its "legacy of the past
and persistent political intermeddling."[75]
In the run-up to WTO accession, China demonstrated a
commitment to the rule of law. The
PRC's central leadership launched a top down review of all laws and regulations
to determine WTO compatibility prior to accession. During this process, the State Council reviewed regulations
issued by some thirty-five ministries and bureaus, including all relevant
regulations promulgated by the Ministry of Foreign Trade and Economic Cooperation
("MOFTEC"). MOFTEC itself
amended over 2,000 laws and regulations, abolished over 800, and announced an
intention to adopt over 300 new laws and regulations, all in order to make
China's legal system more consistent with its WTO commitments.[76] Notably, in this process, the Chinese government published long
lists of repealed and amended laws and regulations.
While the pace of this legislative and regulatory
activity is impressive, the results are admittedly untested. There is concern that this process may have
emphasized speed over accuracy or thoroughness; a "two steps forward, one
step back" concern. Further, this
activity does not address the challenges of administrative discretion, opaque
regulation, and local protectionism that will be discussed in more detail,
below.[77] Before examining China's rule of law WTO commitments, it is
useful to briefly examine the development of the rule of law in China.
Three pre-1949 philosophical influences continue to
affect the perception and development of rule of law in China. Confucianism, the first of these influences,
was state ideology in Imperial China.
Confucianism placed an emphasis on preserving order, valued hierarchy in
both political and socialized spheres, and required that people should
understand the correct conduct demanded by each type of relationship and act
accordingly.[78] The second influence, Daoism, advocated inaction, political
passivity, and opposed institutions, organizations, moral laws, and government.[79] The third philosophical influence, Legalism, advocated punishment
and rewards to keep public order, and viewed the law as an instrument to ensure
stability and continuity.[80] In China's imperial system, as the "Son of Heaven" and
"Ruler of All Under Heaven," the Emperor assumed responsibility for maintaining
"civilized" society and for mediating the relationship between that
society and heaven. The result is that
imperial China is characterized as "rule of man" (renzhi) rather than "rule of
law" (fazhi). The legal system, therefore, existed as an implement
to govern and control the public for the benefit of the rulers.
Given these philosophical underpinnings, it is not
surprising that early Chinese social theory expressed deep skepticism about the
corrective function of law. Judges were
viewed as the emperor's agents and lawyers were held in low esteem. The only lawyers permitted to practice in
imperial China were the state's own legal specialists. Even as late as the Qing
dynasty, which ended in 1911, to initiate legal action was a crime, and lawyers
were derided as "people who write with poisoned pens."[81] Modern Chinese legal theory continues to reflect a combination of
these influences.[82]
A first western view into imperial China's legal
system came from Lord Macartney's 1792-1794 mission to China. The mission brought back a copy of the Qing
Dynasty legal code, an examination of which illustrated that China had a unique
conception of the law.[83] Under this code, there was no independent judiciary either in the
provinces or in Beijing. Instead, country
magistrates acted as detectives, judges, and jury.[84] These magistrates accumulated evidence, evaluated the evidence,
rendered a judgment, and passed sentence.
Although the magistrates often relied on a member of their clerical
staff who was familiar with the law, there was no independent profession of law
and no lawyers.[85] Potential defendants commonly paid bribes to the mediator's staff
in order to dismiss the action. These
"yaman runners" supplemented their incomes by accepting bribes to
quiet legal matters.[86] The Qing-era legal system maintained the hierarchical social
values that were propagated through the central government's Confucian
teachings.[87]
The period from the start of the disintegration of
China's last dynasty to the Communist victory in 1949 was marked by political
turmoil, including foreign invasions, native uprisings (such as the Taiping and
Boxer rebellions), and the effects of global and civil war. British victory in 1842's Opium War, and the
resulting treaty between the United Kingdom and China, began a series of
unequal treaties executed by the Qing dynasty that favored Britain, France,
Russia, and the United States. Adding
to the turmoil, Japan invaded China twice, from 1894 to 1895 and then from 1931
to 1945. Hastening the fall of the Qing
dynasty, Sun Yat-sen led a rebellion that resulted in the declaration of a
Chinese republic in 1911. This first
Chinese revolution dissolved into a dictatorship and "a decade of
warlordism" from 1916 to 1927. The
Nationalist revolution that coincided with the struggle against Japan in World
War II from 1931-1945 disintegrated into a civil war between Nationalist and
Communist factions that was not resolved until the Communist victory in
1949. Obviously, this turmoil was not
propitious for legal development.[88]
Given Mao Zedong's belief that the legal system only
"dams up the free flow of revolution," it is not surprising that
legal training began to wane after the Communist victory in 1949. After their victory, the Communist Party of
China ("CPC") enjoyed absolute control over the creation of law by
the organs of the state and governed by decree rather than law. Further, the CPC believed that the law is an
ideological instrument of politics.
This legacy continues to influence the development of the rule of law in
China.[89]
At the time of 1957's "Hundred Flowers"
movement, there were approximately 800 law offices in China served by 2,500
full-time and 300 part-time lawyers.[90] As a result of the "Hundred Flowers" movement and
related "Anti-Rightist" campaigns, the private practice of law was
banned, law libraries were disbursed or destroyed, and law faculties were sent
to the countryside. The number of
lawyers decreased by some 70 percent.
Legal knowledge was limited to those in certain government ministries
and within the state controlled judiciary.
In 1959, the Ministry of Justice itself was abolished, along with any
possibility of organizing lawyers' groups.
Although some law schools remained open, they had few students and
concentrated on political rather than professional legal training. Harkening back to the baojia concept, during this period, most civil cases were handled
at a local city ward or a rural brigade by mediators; People's Courts at all
levels come to a standstill.
More upheaval was on the horizon. The Cultural Revolution was enormously
disruptive to the development of China's legal system. The Cultural Revolution disrupted all
concept of law by eliminating virtually all legal professionals and closing all
law schools. Indeed, Chinese leadership
praised "lawlessness", and lawyers were relocated to farms and
factories for reeducation. Lawyers and
the law were deemed to be "counter-revolutionary" by definition. Mao stated, "We want the rule of the
individual not the rule of law."[91]
After the end of the Cultural Revolution and the
fall of the "Gang of Four," Deng Xiaoping and his successors
recognized the mistake of decimating China's legal system.[92] In 1978, China's government began to recognize what constituted
each citizen's rights and freedoms and what "ruling the country by
law" would entail. Laws and
regulations revoked before 1978 were restored, legal colleges were established,
and thousands of new laws were promulgated.
The Ministry of Justice was reestablished, and the four-tiered system of
state courts was revamped. However,
regulations covering "counter revolutionaries and anti-socialist
reactionaries" provide considerable flexibility to the Chinese government
in interpreting and enforcing laws and regulations. The work begun in 1979 has continued, with Chinese President
Jiang Zemin recently stating that the CPC is fully committed to "govern
the country according to law."[93]
During the 1980s, the PRC began to reconstruct its
legal system and to make more transparent its extensive bureaucratic
regulations. The government also
increased attention to developing a court system with judges knowledgeable
about the law and legal procedure. Many
judges came from the military and often lacked training as lawyers. However, the central government did begin
the process of creating certain specialized courts, such as the intellectual
property courts. A new Criminal Code
was implemented in 1980; a written Constitution was first adopted at the Fifth
National People's Congress on December 4, 1982; and the General Principles of
Civil Law, the first general civil law in the PRC was promulgated in 1986.[94] Important for an analysis of China's commitment to its WTO
obligations, Article 142 of the General Principles of Civil Law states:
The stipulations of the international treaty shall
apply if any international treaty concluded or joined by the People's Republic
of China contains provisions different from those in the civil laws of the
People's Republic of China. However,
provisions concerning which the People's Republic of China has announced
reservations shall be exempted.
International practice can be applied to matters for which neither the
law of the People's Republic of China nor any international treaty concluded or
joined to by the People's Republic of China has any prescription or
stipulation.
Throughout the 1980s, the realization that a modern
market economy requires a modern legal framework continues to grow in China. To that end, new laws such as the Marriage
Law (1980), Economic Contract Law (1981), Trademark Law (1982), Patent Law
(1984), Inheritance Law (1985), Enterprise Bankruptcy (1986) are enacted to
cover various issues. The government
also undertook "law popularization" campaigns to educate the public.[95]
During these initial development stages of China's
legal infrastructure, the role of lawyers evolved. Provisional regulations on lawyers were adopted in 1980 and by
1982 there were 5,500 full-time lawyers and 1300 part-time lawyers working in
China.[96] To augment these numbers, the Ministry of Justice in 1982
announced that 5,700 "outstanding army officers" were being
transferred to the civilian sector, given legal training, and assigned to the
court system or public security departments.
By the mid-1980s, twenty universities were offering law courses, with an
aggregate enrollment of 2,000. Law
students had to complete their course work, prove that they "cherish the
PRC and supported the socialist system," and pass a bar examination in
order to become lawyers.[97]
In the early 1990s, Deng Xiaoping took an inspection
tour to southern China, and remarked that the objective of China's economic
reforms was to develop a socialist market economy with the aim of "further
liberating and developing productive forces." In an effort to further economic development, China passed much
new legislation. A number of important basic laws concerning civil procedure,
criminal procedure, criminal law, securities, and contract law were introduced
or modified to serve as effective guarantees for the developing market economy.[98] Despite these developments, the quantity and quality of lawyers
in the Chinese system is an obstacle to reform. In 1993, the PRC had only 50,000 lawyers, but government has
committed to training an additional 100,000 by the end of the 20th
century.
In 1993, the Central Committee of the Chinese
Communist Party issued the Decision of the CPC Central Committee On Some Issues
Concerning the Establishment of a Socialist Market Economic Structure.[99] Several aspects, specifically section IX, of this Decision
address the rule of law. In section IX,
the Central Committee of the CPC stated that the PRC must "pay due attention
to tightening up the legal system, bringing the effort of reform and opening up
to the outside world within the framework of a legal system, and learning how
to manage the economy by legal means."[100] In further developing a legal system,
The goals are: first, following the principles
described in the constitution to speed up economic legislation, further improve
civil, commercial and criminal laws and the legislation associated with state
organization and administrative affairs, and initially establish a legal system
adapted to the socialist market economy by the turn of the century; second,
reforming and improving the judicial and administrative law enforcement
mechanism and heightening proficiency in judicial and administrative law
enforcement work; and third, establishing a sound law enforcement supervisory
mechanism, improving legal service organizations, deepening education in the
legal system, and enhancing the sense of law and awareness of the legal system
throughout society.[101]
Continuing this momentum, in 1997, the National
People's Congress explicitly incorporated the rule of law as a basic guiding
principle into its foundation documents, and made the rule of law a separate
subject in the plan for the reform of the political system. At the same time, the National People's
Congress also proposed to institute a comprehensive legal framework with
Chinese characteristics by the year 2010.
The role of lawyers in the Chinese system remained
unclear until 1997's adoption of the Law of the People's Republic of China on
Lawyers.[102] Prior to the adoption of the Lawyer's Law, lawyers were deemed to
be functionaries of the state, and law firms were considered to be public
institutions under the Ministry of Justice.[103] Following adoption of these regulations, lawyers were formally
allowed to operate private law firms, a development heralding a significant
change from the approach of the previous forty plus years. Also prior to the adoption of the Lawyer's
Law, Chinese legal community was not independent from the government; in a 1993
survey, 94% of Chinese lawyers respondents stated that the government had
interfered with their work.[104]
This ambivalence to the rule of law is evident in
the Constitution of the People's Republic of China. As amended, the Constitution endorses the principle of the rule
of law but with Chinese characteristics.
Article five of the Constitution states that "no laws or
administrative or local rules and regulations may contravene the
Constitution" and "no organization or individual is privileged to be
beyond the Constitution or the law."
However, that same article states that "all acts in violation of
the Constitution and the law must be investigated," but stops short of
declaring such acts unenforceable.
Article eleven states, "the state protects the lawful rights and
interests of the individual economy," but it continues, "the state guides, assists and supervises the individual economy by administrative control" [emphasis added]. Article thirty-three provides, "all
citizens of the People's Republic of China are equal before the law. Every
citizen is entitled to the rights and at the same time must perform the duties prescribed by the Constitution and the
law" [emphasis added]. Article 126
of the Constitution states that "the people's courts exercise judicial
power independently, in accordance with the provisions of the law, and are not
subject to interference by any administrative organ, public organization or
individual." However, Article 128
states, "People's courts at higher levels supervise the administration of
justice by those at lower levels...Local people's courts at various levels are
responsible to the organs of the state power which created them." These ambiguities in the Constitution
purports both to subject the Party to the rule of law and to elevate the Party
to a privileged constitutional position.[105]
Despite the above-mentioned ambiguity, the Chinese
government has expressed its commitment to the rule of law through WTO
accession and beyond. In his Report on
the Work of the Government, delivered at the 5th Session of the 9th
National People's Congress on March 5, 2002, Premier Zhu Rongji stated:
This year we need to concentrate on increasing our
international competitiveness and fulfilling the following tasks on the basis
of what has been achieved. First, following the principles of the uniformity of
law, nondiscrimination, and openness and transparency, we need to quickly
improve the system of foreign- related economic laws and statutes so that they
are suitable to domestic conditions and the WTO rules and able to guarantee
fair and efficient law enforcement… Fourth, we need to study and publicize
information about the WTO and its rules, and we need to provide training to
public servants, especially leading cadres at and above county and division
level and to managerial staff in large and medium-sized enterprises by stages
and in groups. We need to bring forth, through training, a contingent of people
who are well acquainted with the WTO rules and international economic
cooperation and trade…We should conscientiously implement the basic principle
of "running the country according to law", perform official duties
lawfully and managing the government by high standards...We should deepen
reform, reduce the scope of administrative examination and approval, standardize
and simplify necessary approval procedures, stress openness and transparency,
and clearly define responsibilities.[106]
Despite these achievements, significant issues in
establishing the rule of law remain.
The Chinese practice of guanxi
(personal connections) for example, undermines confidence in China's legal
system. A byproduct of guanxi, gaoganzidi (nepotism), allows senior cadres and their children
unique business opportunities and preferential treatment by China's judicial
system.[107] While the above outlines the progress of China's government and
the Communist Party towards acceptance of the rule of law concept, the
Communist Party has never made an explicit statement that it will not interfere
in the Chinese judicial system. Indeed,
Li Peng, current chairman of the Standing Committee of the National People's
Congress, has urged the local and national legislatures to support the
leadership of the Communist Party.[108] Li's statements mirror earlier statements by Jiang Zemin, who
stated that four principles should guide China's future development: (1)
adherence to the socialist road; (2) the people's democratic dictatorship; (3)
Marxism-Leninism and Mao Zedong Thought; and (4) the leading role of the
Communist Party.[109] The quantity and quality of lawyers and judges, and social
perception thereof, remain significant obstacles to the development of a
genuine rule of law system in China.
Foreign investors and Chinese citizens alike have
reservations about the ability of the judicial system to follow written law without
the influence of politics.[110] As China continues internally to pursue change, WTO membership
can, and over time should, have a positive effect on the development of the
rule of law in China. However, those
judging progress should maintain realistic perspectives on such development.
In acceding to the WTO, China made significant rule
of law commitments. In becoming a WTO
member, China agreed to and affirmed Article X of the General Agreement on
Tariffs and Trade 1947 ("GATT"):
Publication and Administration of Trade Regulations
1. Laws,
regulations, judicial decisions and administrative rulings of general
application, made effective by any contracting party, pertaining to the
classification or the valuation of products for customs purposes, or to rates
of duty, taxes or other charges, or to requirements, restrictions or
prohibitions on imports or exports or on the transfer of payments therefor, or
affecting their sale, distribution, transportation, insurance, warehousing
inspection, exhibition, processing, mixing or other use, shall be published
promptly in such a manner as to enable governments and traders to become
acquainted with them. Agreements
affecting international trade policy which are in force between the government
or a governmental agency of any contracting party and the government or
governmental agency of any other contracting party shall also be
published. The provisions of this
paragraph shall not require any contracting party to disclose confidential
information which would impede law enforcement or otherwise be contrary to the
public interest or would prejudice the legitimate commercial interests of
particular enterprises, public or private.
2. No
measure of general application taken by any contracting party effecting an
advance in a rate of duty or other charge on imports under an established and
uniform practice, or imposing a new or more burdensome requirement, restriction
or prohibition on imports, or on the transfer of payments therefor, shall be
enforced before such measure has been officially published.
3. (a) Each contracting party shall administer
in a uniform, impartial and reasonable manner all its laws, regulations,
decisions and rulings of the kind described in paragraph 1 of this Article.
(b) Each contracting party shall maintain,
or institute as soon as practicable, judicial, arbitral or administrative
tribunals or procedures for the purpose, inter alia, of the prompt review and
correction of administrative action relating to customs matters. Such tribunals or procedures shall be
independent of the agencies entrusted with administrative enforcement and their
decisions shall be implemented by, and shall govern the practice of, such agencies
unless an appeal is lodged with a court or tribunal of superior jurisdiction
within the time prescribed for appeals to be lodged by importers; Provided that the central administration of
such agency may take steps to obtain a review of the matter in another
proceeding if there is good cause to believe that the decision is inconsistent
with established principles of law or the actual facts.
(c) The provisions of sub-paragraph (b) of
this paragraph shall not require the elimination or substitution of procedures
in force in the territory of a contracting party on the date of this Agreement
which in fact provide for an objective and impartial review of administrative
action even though such procedures are not fully or formally independent of the
agencies entrusted with administrative enforcement. Any contracting party employing such procedures shall, upon
request, furnish the Contracting Parties with full information thereon in order
that they may determine whether such procedures conform to the requirements of
this sub-paragraph.[111]
Further, China agreed to
and affirmed GATT Article XXIV which, in relevant part states, "Each
contracting party shall take such reasonable measures as may be available to it
to ensure observance of the provisions of this Agreement by the regional and
local governments and authorities within its territories."[112]
In addition to affirming GATT Articles X and XXIV, China made significant
rule of law commitments in its Accession Protocol. It is against these combined commitments that China's progress in
the rule of law field will be judged:
Part I General Provisions
…
2. Administration
of the Trade Regime
(A) Uniform
Administration
1. The
provisions of the WTO Agreement and this Protocol shall apply to the entire
customs territory of China, including border trade regions and minority
autonomous areas, Special Economic Zones, open coastal cities, economic and
technical development zones and other areas where special regimes for tariffs,
taxes and regulations are established (collectively referred to as
"special economic areas").
2. China
shall apply and administer in a uniform, impartial and reasonable manner all
its laws, regulations and other measures of the central government as well as
local regulations, rules and other measures issued or applied at the
sub-national level (collectively referred to as "laws, regulations and
other measures") pertaining to or affecting trade in goods, services,
trade-related aspects of intellectual property rights ("TRIPS") or
the control of foreign exchange.
3. China's
local regulations, rules and other measures of local governments at the
sub-national level shall conform to the obligations undertaken in the WTO
Agreement and this Protocol.
4. China
shall establish a mechanism under which individuals and enterprises can bring
to the attention of the national authorities cases of non-uniform application
of the trade regime.
…
(C) Transparency
1. China
undertakes that only those laws, regulations and other measures pertaining to
or affecting trade in goods, services, TRIPS or the control of foreign exchange
that are published and readily available to other WTO Members, individuals and
enterprises, shall be enforced. In
addition, China shall make available to WTO Members, upon request, all laws,
regulations and other measures pertaining to or affecting trade in goods,
services, TRIPS or the control of foreign exchange before such measures are
implemented or enforced. In emergency
situations, laws, regulations and other measures shall be made available at the
latest when they are implemented or enforced.
2. China
shall establish or designate an official journal dedicated to the publication
of all laws, regulations and other measures pertaining to or affecting trade in
goods, services, TRIPS or the control of foreign exchange and, after
publication of its laws, regulations or other measures in such journal, shall
provide a reasonable period for comment to the appropriate authorities before
such measures are implemented, except for those laws, regulations and other
measures involving national security, specific measures setting foreign
exchange rates or monetary policy and other measures the publication of which
would impede law enforcement. China
shall publish this journal on a regular basis and make copies of all issues of
this journal readily available to individuals and enterprises.
3. China
shall establish or designate an enquiry point where, upon request of any
individual, enterprise or WTO Member all information relating to the measures
required to be published under paragraph 2(C)1 of this Protocol may be
obtained. Replies to requests for
information shall generally be provided within 30 days after receipt of a
request. In exceptional cases, replies
may be provided within 45 days after receipt of a request. Notice of the delay and the reasons therefor
shall be provided in writing to the interested party. Replies to WTO Members shall be complete and shall represent the
authoritative view of the Chinese government.
Accurate and reliable information shall be provided to individuals and
enterprises.
(D) Judicial
Review
1. China
shall establish, or designate, and maintain tribunals, contact points and
procedures for the prompt review of all administrative actions relating to the
implementation of laws, regulations, judicial decisions and administrative
rulings of general application referred to in Article X:1 of the GATT 1994,
Article VI of the GATS and the relevant provisions of the TRIPS
Agreement. Such tribunals shall be
impartial and independent of the agency entrusted with administrative enforcement
and shall not have any substantial interest in the outcome of the matter.
2.
Review
procedures shall include the opportunity for appeal, without penalty, by
individuals or enterprises affected by any administrative action subject to
review. If the initial right of appeal
is to an administrative body, there shall in all cases be the opportunity to
choose to appeal the decision to a judicial body. Notice of the decision on appeal shall be given to the appellant
and the reasons for such decision shall be provided in writing. The appellant shall also be informed of any
right to further appeal.[113]
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[1] These written comments are the personal views of
certain leaders of the American Bar Association's China Law Committee: James Zimmerman, Ying White, Amy Sommers, Beatrice Schaffrath, and Michael Burke. These comments are not official
policy or comments of the American Bar Association, Section of International
Law and Practice or the China Law Committee. The views stated herein do not
reflect the view of, and should not be imputed to, the American Bar
Association, Section of International Law and Practice or the China Law
Committee. Further, the views stated
herein, do not reflect the view of, and should not be imputed to, any of the
above-mentioned individuals' employers, staff of such employer or clients of
such employer. Michael Burke, Vice
Chair of the China Law Committee, primarily drafted these written comments,
with input from the above-mentioned individuals.
[2] 67 Fed. Reg. 45,580 (July 9, 2002).
[3] Ministerial Conference of the World Trade
Organization, Accession of the People's
Republic of China, WT/L/432 (Nov. 11, 2001) [herein after Accession
Protocol].
[4] Stanley Lubman, Bird
in a Cage: Chinese Law Reform After Twenty Years, 20 Nw. J. Int'l L. & Bus. 383, 389
(Spring, 2001) [hereinafter Lubman].
[5] Id.
[6] Eric W. Orts, The
Rule of Law in China, 34 Vand. J.
Transnat'l L. 43, 64 (Jan. 2001) [hereinafter Orts].
[7] Lubman at 389.
[8] Id.
[9] Id.
[10] Orts at 65.
[11] See Eric
Eckholm, China Detains Leading Lawyer and
Keeps Him Incommunicado, N.Y. Times,
June 8, 2002, at A4.
[12] Id.
[13] See C.
David Lee, Legal Reform in China: A Role
for Nongovernmental Organizations, 25 Yale
J. Int'l L. 363, 400 (Summer 2000) [hereinafter Lee].
[14] Id.
[15] Id.
[16] See Albert
H.Y. Chen, Toward a Legal Enlightenment:
Discussions in Contemporary China on the Rule of Law, 17 UCLA Pac. Basin L.J. 125, 158 (Spring,
2000) [hereinafter Chen].
[17] Lubman at 388.
[18] Id. at 387.
[19] Id. at 388.
[20] Working Party on the Accession of China, Report of the Working Party on the Accession
of China, WT/ACC/CHN/49 (October 1, 2001) [hereinafter Working Party
Report], at ¶69.
[21] Id. Certain
members of the Working Party also raised concerns about whether China's central
government would be sufficiently informed about non-uniform practices and would
take necessary enforcement actions.
Those members stated that China should establish a mechanism by which
any concerned person could bring to the attention of the central government
cases of non-uniform application of the trade regime and receive prompt and
effective action to address situations in which non-uniform application was
established.
[22] Id. at
¶70. The PRC representative further
confirmed that all individuals and entities could bring to the attention of
central government authorities cases of non-uniform application of China's
trade regime, including its commitments under the WTO Agreement and the
Accession Protocol.
[23] Note, though, that empowering certain localities can
have beneficial effects. Chinese press
reports indicate that the national government has given the city of Shenzhen
permission to open up certain sectors to foreign investment two years earlier
than under China's WTO commitments. The sectors include securities, ports,
logistics, trade and procurement. Restrictions on foreign investment will
remain in seven areas, including publications and trading in grain and
processed oil.
[24] The WTO has stated that ensuring
"transparency" in international commercial treaties typically
involves three core requirements: (1)
to make information on relevant laws, regulations, and other policies publicly
available; (2) to notify interested
parties of relevant laws and regulations and changes to them; and (3) to ensure
that laws and regulations are administered in a uniform, impartial, and
reasonable manner. Transparency is important for two reasons in
particular. First, it provides vital
information to market participants about the conditions under which commercial
transactions can take place, and in this respect it makes markets function more
efficiently. Second, it underwrites the
effectiveness and integrity of a treaty's policy rules and disciplines, by
allowing a treaty participant to monitor whether other participants are meeting
their legal obligations. Effective transparency
typically requires that information be provided both on laws and regulations
and on procedures for their administration.
The underlying premise is that the way rules are applied can be as
significant as the substance of the rules themselves. See Working Group on the Relationship Between
Trade and Investment, Transparency, WT/WGTI/W/109 (March 27, 2002).
[25] Transparency of regulations and other measures,
particularly of sub-national authorities, was essential since these authorities
often provided the details on how the more general laws, regulations and other
measures of the central government would be implemented and often differed
among various jurisdictions. Those
members emphasized the need to receive such information in a timely fashion so
that governments and traders could be prepared to comply with such provisions
and could exercise their rights in respect of implementation and enforcement of
such measures. Working Party Report at
¶70.
[26] Those members noted the development of the Internet
and other means to ensure that information from all government bodies at all
levels could be assembled in one place and made readily available. The creation and maintenance of a single,
authoritative journal and enquiry point would greatly facilitate dissemination
of information and help promote compliance. Id.
[27] These publications include Almanac of Foreign
Economic Relations and Trade and The Bulletin of MOFTEC published by MOFTEC;
Statistical Yearbook of China, published by the State Statistical Bureau; and
China's Customs Statistics (Quarterly), edited and published by Customs. Id.
[28] Such laws, regulations and rules are available in the
Gazette of the State Council; the Collection of the Laws and Regulations of the
People's Republic of China and the MOFTEC Gazette. The administrative regulations and directives relating to foreign
trade were also published on MOFTEC's official website
(http://www.moftec.gov.cn) and in periodicals.
Information on foreign exchange measures was published by the SAFE and was
available on SAFE's website (http://www.safe.gov.cn) and via the news
media. The Chinese representative also
noted that information on China's customs laws and regulations, import and
export duty rates, and customs procedures was published in the "Gazette of
the State Council" and in the press media, and was available upon
request. The procedures concerning
application of duty rates, customs value and duty determination, drawback and
duty recovery, as well as the procedures concerning duty exemptions and
reduction, were also published. Customs
also published monthly customs statistics calculated according to country of
origin and final destination, on the basis of eight-digit HS levels. The
representative of China noted that any bilateral trade agreements concluded
between China and its trading partners, and protocols on the exchange of goods
negotiated under them were published in The Treaty Series of the PRC. He also noted that the Directory of China's
Foreign Economic Relations and Trade Enterprises and China's Foreign Trade
Corporations and Organizations were two publications which identified foreign
trade corporations and other enterprises in China engaged in foreign
trade. The representative of China stated
that the full listing of official journals was as follows: Gazette of the
Standing Committee of the National People's Congress of the People's Republic
of China; Gazette of the State Council of the People's Republic of China;
Collection of the Laws of the People's Republic of China; Collection of the
Laws and Regulations of the People's Republic of China; Gazette of MOFTEC of
the People's Republic of China; Proclamation of the People's Bank of the
People's Republic of China; and
Proclamation of the Ministry of Finance of the People's Republic of China. The
representative of China confirmed that
publication of all laws, regulations and other measures pertaining to or
affecting trade in goods, services, TRIPS or the control of foreign exchange
would include the effective date of these measures. Id.
[29] The representative
of China confirmed that none of the information required by the
WTO Agreement or the Draft Protocol to be disclosed would be withheld as
confidential information except for those reasons identified in Section 2(C) of
the Draft Protocol or unless it would demonstrably prejudice the legitimate
commercial interests of particular enterprises, public or private. Id.
[30] The information would include the names of national
or sub-national authorities (including contact points) responsible for
implementing a particular measure. Id.
[31] Lubman at 389.
This issue was raised by the Working Party on China's WTO
accession. In response to raised
concerns, the PRC representative stated that in accordance with the
Constitution and the Law on Legislation of the People's Republic of China, the
National People's Congress was the highest organ of state power. Its permanent body was its Standing
Committee. The National People's
Congress and its Standing Committee exercised the legislative power of the State. They had the power to formulate the
Constitution and laws. The State
Council was the executive body of the highest organ of state power. The State Council, in accordance with the
Constitution and relevant laws, was entrusted with the power to formulate
administrative regulations. The
ministries, commissions and other competent departments (collectively referred
to as "departments'') of the State Council could issue departmental rules
within the jurisdiction of their respective departments and in accordance with
the laws and administrative regulations.
The provincial people's congresses and their standing committees could
adopt local regulations. The provincial
governments had the power to make local government rules. The National People's Congress and its
Standing Committee had the power to annul the administrative regulations that
contradicted the Constitution and laws as well as the local regulations that
contradicted the Constitution, laws and administrative regulations. The State Council had the power to annul
departmental rules and local government rules that were inconsistent with the
Constitution, laws or administrative regulations. These features of the Chinese legal system would ensure an
effective and uniform implementation of the obligations after China's
accession. The PRC representative
stated that, according to the Constitution and the Law on the Procedures of
Conclusion of Treaties, the WTO Agreement fell within the category of
"important international agreements" subject to the ratification by
the Standing Committee of the National People's Congress. China would ensure that its laws and
regulations pertaining to or affecting trade were in conformity with the WTO
Agreement and with its commitments so as to fully perform its international
obligations. For this purpose, China
had commenced a plan to systematically revise its relevant domestic laws. Therefore, China would implement the WTO
Agreement in an effective and uniform manner through revising its existing
domestic laws and enacting new ones fully in compliance with the WTO
Agreement. The representative of China
confirmed that administrative regulations, departmental rules and other central
government measures would be promulgated in a timely manner so that China's
commitments would be fully implemented within the relevant time frames. If administrative regulations, departmental
rules or other measures were not in place within such time frames, authorities
would still honor China's obligations under the WTO Agreement and Accession
Protocol. The representative of China
further confirmed that the central government would undertake in a timely
manner to revise or annul administrative regulations or departmental rules if
they were inconsistent with China's obligations under the WTO Agreement and
Accession Protocol. See Working Party Report at ¶ 66-68.
[32] Despite this large number, the State Council, over
the last five years, has reduced the number of subordinate departments by 25%
and reduced payroll in those departments by 50%. Provincial-level departments were reduced by 50% and local
bureaucracy was reduced by 20% over the same period. China Succeeds in
Government Institution Reform, China Daily (June 20, 2002) at http://www.chinadaily.com.cn/highlights/16_party/achievements/620.htm.
[33] Note, though that when the National People's Congress
is not in session, the Standing Committee may amend and supplement national law
enacted by the National People's Congress, provided that any amendment or
supplement may not contravene the basic principles of such national law.
[34] Lubman at 389.
[35] Id. at 390.
[36] Id. at 391.
[37] Id.
[38] See Daniel H. Rosen, Behind the Open Door: Foreign
Enterprises in the Chinese Marketplace (1999) [hereinafter Rosen].
[39] Id.
[40] Chen at 156.
[41] Id.
[42] See Selection
Process for Officials to be Improved, China Daily (July 23, 2002), at
http://www.chinadaily.com.cn/highlights/16_party/news/723.htm.
[43] See Rosen.
[44] On December 26, China's MOFTEC posted its official
Chinese language translation of China's WTO accession documents online at
http://www.moftec.gov.cn.
[45] James M.
Zimmerman, China Law Deskbook: A Legal Guide for Foreign-Invested Enterprises
36-37 (1999) [hereinafter Zimmerman].
[46] Specifically, these Working Party members asked that
the jurisdiction of such review include the implementation of laws,
regulations, judicial decisions and administrative rulings of general
application referred to in Article X:1 of the GATT 1994, including administrative
actions relating to import or export licenses, non-tariff measures and
tariff-rate quota administration, conformity assessment procedures and other
measures. These members sought explicit
confirmation that certain types of measures, such as decisions relating to
standards and chemical registration, would be subject to judicial review. Some members of the Working Party also
stated that the administrative actions subject to review should also include
any actions required to be reviewed under the relevant provisions of the TRIPS
Agreement and the GATS.
[47] Oliver Burkeman, Engine
Trouble, The Guardian, September
5, 2002, available at http://www.guardian.co.uk/internetnews/story/0,7369,786231,00.html.
[48] Lubman at 390.
[49] Draft Law Cuts
Through State Red Tape, China Daily (Aug. 26, 2002) at http://www1.chinadaily.com.cn/cndy/2002-08-26/83502.html.
[50] However, this law seemingly applies only to
national-level entities such at the National People's Congress and State
Council. See Sylvia Ostry, China and
the WTO: The Transparency Issue, 3 UCLA
J. Int'l L. & For. Aff. 1, 13 (Spring, 1998).
[51] Lubman at 389.
Interestingly, it appears as though most plaintiffs are located in
developed areas of China, such as Beijing, Shanghai, and Guangdong
province. See More and More Common People Take Legal Action Against Government,
Xinhua General News Service (March 13, 2002), LEXIS, News and Business Library,
Major World Publications File.
[52] Id. at 393.
[53] Id.
[54] See China's
Chief Justice Delivers Supreme Court Work Report, BBC Monitoring
International Reports (March 24, 2002), LEXIS, News and Business Library, Major
World Publications File.
[55] See Rosen.
[56] Orts at 65.
[57] Id.
[58] Id.
[59] See China
Daily HK Edition, Shanghai (August 13, 2002), at http://www1.chinadaily.com.cn/hk/2002-08-13/81909.html. A judge indicated that most of the minor
civil cases should be settled in one day, as opposed to the average settlement
time of fifty days.
[60] Scrutiny Law
Leads Congress Agenda, China Daily (August 24, 2002) at http://www1.chinadaily.com.cn/cndy/2002-08-24/83437.html.
[61] The Supreme People's Court is implementing the
Programme for Promoting Professional Ethics Among Citizens by drafting the
Basic Code for the Professional and Ethical Conduct for Judges. Pursuant to the Basic Code, judges are to
uphold impartiality, honesty, discharge their duties in a transparent,
efficient, and professional manner. The
Basic Code creates a largely self-regulatory regime. Note, further, that there is no mandatory recusal for judges who
have an interest in a case before them; recusal in this context is
voluntary. See China's Chief Justice Delivers Supreme Court Work Report, BBC
Monitoring International Reports (March 24, 2002), LEXIS, News and Business
Library, Major World Publications File.
[62] Note that the Supreme People's Court has enacted
Regulations Governing Evidence in Civil Cases that specify procedures and
timelines for evidence used in civil cases.
Despite these reforms, flexible evidentiary standards remain an issue. Id.
[63] Orts at 70.
[64] Id. at 71.
[65] See China
Daily HK Edition, Other Regions (August 22, 2002), at http://www1.chinadaily.com.cn/hk/2002-08-22/83141.html.
[66] China Vows to
Improve Calibre of 'Incompetent' Judges, Agence France Presse (July 8,
2002), LEXIS, News and Business Library, Major World Publications File.
[67] See Thomas
Carothers, The Rule of Law Revival,
77 For Aff. 2 (1998).
[68] See Id.
[69] See Id.
[70] See Lars P.
Feld and Stefan Voigt, Economic Growth
and Judicial Independence: Cross Country Evidence Using a New Set of Indicators,
available at http://www1.worldbank.org/publicsector/legal/ecogrowth.pdf.
[71] Id.
[72] Kenneth
Lieberthal, Governing China 150-151 (1995) [hereinafter Lieberthal].
[73] Orts at 45.
[74] William P. Alford, Exporting "The Pursuit of Happiness" 113 Harv. L. Rev. 1677, 1682 (2000) (book
review).
[75] Zimmerman at 44.
[76] Complementing this process, each relevant ministry or
bureau conducted an industry-specific legal review that included industry
input. In addition to this review, the
State Council and the central government ministries promulgated and amended
dozens of laws and regulations incorporating China's WTO commitments into
Chinese law. One estimate places the number of new or revised laws and
regulations at over seventy. Examples
of these laws and regulation include regulations governing foreign investment
in telecommunications and insurance services and new regulations on foreign
investment in banking services, road transportation and international freight
agency services. Regulations on
countervailing duties and antidumping have also been revised.
[77] The Accession Protocol does not require China to
agree to enact rules to govern administrative procedure or the standards of
evidence that must underlie the decisions of administrative agencies, nor does
it address the deficiencies in existing legislation that prevent challenges to the
rules on which agencies base their decisions or to the exercise of discretion
by agencies.
[78] Zimmerman at 8-10.
From the Han Dynasty (206 B.C.-220 A.D.) to the collapse of the Qing
Dynasty in 1911, Confucian ideals were required curricula for government
officials. Confucian ideals, despite
official denials, remain influential in today's China. Id.
[79] Id. at
10-11. Daoism proposes that the role of
government is to be a guide to "the way" (dao) rather than to govern.
Id.
[80] Id. at
11-12. Legalism views the law as a way
to strengthen state rule over groups and individuals; a ruler, to Legalists,
could not rule effectively without a system of laws. Id.
[81] Orts at 54.
[82] Id. at 55.
[83] See Jonathan D. Spence, The Search for Modern
China (2d. Ed.) 123-128 (1999) [hereinafter Spence].
[84] Most disputes were referred to mediators who were
either respected members of a local community or leaders of influential lineage
organizations. This judicial structure was reinforced by a community mutual
responsibility system, the baojia. Under this system, all Chinese households
were registered in groups and supervised by a chosen member of the group. This leader's responsibilities included
ensuring local law and order. Id. at
123-128.
[85] Id.
[86] Id.
[87] Id.
[88] See also
Orts at 57.
[89] Zimmerman at 22-24.
[90] Id.
[91] Orts at 59.
[92] Orts at 44.
[93] Id.
[94] The General Principles attempt to endorse the concept
of the rule of law. Article 5 states that "the
lawful civil rights and interests of citizens and legal persons shall be
protected by law; no organization or individual may infringe upon
them." Interestingly, Article 6 states that "civil
activities must be in compliance with the law; where there are no relevant
provisions in the law, they shall be in compliance with state policies."
[95] These campaigns have continued, but to questionable
effect. A recent "Legal System
Promotion Day" took place on December 4, 2001. A purpose of Law Promotion Day was to educate China's public on
the judicial system, and on the rule of law.
As part of this effort, the central government has created a popular
television program "Let's Talk About Law Today" that uses real cases
to illustrate China's laws. The Chinese
public seems skeptical about the value and sincerity of such efforts. See
Chinese Residents Rush to Capital to Seek Justice, Agence France Presse
(Dec. 4, 2001), LEXIS, News and Business Library, Major World Publications
File.
[96] Zimmerman at 22-24.
[97] See Spence
at 671.
[98] Id.
[99] Adopted on November 14, 1993 by the 3rd
Plenary Session of the 14th Central Committee of the Chinese
Communist Party, reprinted in
Lieberthal at 419-440.
[100] Id.
[101] Id.
[102] Law of the People's Republic of China on Lawyers
(adopted May 15, 1996 by the 19th Sess. of the Standing Committee of
the 8th National People's Congress), reprinted in China Laws for Foreign Business (CCH), Business
Regulation, ¶16-650.
[103] See
Provisional Regulations of the People's Republic of China on Lawyers (adopted
August 26, 1980 by the 15th Sess. of the 5th National
People's Congress), reprinted in China
Laws for Foreign Business (CCH), Business Regulation, ¶19-450.
[104] Zimmerman at 42.
[105] Orts at 69.
[106] Report on the Work of the Government (delivered at
the 5th Session of the 9th National People's Congress,
March 5, 2002) available at http://www1.chinadaily.com.cn/highlights/docs/2002-03-18/61384.html. The next day, Zeng Peiyan, Minister in
Charge of the State Development Planning Commission stated, in the Report on
the Implementation of the 2001 Plan for National Economic and Social
Development and on the Draft 2002 Plan for National Economic and Social
Development (available at http://www1.chinadaily.com.cn/news/cb/2002-03-18/61383.html),
"The basic role of the market in the allocation of resources should be
fully exploited. The law governing economic development should be followed.
International practice will be taken into consideration. The way government
functions will be changed and the macro-regulation will be improved to create a
sound environment for economic development.
Speeding up efforts to develop the legal system. Legislative plans of
the National People's Congress will be conscientiously implemented in drafting
laws. The Insurance Law will be amended as soon as possible. An Anti-Monopoly
Law will be drafted. A Law on the Prevention and Control of Radioactive
Pollution will be submitted to the National People's Congress for examination
and approval. We will formulate or revise related administrative statutes,
rules and regulations as soon as possible and review local government statutes,
rules and regulations and other regulation-related documents, taking into
consideration the requirements for developing the socialist market economy, the
rules of the World Trade Organization and our commitments to that organization.
We will continue to draw up administrative statutes and regulations to rectify
and standardize market order. All authorities should follow the law in carrying
out their administrative duties and perform their functions strictly within the
jurisdiction and according to the procedures specified in laws and
regulations."
[107] Zimmerman at 44.
[108] Li Peng: NPC
Must Adhere to Communist Party Leadership, China Daily (July 10, 2002) at http://www.chinadaily.com.cn/highlights/16_party/news/710.htm. Despite these statements, Li has, at times,
promoted the concept of the rule of law for limited issues. See
China's Assembly Chief Stresses Rule of Law, BBC Monitoring International
Reports (Feb. 28, 2002), LEXIS, News and Business Library, Major World
Publications File.
[109] President Jiang
Makes Important Speech in Party School, China Daily (May 31, 2002) at
http://www.chinadaily.com.cn/highlights/16_party/theory/s0531.html.
[110] Zimmerman at 44.
[111] General Agreement on Tariffs and Trade, Oct. 30,
1947, 61 Stat. A-11, T.I.A.S. 1700, 55 U.N.T.S. 194, art. X.
[112] General Agreement on Tariffs and Trade, Oct. 30,
1947, 61 Stat. A-11, T.I.A.S. 1700, 55 U.N.T.S. 194, art. XXIV.
[113] Accession Protocol.
