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The China War on Laws

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china laws

Rather then embracing the rule of law and the predictability that comes with it, China has reversed a decades old trend in legal reform.

In the 1980’s and 1990’s there was an emphasis on law and courts and their continued improvement (12).

The Chinese knew that in order to be welcomed into the international arena, they would need laws. Gone were the days of Maoist rule isolation.

Since joining the WTO, however, China has declared war on the precepts of the ‘rule of law’. While the Chinese judiciary has forever served as a tool of the communist party, the party’s role in its affairs had diminished before the turn of the 21st century.

It was in 2001 that Chinese judges finally exchanged military uniforms for black robes (13), even if they were not yet experts at handling matters of the court. (Minzner relates a funny anecdote that in 2002, when gavels were introduced to Chinese courts, a sign accompanied them. The sign read “[t]he gavel should not be used to hit the plaintiffs or defendants (14).”

The Chinese Judiciary Farce

At that time, the Chinese judiciary may not have been professional, but they were attempting to focus on legal matters as much as possible and divorce themselves from party platitudes.

As early as 2002, this changed. It was during this time, amidst the run up to the Olympics, that China began to crack down on the ‘law’. The party condemned Western notions of law and justice and said that “…the supremacy of the law” or “deciding cases according to law” were excuses to avoid or oppose Party leadership in judging cases, particularly under the “corrosive influence of Western legal concepts.” (15)

The reason for the shift was that the communist party was afraid. The notion of rule of law with its impartial view of parties to a legal dispute do not sit well with those governing China.

It is much better to be able to pick and choose when and how to apply the law and to govern it rather than be governed by it.

To a certain extent this makes sense, especially if the claim that 94% of all members of the communist party are corrupt is correct.

In a system that loses up to 16% of her GDP via bribes, the notion of a just legal system must strike fear in the hearts of many.

china laws

Reversing the Rule of Law

As for Bo Xilai, he serves as a good example of how deep and prevalent the corruption runs. While only garnering an income of U$19,000 per year, his official net worth was over U$120 million, and unofficially he was worth at least one billion dollars.

How is it that in a rule of law country, that a man with such modest earnings could amass such a great amount of wealth? And if the extent of Mr Bo’s corruption was so rampant, then why was he not prosecuted until he had angered the communist party?

The problem is that laws equate to transparency and in the Olympic run up, there was too much money to be made. The party, in a concerted effort to abscond as much cash as possible and subdue the masses, launched a campaign to thwart the rule of law.

Consequently, the party launched the ‘socialist rule of law theory campaign’ in 2006. Its aim, in part, was to instill a sense of party doctrine that would supersede the rule of law. Courts and the legal system was guided to eschew western law precepts, read as rule-of-law, and focus on populist sentiment and communist dictates rather than the Chinese constitution and what it stood for.

And to ensure that the communist legacy of control would not soon diminish, the communist party mandated that all law students attended mandatory classes on the ‘socialist rule of law’, a concept that is mutually exclusive with an objective and impartial legal system.

What the communists had done was reversed the course of their legal system, furthering entrenching their hold on the masses.

china laws

The Impact of China’s Malleable Laws

Elizabeth Economy said the events that have unfolded since Bo was accused of corruption…

“have unmasked what people in and outside China have long discussed: the truly extraordinary level of corruption that pervades the country’s political system and the belief of some Chinese officials that the law does not apply to them… What makes this frightening for China’s leaders, of course, is that it de-legitimizes the party.” (16)

The problem of China’s misapplication and lack of respect for laws is that it has taught her citizens to act in kind. The notion that no one is or should be above the law is a foreign concept indeed.

As a matter of fact, for those of us who have worked here, it can be astonishing to see how little regard there is for law.

Having worked across Latin America, including stints in Brazil, Paraguay and Mexico, I had witnessed my fair share of ‘legal flexibility’, as it were, but nothing could prepare me for China.

According to the World Justice Project Report, China received the third lowest global score in terms of respecting fundamental rights and was the worst in the region. It was also in the lower quartile in regulatory enforcement (17). Mexico, in comparison, scored markedly higher in both measurements (18).

These facts, however, only tell part of the story. A major problem is that as China exerts influence outside of her own borders, many Chinese bring those mores and norms with them. Consequently, they can find it difficult to operate within the confines of a functioning legal system.

china laws

An Example of China’s Failed Legal System

The following example may help to clarify. Yesterday, I was speaking to a colleague about the case of Peng Tang, a 21 year old student from China who is studying at the University of Iowa and has been charged with first-degree kidnap and rape.

The distinguishing issue about the case is the fact that once Mr Tang’s parents heard of his troubles, they flew to the US and reportedly attempted to bribe the victim. (His parents are now being held in the county jail for their actions.)

I was discussing the case with Ester, a Chinese colleague. When I emphasized what Mr Tang’s parents had done, Ester looked at me as if to say ‘so what?’

“What is the problem with that?” She asked.

At first I was too astounded to speak. My initial response was, “Well, it’s illegal for one thing.”

“But this is typical in China.” she countered. “What is the problem? It is easier to settle things in this manner. It’s a matter of saving face and money.”

I listened on.

“The parents know that if the case goes to court then the bribes they have to pay will be higher. It is much easier to settle things between the people instead.”

I explained that such an act is probably considered morally repugnant and is not how such things are usually handled in the US. She laughed it off claiming that it is too difficult to get justice with Chinese police and judges and that the Chinese fashion is more efficient.

While one cannot judge a people based on the comments of one of their citizens, it is possible to draw conclusions from trends and experience. I have previously written about the issue of fraud and China-based stocks sold in the US (19), so I will not belabor the point here. But it is worth noting that of the 188 SEC class action securities lawsuits in 2011, 33 involved US-listed Chinese companies (20).

Much of the problem with such companies revolves around fraudulent reporting of everything from sales to assets. Plainly stated, many Chinese companies do not feel the legal obligation to truthfully report to their shareholders. This is a direct consequence of the fact that in their home countries justice can and is bought and sold.

One of the most dramatic examples of the rule of law as the Chinese see it, can be exemplified by the case of Li Qiming. Mr Li was a 22 year old student who, while driving while intoxicated struck two female college students, fatally wounding one. When the campus police arrived to arrest Mr Li, he defiantly screamed at the crowd that had gathered, “Go ahead, sue me if you dare. My dad is Li Gang!”

Mr Li was the son of Li Gang, a communist party member and the deputy director of the local public security bureau. Mr Li’s words show the power the communist party members and their children can wield. When confronted with the fact he’d committed murder, Mr Li was sure that his father’s position would be sufficient to secure his freedom.

Mr Li’s attitude later appeared justified when he was merely sentenced to six years in jail and paid a fine, much to the chagrin of most Chinese.

The upshot of all of this is that we must truly understand China when doing business within her borders and within our own. China is a developing country whose reluctance to enforce the rule of law on a consistent basis can be problematic for both businesses and those dealing with people from China.

The reality can differ dramatically from what we are often told and due diligence is a must.

References & Image Credits:
(2) Lexis Nexis
(3) Interestingly enough, China is ranked highly in contract enforcement. The reasons for this ranking are many and beyond the scope of the current article.
(4) Wikipedia
(5) China Daily
(6) Carl F. Minzner, China’s Turn Against Law , Fordham Law School, American Journal of Comparative Law, 2011, Washington University in St. Louis Legal Studies Research Paper No. 11-03-01
(7) YouTube
(8) Want China Times
(9) Daily Mail
(10) Wikipedia
(11) Want China Times
(12) Carl F. Minzner, China’s Turn Against Law , Fordham Law School, American Journal of Comparative Law, 2011
Washington University in St. Louis Legal Studies Research Paper No. 11-03-01
(13) ibid
(14) ibid
(15) ibid
(16) Want China Times
(17)(18) World Justice Project
(19) Top Secret Writers
(20) RKMC
(21) The Epoch Times

Originally published on

  • Jennifer

    Tang’s parents were out of jail right now and county attorney quoted’Culture Difference’.

  • Anthony

    “Plainly stated, many Chinese companies do not feel the legal obligation to truthfully report to their shareholders.”

    Same goes for American companies too. And, I think we ought to focus on the injustice local to us rather than injustice overseas.

  • Ed

    Great reply. (sarcasm) What China does effects us as well. They sell stocks here, sell us products and sell us products. It is only logical that they need to be held to a level of lawfullness that is appropriate. Comparing Chinese corporate malfeasance to that of the US shows a level of ignorance about China.

  • Anthony

    “China needs to be held to a level of lawfullness that is appropriate”

    I hope you are kidding!

    First of all, learn to spell…

    Second, you sound like a wannabe dictator; the Chinese are free to do what they want in China, just as the Americans are free to do what they want in America.

    Third, have you not heard of the WTO, that is, the World Trade Organization? Seriously…

    Lastly, and I will make this one real simple for you: do not buy their stocks!
    On another note, what about JP Morgan and their bogus derivatives; why not worry about
    the lawfulness of their practices, an American company, whose
    consequences are much more direct…?

    Also, just because somebody will not voluntarily bend over for you at your request, does not make it okay to force your will upon them.

    Grow up, or rather wake up, and stop blaming other people or other nations for your own shit…

  • Ed

    Little Anthony, read a book. Just by claiming that the Chinese are free to do what they want in China, you show how ignorant you are. One of their Nobel Prize winers is in jail and the other is in exile, how free is that?
    As for the WTO research what China has done before commenting.
    The Internet is a dangerous thing in the hands of people like you. Take up sculpting please

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