LB Travels: Shenzhen, China (Part 2) | The civil law

6 mins

How do you create a legal system from scratch? This week, we take a final look at the Chinese legal system and the civil law more generally.

As you know from last week’s post, China’s legal history is a patchwork. Unlike Japan, which modernised its legal system based on Western civil law countries after 1868, China had never hit the “system update” button—that is, until recently.

The decimation of the legal profession during the Cultural Revolution continues to have long-lasting consequences. China is playing catch-up and the goalposts are moving very, very quickly. If you like legal certainty, you won’t find it in China (at the moment or, it seems, in the near future).

There is, as usual, so much to talk about. But because things are moving so fast, we can only discuss things generally. Think broad brush strokes.

We’ll kick off by looking at where the Chinese legal system sits in relation to everything else. Then we’ll take a peek at its substantive law, which is based on a civil law system.

Hardcore power

We don’t often stop to think about how political structures can influence laws, wield or circumvent them. Anyone who looks at the Chinese legal system is immediately aware of this stark reality. That is, unless you’ve been living under a rock (which I am certain is not the case).

The Chinese legal system hangs off its 1982 Constitution, known as the “mother law” (母法) and takes precedence over all other laws, known as “child laws” (子法). The 1982 Constitution has been amended five times to date. The most recent amendment was in 2018, to incorporate “Xi Jinping Thought on Socialism with Chinese Characteristics in a New Era”. You’ve probably figured by now that no description of anything is ever short. The 2018 amendment signified a major power shift to consolidate President Xi Jinping’s power, including the elimination of presidential term limits.

A basic premise is that no “child” law or legal interpretation by the Supreme People’s Court can violate the principles in the 1982 Constitution. Amongst other matters, the 1982 Constitution notes the concept of “socialist rule of law”, which is distinct from the concept of rule of law as understood in the Western tradition. In effect, it prevents the adoption of the Western conception of rule of law, insofar that it goes against the Party’s interests.

There is also, of course, no concept of separation of powers. Article 3 of the 1982 Constitution says that “the state organs of the People’s Republic of China apply the principle of democratic centralism”. To understand how the state organs or institutions in China operate—let’s say that only the second word in “democratic centralism” applies:

“China’s Constitution provides that all power is unified in the National People’s Congress (人民代表大会), which supervises the Supreme People’s Court, the Supreme People’s Procuratorate and the State Council (the executive). This basic structure has a number of consequences. It establishes separation of functions, but not separation of powers. Each agency is required to exercise their own powers and functions and not interfere in the exercise of functions by any other agency, unless authorised.”

— Yifan Wang, Sarah Biddulph and Andrew Godwin, “Briefing Paper: A Brief Introduction to the Chinese Judicial System and Court Hierarchy” (2017) Asian Law Center, Melbourne Law School.

One giant bureaucracy

At the national level, the National People’s Congress (NPC) is the supreme legislative state organ in the PRC. It can amend and enact basic laws such as criminal law, civil law, and laws relating to the organisation of state organs. The NPC can also amend the Constitution by a two-thirds majority. As of the last count in 2018, there are 2,980 members in the NPC.

The second-highest state organ is the NPC Standing Committee. It “may enact and amend all laws except those which may only be enacted by the NPC itself”. As of the last count in 2018, there are 175 members in the NPCSC.

In reality, the State Council (executive), comprising of 35 members is far more powerful than the NPC and NPC Standing Committee combined. Given this, some view the NPC and NPC Standing Committee as mere rubber-stamping institutions, with some exceptions.

Now we get around to talking about the courts. The 1982 Constitution describes the Supreme People’s Court as the “highest judicial organ”. In practice, it can issue judicial interpretations, but “does not have formal jurisdiction to interpret laws or to declare laws, rules or regulations invalid”. This job belongs to the NPC Standing Committee.

This system of bureaucracy is replicated at each of the five levels of the PRC, comprising of the:

  1. National / central level;
  2. Province;
  3. Prefecture;
  4. County;
  5. Townships and towns.

The power of Chinese courts is immensely diluted. Unlike the Western conception of an independent judiciary, courts in China are:

“… not so conceived of as having such a special or sacred position within the legal system, nor do they command such an esteemed status in society.”

— Prof. Albert Chen, “Sources of Law and the Law-making System”, p 123

There are oddities in how the judicial system operates. For one, while there is “no direct leadership relationship between superior courts and inferior courts, superior courts can order retrials of the cases judged by inferior courts even where the parties do not appeal to a higher court”. The thought of this alone is enough to make any Australian lawyer freak out.

Finally, political interference is a reality by “local Communist Party agencies, officials and local governments”. Courts are reluctant to touch issues which they have no confidence in resolving, as well as cases which involve “excessive rights-based litigation, public interest litigation and class actions”. The result is that the local or national government steps in. One example was the 2008 Sanlu tainted milk powder case, where baby milk formula tainted with melamine led to deaths and injuries:

“More than 100 lawyers volunteered to represent families in claims against Sanlu—but the government put pressure on them not to take cases, and courts also declined to hear individual suits. Instead, the government conducted a series of prosecutions.”

— Echo Huang, ”Ten years after China’s infant milk tragedy, parents still won’t trust their babies to local formula” (16 July 2018) Quartz

The civil law system

Aside from the grim institutional realities, China’s procedural and substantive law system operates on the civil law tradition of continental Europe.

A significant challenge of creating a legal system, virtually from scratch, is the vast effort involved in covering all areas of life. Compared to the common law system, the civil law can be quickly adopted by a country seeking a legal implant.

The civil law has its origins in Roman law—from the Latin words “jus civile”—enjoyed only by Roman citizens or “cives”. The Eastern Roman Emperor, Justinian I (482 – 565), sought to consolidate these laws in the form of the Corpus Juris Civilis which forms the basis for civil law systems today. In contrast to the common law system which we covered in our travels to Hong Kong, the civil law is defined by the following:

  • general principles of law are set out in a “code”;
  • judges start from general principles in the codified law, then apply them to the specific facts in the case before them;
  • judges are not bound by previous judicial decisions (known in the common law as precedent);
  • judges have an active role in collecting evidence (“inquisitorial” system)—as opposed to the common law system where the parties have this responsibility (“adversarial” system).

The Chinese courts operate in three areas: (1) criminal, (2) civil and (3) administrative. Procedural codes govern each of these areas.

As for the substantive law in China, this has been in constant flux as laws are rapidly passed and modified. One example is the General Principles of Civil Law (中华人民共和国民法通则) (GPCL), which is a basic enactment on civil law. Recently in 2017, the NPC passed the People’s Republic of China General Civil Law Rules (中华人民共和国民法总则) (GCLR), which appears to have caused some confusion. The reason? Apparently, the GCLR overlaps with the GPCL, but the earlier law hasn’t been repealed.

Peering into any one of the Chinese civil law codes is a mind-boggling exercise for any lawyer used to the common law—or any other civil law system for that matter. Policy and law are mixed in a way that would never otherwise happen elsewhere. For example, taking the PRC Contract Law:

Article 1
This Law is enacted with a view to protecting the lawful rights and interests of contracting parties, maintaining social and economic order and promoting socialist modernisation.

One criticism of Chinese laws is their broad and imprecise drafting. This means that varying interpretations are possible. In this way, “officials’ discretion can substitute the rule of law”. The following examples show you how broad the drafting is:

Article 3
Contracting parties are equal in their legal status, and no party may impose his own will upon the other party.

Article 5
The parties shall observe the principle of fairness in determining their respective rights and duties.

Article 6
The parties shall observe the principle of good faith in the exercise of their rights and performance of their duties.

As you can see, these laws can be interpreted in many different ways. Article 3, in particular, is a completely foreign concept to Australian lawyers. It suggests that the terms of a contract do not really govern the contractual relationship in some circumstances. What happens if there is a power imbalance, as often happens, between the contracting parties?

Flipping the coin, some of the drafting deals with details that seem almost basic:

Article 13
The parties conclude the contract by means of offer and acceptance.

Other articles in the PRC Contract Law deal with the minutiae of specific types of contracts, such as:

  • Contracts of sale;
  • Contracts for the supply and use of electricity, water, gas and heat;
  • Gift contracts;
  • Loan contracts;
  • Lease contracts;
  • Financial leasing contracts;
  • Contracts for work;
  • Construction project contracts;
  • Contracts of carriage;
  • Technology contracts;
  • and on it goes.

We could go on, but hopefully, you have a sense of how the Chinese legal system operates or flounders. At this point, it really is a case of “watch this space”.

Image credit // yifei chen

Further reading:

  • Albert Chen, An Introduction to the Legal System of the People’s Republic of China (2011, 4th ed) LexisNexis Butterworths. (Note that as of March 2019, the 5th edition is available).
  • Yifan Wang, Sarah Biddulph and Andrew Godwin, “Briefing Paper: A Brief Introduction to the Chinese Judicial System and Court Hierarchy” (2017) Asian Law Center, Melbourne Law School – link here.
  • PKU Law – a site containing translated versions of Chinese law created and maintained by Chinalawinfo Co. Ltd, and the Legal Information Center of Peking University – link here (membership required).
  • Joseph Dainow, “The Civil Law and the Common Law: Some Points of Comparison” (1966) 15(3) The American Journal of Comparative Law 419 – link here.