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Copyright © International Chamber of Commerce (ICC). All rights reserved. ( Source of the document: ICC Digital Library )
by Daniel Arthur LAPRÈS and LEI Kai
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At the time of the launching of the reform movement in 1978, the legal apparatus had withered to the point of disappearance. Since then, a private sector and market forces have arisen, grounded in legal reforms intended to protect property, reward initiative, allocate risks, organize venues and rules for the settlement of disputes and means for the execution of civil judgments.
The reform and openness policies have had profound implications for legal concepts, policy and administration in China.
In this respect, 1982 was a watershed year, with the adoption of a new Constitution confirming the accommodation of the market within Chinese socialism.
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The People’s Republic, founded in 1949, is a unitary state in which constitutional authority flows throughout the nation from the National People’s Congress (NPC) and from its Standing Committee.1
In accordance with the first of the cardinal principles of the reform movement, the leadership of the State is assured by the Communist Party. The Party now has more than 70 million members in some 3.5 million grassroots organizations.2 The main decision-making body of the Party is the Central Committee.3 The Central Committee is elected every five years. It meets in Plenary Session about twice a year. In the interim, power is exercized by the Political Bureau of 15 to 25 members. The Standing Committee of the Political Bureau is comprized of five to nine members.
One of the most significant reforms that were accomplished over the course of the 1980s involved the separation of the functions of the Party from those of government. While the Party concentrated on ideological leadership, day-to-day economic management and administration were gradually vested in the government. More recently, and in particular in conjunction with China’s entry into the World Trade Organization, the authorities have undertaken the further separation of government from the management of industrial, commercial and other economic activities.
In the constitutional text, authority runs from the NPC through several lines: the executive branch of government led by the State Council, the judicial branch led by the Supreme People’s Court, the office of the Procuratorate, and the Central Military Commission.
Under the State Council, there operates a variety of ministries, commissions, bureaus, authorities and enterprises.4 Some of these executive organs are conjugated down to the local level.
Below the central level of the State is the level identified as the provincial level, but which actually includes not only the provinces, but also the municipalities under direct administration of the central government, the autonomous regions and the SARs. China administers 22 provinces5 (and claims Taiwan as a 23rd province), four municipalities directly under the central government (Beijing, Tianjin, Shanghai and Chongqing), and five autonomous regions that have large concentrations of non-Han peoples: Xizang (Tibet), Xinjiang, Neimenggu (Inner Mongolia), Guangxi and Ningxia.
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The State Council
The State Council’s principal components are officially presented as including:
The ministries and commissions exercise independently specially designated administrative powers. They have authority to issue regulations and orders within their fields of competence.Organizations also exercise independent specially designated administration functions. They may issue regulations and measures within the limits of their authority.In addition, in the official organigram, the Commission of the State-owned Assets Supervision and Administration is in a class of its own, entitled: Special Organization directly under the State Council.Under the ministries and commissions, there are Administrations and Bureaus. They are in charge of specially designated affairs and exercise independent administrative functions within those limits.The administrative offices assist the Premier with special tasks. They do not have independent administrative functions. They are only responsible for investigation and analysis.
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As of July 1, 1997, an additional category of organization within the Chinese State arose, that is, the Special Administrative Region (SAR) of Hong Kong, which served as a model for the creation of the SAR of Macao in 1999. The Basic Laws governing each territory are grounded on the principle of “one country, two systems”, such as to accommodate within the PRC the capitalistic and liberal former colonies respectively of the United Kingdom and of Portugal.
Below the provincial level, State authority is exercized through one to three levels of administration.6
Alongside each people’s congress is an administrative organ that acts for both the central administration and the local authority. These local governments are responsible for administration of, among other matters, the local economy, education, science, culture, public health, urban and rural development, finance, civil affairs, public security, and judicial administration.
The autonomous regions also are governed by people’s congresses that have the same domains of competence as the people’s congresses at the provincial level, but enjoy autonomy within the limits of the Constitution and the laws of the NPC.
Despite the superior authority of laws and regulations emanating from the centre, because the provincial governments own economic enterprises and collect taxes, their dependence on the centre is less than total. Also, provincial and even local initiatives have often been tacitly encouraged by national authorities as experiments in anticipation of their extension, if successful, to more general levels.
The role of the courts in the traditional PRC system was very slight. But their importance has been increasing as parties learn the manner of pressing claims before the courts. With a view to developing a modern regime of administrative law, the NPC has given the courts the power to sanction and remedy abuses of administrative power. Also, the Supreme People’s Court issues interpretations of laws that serve as references for decision-making with legal consequences.7
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8
At the apex of the Chinese legal hierarchy of norms lies the Constitution.9 Norms that violate the Constitution are invalid. The Constitution is adopted and amended by the NPC. The current Constitution of the PRC was adopted on December 4, 1982. It was first amended on April 12, 1988, then on March 29, 1993, again on March 15, 1999 and most recently on March 14, 2004.
The Constitution of 1982 consecrates the principle of “from each according to his ability, to each according to his work”.10 Its article 13 admits the private ownership of certain items of private property. While land ownership remained vested in the State or collectives, the Constitution recognized the rights of individuals to own personal property and to carry on business activities in their own names.11 The rights and interests of foreigners were guaranteed the protection of the law.12
The 1982 Constitution was amended in 1988 expressly to admit the existence of a private sector as a complement to the public sector and in order to afford formal protection of the rights and interests associated with this sector. In the same amendment, land-use rights are recognized and provision is made for their transfer.
The Constitution was further amended in 1993 with the adoption of the “socialist market economy”. It created a premise for the corporatization of enterprises owned by the State while subject to independent management, and it instituted in rural areas the responsibility system, the main form of which is the household contract.
The 1999 amendment affirmed the pre-eminence of the rule of law and made official the tolerance of “diverse forms” of ownership and of distribution. In rural areas, the “dual operation system” was organized around households operating under contract. The “individual economy of urban and rural working people” was recognized as a complement to the socialist public economy and its lawful rights and interests enjoy the protection of law. The State assumes visà- vis the individual economy a role of “administrative control”.
The 2004 amendments extend the liberalization and privatization of the economy. Henceforth, the State is committed to paying compensation for land that is expropriated or requisitioned. Citizens’ lawful private property is declared inviolable. The State commits to establish a social security system compatible with the country’s level of economic development.
The Chinese courts do not review the constitutionality of laws or regulations.
Treaty commitments do not override the Constitution.
3.1. General principles
China is governed according to the principle of democratic centralism13 under the leadership of the Communist Party of China.
The NPC and the local people’s congresses at various levels are the organs through which State power is exercized.14 The members of the NPC and of the local people’s congresses at various levels are elected.15
All administrative, judicial and procuratorial organs of the State are created by the people’s congresses before which they are accountable.16
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The division of functions and powers between the central and local State organs is governed by “giving full scope to the initiative of local authorities under the unified leadership of the central authorities”.17
All nationalities in the PRC are equal. Regional autonomy is practised in areas where minority nationalities live in concentrated communities. All nationalities may use their own languages and determine their own customs.18
The country is ruled in accordance with the law.19
All acts in violation of the Constitution and the law must be investigated.
No organization or individual is beyond the Constitution or the law.
The State-owned economy under “ownership by the whole people” is the leading force in the national economy.20
Rural collectives implement the “household-based output-related contracted responsibility system” according to which producers’, marketing, credit and consumers’ cooperatives are subject to “collective ownership by the working people”.21
All mineral resources, waters, forests, mountains, grasslands, unreclaimed land, beaches, and other natural resources are owned either by the State for the whole people or by collectives.22
Land in cities is owned by the State, whereas land in the rural and suburban areas, except for sites attributed to the State by law, is owned by collectives, as are house sites and privately farmed plots of cropland and hilly land.
While no organization or individual may appropriate, buy, sell or lease land, or unlawfully transfer land in other ways, the right to the use of the land may be transferred.23
The State may, in the public interest and in accordance with the provisions of law, expropriate or requisition land for its use subject to the provision of compensation.24
All organizations and individuals using land must ensure its rational use.25
The State protects the lawful rights and interests of the individual and private sectors of the economy.26
The Constitution protects citizens’ lawful private property and their right to inherit property.27
State-owned Enterprises (SOEs) enjoy independence of management and operations.28
The country is divided into provinces (sheng), autonomous regions (zi zhi qu) and municipalities directly under the central government (zhi xia shi).
Provinces and autonomous regions are divided into autonomous prefectures (zi zhi zhou), counties (xian), autonomous counties (zi zhi xian), and cities (shi). Counties and autonomous counties are divided into townships (xiang), nationality townships (min zu xiang), and towns (zhen).
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Municipalities directly under the central government and other large cities are divided into districts and counties.
Autonomous prefectures are divided into counties, autonomous counties, and cities.29
3.2. The fundamental rights and duties of citizens
The Chinese Constitution protects the freedoms of assembly and of demonstration but independent movements of social protest may lead to pursuits under the criminal laws.31
Insult, libel, false accusation or false incrimination directed against citizens by any means are prohibited.32
Except for the needs of State security or of criminal investigations in accordance with procedures prescribed by law, citizens’ privacy of correspondence is inviolable.33
Citizens who have suffered losses as a result of infringement of their civic rights by any State organ or functionary have the right to compensation in accordance with the law.34
The State applies the principle of equal pay for equal work for men and women and trains women and selects them to be managers.35
For business, a concern involving human rights in China may arise in connection with its communications or its conduct of communications-related business, since the Chinese fashion of protecting freedom of speech and freedom of the press can expose them to accusations of practising double standards and to genuine ethical dilemmas when denunciations of political dissidents is required under Chinese law.30
3.3. The central level of government
3.3.1. The National People’s Congress
The NPC is the highest organ of State power. When it is not in session, its Standing Committee acts.36 It exercises the legislative power of the State.37
The NPC is composed of deputies elected from the provinces (including Taiwan), autonomous regions, municipalities directly under the central government, and the special administrative regions, and of deputies elected from the armed forces.38
The NPC is elected for a term of five years.39
The NPC meets in session once a year.40
The Standing Committee reports to the NPC.41 [Page23:]
3.3.2. The President and the Vice-President of the PRC
The President and the Vice-President are elected by the NPC. Their terms of office coincide with those of the NPC, and they may not serve more than two consecutive terms.42
The President promulgates statutes adopted by the NPC and its Standing Committee, appoints or removes the Premier, Vice Premiers, State Councillors, ministers in charge of ministries or commissions, the Auditor- General and the Secretary-General of the State Council.43
The President engages in activities involving State affairs and receives foreign diplomatic representatives and, in pursuance of the decisions of the Standing Committee of the NPC, appoints or recalls representatives abroad, and ratifies or abrogates treaties and important agreements with foreign States.44
3.3.3. The State Council
The State Council is the highest executive organ.45 The Premier assumes overall responsibility for the work of the State Council.
The Premier directs the work of the State Council.46
The Ministers assume responsibility for the work of the ministries and commissions.47
The term of office of the State Council is the same as that of the NPC.48
The State Council exercises full executive powers including for instance those:
Ministries and commissions issue orders, directives (zhi shi) and rules (gui zhang) within the jurisdiction of their respective departments in accordance with the law and the administrative rules and regulations, decisions and orders issued by the State Council.50
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The revenues and expenditures of all departments under the State Council and all local governments, financial and monetary organizations, enterprises and institutions of the State are subject to an independent audit under the responsibility of the Premier.51
The State Council is responsible, and reports on its work, to the NPC or, when it is not in session, to its Standing Committee.52
3.3.4. The Central Military Commission
The Central Military Commission directs the armed forces of the country.53
3.4. Local people’s congresses
People’s congresses and people’s governments are established in provinces, municipalities directly under the central government, counties, cities, municipal districts, townships, nationality townships, and towns.54 While the PRC is a unitary State, it is actually very decentralized, more so for instance than any of the federal States in the OECD. First, in the PRC, authorities at the sub-provincial levels enjoy spending powers with respect to the environment and natural resources, unemployment insurance, industry and agriculture, education, health, social welfare, police and road transportation. According to the Ministry of Finance, in 2001, the below-central level authorities collected almost 50% of all tax revenues and accounted for almost 70% of all government expenditures (the closest country in the OECD was Canada with about 5% less on each count). The dependency of regions on the central government for the financing of their expenditures varies from almost 90% for Tibet in 2003 to less than 20% in Beijing, Shanghai and the rich provinces of the South such as Guangdong, Zhejiang, and Jiangsu.
Deputies to the people’s congresses of provinces, municipalities directly under the central government and cities divided into districts are elected by the people’s congresses at the next lower level; deputies to the people’s congresses of counties, cities not divided into districts, municipal districts, townships, nationality townships, and towns are elected directly by their constituencies.55
The term of office of the local people’s congresses at various levels is five years.56
Local people’s congresses at and above the county level adopt and implement the plans for economic and social development and the budgets of their administrative areas.57
The people’s congresses of nationality townships may, within the limits of their authority as prescribed by law, take specific measures suited to the characteristics of the nationalities concerned.
The people’s congresses of provinces and municipalities directly under the central government and their standing committees may adopt local regulations, which must not contravene the Constitution and the law and administrative regulations and rules, and they report such local regulations to the Standing Committee of the NPC for the record.58
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Local people’s congresses and their respective levels elect governors and deputy governors, or mayors and deputy mayors, or heads and deputy heads of counties, districts, townships and towns. They also elect presidents of people’s courts and chief procurators of people’s procuratorates at their corresponding levels.59
Local people’s congresses at or above the county level elect and have the power to recall members of their standing committees.
No one on the standing committee of a local people’s congress at or above the county level may hold office in executive, judicial and procuratorial organs.60
The standing committee of a local people’s congress at and above the county level decides on major issues in all fields of work in its administrative area. It supervises the work of the people’s government, people’s courts and people’s procuratorate at the corresponding level. It annuls inappropriate decisions and orders of the people’s government at the corresponding level and annuls inappropriate resolutions of the people’s congress at the next lower level. It decides on the appointment or removal of officials of State organs within the limits of its authority and, when the people’s congress at the corresponding level is not in session, recalls individual deputies to the people’s congress at the next higher level and elects individual deputies to fill vacancies in that people’s congress.61
3.5. Local people’s governments
Local people’s governments at various levels are organs of State power as well as the local organs of State administration at the corresponding levels. They act under the unified leadership of the State Council and are subordinate to it.62
Governors, mayors and heads of counties, districts, townships and towns assume overall responsibility for local people’s governments at various levels.63
The terms of office of local people’s governments at various levels are the same as those of the people’s congresses at the corresponding levels.64
People’s governments of townships, nationality townships, and towns execute the resolutions of the people’s congress at the corresponding level as well as the decisions and orders of the State administrative organs at the next higher level and conduct administrative work in their respective administrative areas.
Local people’s governments at and above the county level direct the work of their subordinate departments and of people’s governments at lower levels, and have the power to alter or annul inappropriate decisions of their subordinate departments and of people’s governments at lower levels.65
Local auditing bodies at various levels conduct independent audits of government activities. They are accountable before the people’s government at the corresponding level and to the auditing body at the next higher level.66
Local people’s governments at various levels are responsible and report on their work to the State administrative organs at the next higher level.67
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The lowest echelon of government is constituted of residents’ committees and villagers’ committees established respectively among urban and rural residents on the basis of their place of residence. They are mass organizations of self-management at the grass roots level. Their members and officers are elected by the residents.
They create committees for people’s mediation, public security, public health and other matters in order to manage public affairs and social services in their areas, mediate civil disputes, help maintain public order and convey residents’ opinions and demands to the people’s government.68
3.6. Organs of self-government in autonomous regions, prefectures and counties
People’s congresses and people’s governments are instituted in autonomous regions, autonomous prefectures and autonomous counties. They are the vehicles of State authority within their jurisdictions.69
In the people’s congress of autonomous regions, prefectures and counties, minority nationalities inhabiting the area are entitled to appropriate representation. At least one of the chairmen or vice chairmen of the standing committee of a people’s congress of an autonomous region, prefecture or county must be from a nationality exercising regional autonomy.
The chairman of an autonomous region, the prefect of an autonomous prefecture or the head of an autonomous county must belong to the nationality exercising regional autonomy.70
The people’s congresses of the national autonomous areas have the power to enact measures in the light of the political, economic and cultural characteristics of the local nationality or nationalities. They must be submitted to the Standing Committee of the NPC for approval before they enter into effect.71
The organs of self-government of the national autonomous areas enjoy autonomy in administering the finances of their areas. They collect and manage all revenues accruing to the national autonomous areas under the financial system of the State.72
In exploiting natural resources and building enterprises in the national autonomous areas, the State gives due consideration to the interests of those areas.73
The organs of self-government of the national autonomous areas independently administer educational, scientific, cultural, public health and physical culture affairs in their respective areas, protect the cultural heritage of the nationalities and work for a vigorous development of their cultures.74
The organs of self-government of the national autonomous areas may organize local public security forces.75
In performing their functions, the governments of the national autonomous areas use the spoken and written languages commonly used in the locality.76
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3.7. The people’s courts
The judicial organs of the State are the Supreme People’s Court and the local people’s courts at different levels, the military courts and other special people’s courts, such as the railway courts, the maritime courts and the forestry courts.77
The people’s courts are independent and are not subject to interference by any administrative organ, public organization or individual.78
Except in special circumstances specified by law, all cases in the people’s courts are heard in public. The accused has the right to a defence.79
The highest judicial organ is the Supreme People’s Court.
The Supreme People’s Court supervises the administration of justice by the judicial system. People’s courts at higher levels supervise the administration of justice by those at lower levels.80
The Supreme People’s Court is responsible to the NPC and its Standing Committee. Local people’s courts at various levels are responsible to the organs of the State that created them.81 The President of the Supreme People’s Court is elected by the NPC upon nomination of its Presidium. The other judges are appointed by the Standing Committee of the NPC upon nomination of the President of the Supreme Court.82
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The term of office of the President of the Supreme People’s Court is the same as that of the NPC. The President may not serve more than two consecutive terms.83
Attached to the Supreme People’s Court and to the courts at lower levels are judicial committes responsible for leading the judicial work of the whole court. The committee’s role is to provide guidance in the implementation of democratic centralism.
Citizens of all nationalities have the right to use their national languages in court proceedings.84
3.8. The people’s procuratorates
Prosecutorial functions are carried out by the people’s procuratorates, military procuratorates and other special people’s procuratorates at all levels.85
The people’s procuratorates exercise procuratorial power independently, in accordance with the provisions of the law, and are not subject to interference by any administrative organ, public organization or individual.86
The highest procuratorial organ is the Supreme People’s Procuratorate. It directs the work of the people’s procuratorates and of the special people’s procuratorates at various local levels. People’s procuratorates at higher levels direct the work of those at lower levels.87
The Supreme People’s Procuratorate is responsible to the NPC and its Standing Committee. People’s procuratorates at various levels are responsible to the organs of State that created them and to the people’s procuratorates at higher levels.88
The term of office of the Procurator General of the Supreme People’s Procuratorate is the same as that of the NPC. The Procurator General may not serve more than two consecutive terms.89
3.9. The Special Administrative Regions
The last vestiges of the colonial presence in China after 1949 were the colonies of the United Kingdom in Hong Kong and of Portugal in Macao.
In 1943, the foreign powers had finally renounced their “extraterritorial” status obtained under the Unequal Treaties concluded during the 19th century when the Qing Empire reached its nadir.90 These treaties had permitted foreigners to escape the application of Chinese law and the jurisdiction of the Chinese courts, which in practice facilitated their abuse of Chinese nationals as well as their conduct of illegal trades. The concessions were obtained largely on the argument that the Chinese legal system was so harsh and corrupt, and the conditions in its prisons so severe, that citizens of relatively developed countries might reasonably claim to be governed by their national laws and courts.91 The United States, for instance, established in 1906 a court of first instance in China under the Court of Appeal of the 9th circuit in California. Altogether, the foreign powers operated almost 100 consular courts throughout China.
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Despite the efforts of the Qing Emperor, and then of the Nationalist Government, to assuage the concerns of the foreign community about the quality of the local legal system, including the adoption of codes of law on the European model, the foreign powers refused the unrelenting requests of the Chinese governments to relinquish their extraterritorial status. From the outset, foreign States’ complaints about the excessive rigour of the Chinese penal system had been frequently exaggerated to justify their claims to advantageous extraterritorial regimes.
3.9.1. Hong Kong
The territory comprising Hong Kong was transferred to British rule in three stages. At the conclusion of the First Opium War (1840–1842), the Emperor ceded to the British sovereignty in perpetuity over Hong Kong Island. At the conclusion of the Second Opium War (1856– 1860), he was obliged to cede to Britain sovereignty of the Kowloon Peninsula facing Hong Kong Island. And finally, in 1898, Great Britain obtained from a weakened Emperor a 99-year lease to what became known as the New Territories behind the Kowloon Peninsula.
On December 18, 1941, Japan occupied Hong Kong. During the occupation, the colony’s population was reduced from some 1.6 million to about 600,000, but after the Communist Revolution the flow of population was reversed as the territory became a haven, first for defeated nationalists and their sympathisers, and then for refugees from persecution and misery in China.
Pursuant to the Joint Declaration of December 19, 1984, signed by the Prime Ministers of the United Kingdom and the PRC, the entire territory of Hong Kong was reverted to China on July 1, 1997. The Joint Declaration consecrates the principle of “one country, two systems” which is intended to guarantee preservation of the capitalistic system in Hong Kong for a period of 50 years.
According to article 3(2) of the Joint Declaration, the Hong Kong SAR is “directly under the authority” of the central government. The same article guarantees the Hong Kong SAR “a high degree of autonomy, except in foreign and defence affairs”, which are stated to be under the responsibility of the central government; nevertheless, Hong Kong will continue to participate in international organizations and agreements where appropriate (such as the World Trade Organization (WTO)).
The SAR has its own legislature, its own law and judicial system, as well as full economic autonomy.
On the economic side, Hong Kong will remain free of restrictions on inward or outward movements of goods, services, and capital. The rights to own property and to own a business are also protected. Furthermore, the right to strike remains in effect.
The basic political freedoms are to remain in place, such as the right of free speech, freedom of assembly, freedom of the press, freedom of religion, the right of inheritance and the right to travel.
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Pursuant to the provisions of the Joint Declaration, on April 4, 1990, the third Session of the Seventh NPC enacted the Basic Law of the Hong Kong SAR. As the Joint Declaration is an international agreement binding only upon the PRC and the United Kingdom, it does not directly afford any rights to Hong Kong people or their enterprises. The Basic Law will thus be the ultimate source of norms governing the legal, economic and social system in Hong Kong over the next 50 years.
According to the Basic Law, the Hong Kong legislature has the power to enact laws provided they do not contravene the Basic Law.
According to article 2 of the Basic Law, the SAR exercises “a high degree of autonomy and enjoys executive, legislative and independent judicial power, including that of final adjudication”. The Basic Law provides that laws previously in force in Hong Kong, that is, the common law, rules of equity, ordinances, subordinate legislation and customary law, will remain in force in the SAR.92 The courts of the Hong Kong SAR will adjudicate cases in accordance with the laws applicable in the SAR and may refer to precedents of other common law jurisdictions.93
Article 8 of the Basic Law provides that “land and natural resources shall be State property”. In fact, this provision will not greatly change the current situation in which virtually all land is vested in the government that grants long-term leases.
Under article 160 of the Basic Law, the laws previously in force in Hong Kong are adopted as laws of the SAR except those declared by the Standing Committee to be in contravention of the Basic Law. All documents, certificates, contracts and rights and obligations in effect at the time of transition will remain recognized and protected, unless they violate the Basic Law.
Article 85 provides that the judiciary of Hong Kong will exercise judicial power independently, free from any interference. The positions of sitting judges in Hong Kong are preserved and members of the judiciary are to remain free from legal action in the performance of their judicial functions.94 The rights to confidential legal advice and the freedoms to choose one’s lawyer and legal recourses are also maintained.95
The right to challenge acts of the executive branch continues in effect.
A new Court of Final Appeal has replaced the Privy Council as the court of final recourse. Article 88 provides that the members of the judiciary are appointed by the head of government of the SAR, based upon recommendations of an independent commission comprised of local judges, members of the legal profession and eminent individuals from other sectors. Judges may be chosen from common law jurisdictions. The Court of Final Appeal has the capacity to invite, where appropriate, judges from common law jurisdictions to sit on the Court.96
English and Chinese are used as official languages by the executive, legislative and judicial branches of the government of the SAR.97
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3.9.2. Macao
The first Portuguese reached China in 1514 and during the subsequent half century, the increasing number of the country’s traders and clerics gravitated around Macao. In the 1550s, they were given permission to reside there and in 1574 a wall was erected to seal off the settlement that was thereafter allowed to administer itself as an autonomous enclave.
After more than one offer by Portugal to abandon its colony in Macao to the PRC, for instance after the Democratic Revolution, all of which were rejected, the deal was sealed in a secret agreement concluded in 1979, in which Macao was defined as “Chinese territory under Portuguese administration”. In 1987, the PRC and Portugal adopted a Joint Declaration on restoring Macao to Chinese rule 1999, two years after the return of Hong Kong.
The Basic Law adopted in 1993 with respect to Macao reiterates the main principles of the Basic Law with respect to Hong Kong: “one country, two systems”, maintenance of the socio-economic system for 50 years, and a high degree of autonomy in all fields except foreign affairs and defence. Representative democracy had been introduced, if only on a narrow franchise, as early as 1976.
A particular aspect of the Macao transition is the consecration of the rights of the Portuguese to continue the use of their language and of the Macanese (Eurasians speaking Cantonese and Portuguese) to protect their culture.
3.10. Taiwan
Chinese began emigrating to Taiwan in significant numbers during the Ming dynasty (1368 – 1644).
In 1624, the Dutch established, and maintained for several years, a trading station on Taiwan that came to be known as Zeelandia.
When the Kangxi Emperor (1662 – 1722) of the Qing Dynasty annexed the island of Taiwan in 1684 and integrated it as a prefecture of the province of Fujian, it already had some 100,000 ethnic Chinese and, despite subsequent official restrictions on emigration to the island, its Chinese population had reached two million by 1811.
In 1874, a Japanese force landed on the island in reprisal for the murder of shipwrecked countrymen. In 1894, Japan declared war on China using the countries’ conflict in Korea as a pretext. When the war turned disastrously to its disadvantage, China petitioned for peace and was obliged in the Treaty of Shimonoseki of 1895 to cede Taiwan to its victorious enemy.
After their defeat by the Communists in 1949, the nationalist leader Jiang Jieshi (Chiang Kai Shek – 1887 – 1975) fled to Taiwan with one million troops.
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On January 27, 1964, Mao Zedong and the French President de Gaulle concluded an agreement to create bilateral diplomatic ties between their countries, which amounted to the PRC’s first opening to the Western world. The thawing of China’s diplomatic relations began in 1971, with a secret trip of Secretary of State Henry Kissinger to China to pave the way for President Nixon’s visit one year later. Gradually, other States accepted China’s condition of abandonment of diplomatic relations with Taiwan as a prelude to their opening with the PRC.
In 1996, Taiwan held its first direct elections for the nation’s president.
Though Taiwan is a member of the WTO which allows the direct entry of territories of States, and also includes Hong Kong, hardly any States currently recognize Taiwan as a State or entertain diplomatic relations with it. On the other hand, Taiwan is represented in most countries by commercial agencies that conduct the equivalent of consular relations involving the issue of visas and the provision of information and trade-related public services.98
In Chinese law, the treatment most often reserved to Taiwanese nationals is the same as that accorded to those from the Hong Kong and Macao SARs.
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In China, laws are referred to as organic when they engender the creation of institutions and a family of norms. Arguably, in the business context, the Company Law might qualify as an organic law in that, after its enactment by the NPC, it has been declined in more detailed texts dealing with the issue of shares within and outside China.
The various ministries, committees and commissions of the State Council issue a plethora of regulations (fa gui), rules (gui zhang), directives (zhi shi), provisions (tiao li), measures (ban fa, cuo shi), decisions (jue ding), resolutions (jue yi), notices (tong zhi) and orders (ming ling).
Norms are also issued with an equal variety of designations by provincial, municipal, county and prefectoral authorities with the consequent multiplication of the difficulty of normalization.
In so far as the Chinese sources themselves have not always used a consistent nomenclature to designate these norms, ranking them has been a difficult exercise, especially since the translations into various foreign languages, including attempts at cross-referencing, have only exacerbated these ranking difficulties.99 Finally, certain internal rules (nei bu) are applicable without public disclosure.
To clarify the legislative process, the NPC adopted on March 15, 2000 the Legislation Law.100 The Law governs the enactment, amendment and repeal of all national laws (fa lü), administrative regulations (xing zheng fa gui), local regulations (di fang xing fa gui), autonomous provisions (zi zhi tiao li) and special provisions (dan xing tiao li).
The basic principles governing the legislative process are defined in the Legislation Law as including adhesion to the democratic dictatorship by the people, to the leadership by the Chinese Communist Party, to the theory of Marxism, Leninism, Maoism and to the reform and opening to the outside world.101 Lawmaking is to be based on actual circumstances and is, in a scientific and reasonable manner, to be used to define the rights and obligations of citizens, legal persons and other organizations, and the powers and duties of State organs.102
4.1. National legislation
The NPC and its Standing Committee exercise State legislative power. The NPC enacts and amends criminal, civil, and state organic laws and other basic laws. The Standing Committee of NPC adopts and amends laws other than those to be enacted by the NPC. While the NPC is not in session, the Standing Committee may partially amend and supplement the laws enacted by the NPC, provided that any amendment or supplement may not contravene the basic principles of such national law.103 [Page34:]
4.1.1. Scope of national legislation
Only national law may be enacted in respect of matters relating to:
Where no national law has been enacted, the NPC and the Standing Committee may delegate to the State Council the power to enact regulations on matters that do not touch upon crimes or criminal sanctions, the deprivation of citizens’ political rights, compulsory measures or punishments restricting citizen’s freedom, or the judicial system.105
4.1.2. The national legislative process
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Bills may be introduced before the NPC by the State Council, the Central Military Committee, the Supreme People’s Court, the Supreme People’s Procuratorate, and the NPC’s various special committees.106
National laws enacted by the NPC are promulgated by decrees signed by the President as head of State.107
The Standing Committee gathers “the opinions of the concerned constituents such as through panel discussions, feasibilities, study meetings, hearings, etc.”.109
When a major bill is before the Standing Committee, the draft may first be presented to the public for comments.110
Bills presented to the Standing Committee are enacted if more than half of the votes cast by the members of the Standing Committee are affirmative,111 and bills presented to the NPC are adopted if they receive affirmative votes from more than half of all delegates.112
4.1.3. Interpretation of national laws
The power to interpret national laws is vested in the Standing Committee of NPC. It may do so when the specific meaning of a provision requires further clarification or a new situation has arisen that requires clarification of the basis of its application.113
The State Council, the Central Military Committee, the Supreme People’s Court, the Supreme People’s Procuratorate, the various special committees of the Standing Committee and the standing committee of the people’s congresses of the provinces, autonomous regions and municipalities directly under the central government may request legislative interpretations by the Standing Committee.114
Interpretations have the same force as laws themselves.115
Legislative interpretations are adopted if affirmed by more than half of all members of the Standing Committee, and they are promulgated by the Standing Committee by way of a public announcement.116
Laws must specify their dates of entry into effect.117
Presidential orders of promulgation laws identify the enacting organ, and state the dates of adoption and of implementation.118
Upon signing and promulgation, laws are published in a timely manner in the Bulletin of the Standing Committee of NPC119 and in nationally circulated newspapers.120
Where laws are partially amended, a new version is published.121
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4.2. Administrative regulations (xing zheng fa gui)
The State Council is empowered to enact administrative regulations in accordance with the Constitution and national law to implement national laws.
Administrative regulations are drafted by the State Council or by the agencies under its jurisdiction with its approval.122
Bodies under the State Council drafting regulations must canvass opinions from a wide circle of constituents, such as the concerned agencies, organizations and citizens.123
The enactment of administrative regulations must comply with the Organic Law with respect to the State Council.124
Administrative regulations are promulgated by orders of the State Council that are signed by the Prime Minister.125
Administrative regulations must be published in a timely manner in the State Council Bulletin as well as in nationally circulated newspapers.126
4.3. Local regulations (di fang xing fa gui), autonomous provisions (zi zhi tiao li) and special provisions (dan xing tiao li)
The people’s congresses of the provinces, autonomous regions, municipalities directly under the central government and their respective standing committees may enact local regulations (di fang xing fa gui), which may not, however, contravene any provision of the Constitution, of national laws or of administrative regulations.
The people’s congresses and their standing committees in major cities may also enact local regulations within the limits of their compliance with the Constitution, national laws, administrative regulations and the local regulations in force in the province or autonomous region where they are located. Their implementation, however, is subject to approval by the standing committee of the people’s congress of the province or autonomous region.127
Local regulations and provisions may be adopted to implement national laws or administrative regulations in light of the actual situation of the jurisdiction or to deal with matters of a local nature.128
Except for matters reserved for national-level action, for any matter about which the State has not enacted national laws or administrative regulations, the people’s congresses of the provinces, autonomous regions, or municipalities directly under the central government and their standing committees may, in the light of their specific situations and actual needs, enact provisional regulations and provisions of local effect.129
The people’s congresses of autonomous ethnic regions may, in light of local ethnic, political, economic and cultural characteristics, enact autonomous provisions (zi zhi tiao li) or special provisions (dan xing tiao li). They come into force subject to approval by the Standing Committee of the NPC. Provisions adopted by autonomous prefectures and autonomous counties come into force upon approval by the standing committee of the concerned people’s congress.
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Autonomous and special provisions may vary the provisions of laws or administrative regulations, provided that their basic principles are respected, and provided there does not arise any violation of the Constitution or of the Law on Ethnic Area Autonomy or provisions of other laws or administrative regulations specifically aimed at their ethnic autonomous areas.130
Local provisions dealing with major matters within the jurisdiction must be adopted by the people’s congress at that level.131
Special economic zones approved by the NPC are subject to the administrative jurisdiction of the provinces or municipalities under the direct central administration where they are located.132
4.4. Administrative rules (bu men gui zhang) and local rules (di fang zheng fu gui zhang)
Government ministries, commissions, and organs directly under the State Council which are vested with regulatory functions may adopt administrative rules (bu men gui zhang) within the scope of their authority in accordance with national laws, administrative regulations, as well as decisions and orders of the State Council.133
The people’s government of a province, autonomous region, municipality directly under the central government or a major city may enact local rules (di fang zheng fu gui zhang) in accordance with national laws, administrative regulations and local regulations. Local rules serve to implement national laws, administrative regulations and provincial-level regulations and provisions and to deal with matters of local scope.134
Administrative rules must be made public by the agency promulgating them. Local rules are publicly promulgated by the governor of the province, the chairman of the autonomous region or the mayor of the city.135
Administrative rules must be published in a timely manner in the State Council Bulletin or the concerned agency’s bulletin as well as in national newspapers. Local rules are published in a timely manner in the bulletin of the local people’s government and newspapers circulating within the local jurisdiction.136
4.5. Hierarchy of norms
The Legislation Law confirms that no national law (fa lü), administrative regulation (xing zheng fa gui), local regulation (di fang xing fa gui), autonomous provision (zi zhi tiao li) or special provision (dan xing tiao li), or administrative rule (bu men gui zhang) or local rule (di fang zheng fu gui zhang) may contravene the Constitution.137
In the case of conflicts within the texts adopted by the same authority, special provisions prevail over general ones and if a new provision differs from an old provision, the more recent one prevails.138
National laws prevail over administrative regulations, local regulations and administrative or local rules.139 Administrative regulations prevail over local regulations and over administrative and local rules.140
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A local regulation ranks above local rules issued by governments at the same or lower levels. Local rules enacted by the people’s government of a province or autonomous region are above local rules enacted by the people’s government of a major city within its jurisdiction.141
Where an autonomous or a special provision varies from national laws, administrative regulations or local regulations, it prevails in the concerned autonomous area. A similar solution applies to the regulations of special economic zones.142
Administrative rules and local rules are of the same rank.143
Except to better protect the rights and interests of citizens, legal persons and other organizations, regulations do not have retroactive effect.144
When there arise conflicts between a general provision and an earlier special provision among two national laws or among two administrative regulations, and the applicable provision cannot be decided, they are resolved respectively by the Standing Committee of the NPC and by the State Council.145
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4.6. The resolution of conflicts among norms
Conflicts between a law and its enabling law are submitted to the Standing Committee of the NPC.146
The NPC may amend or cancel any inappropriate national law adopted by its Standing Committee and may cancel any autonomous or special provisions the latter has improperly approved.147 It may cancel any administrative regulation that contravenes the Constitution or a national law, as well as local regulations that contravene the Constitution or a national law or administrative regulation, and autonomous or special provisions improperly approved by the standing committee of the people’s congress of any province, autonomous region, or municipality directly under the central government in violation of the Constitution.148 The NPC can also amend or cancel any inappropriate administrative rule or local rule.149
The State Council resolves conflicts between administrative rules, as well as those between local rules and administrative rules.150
In cases of conflicts between local regulations and administrative rules, if the State Council decides that the local regulation should apply, then it is applied in that jurisdiction. Where it favours the administrative rule, the matter is brought before the Standing Committee of the NPC.151
The people’s congresses of the provinces, autonomous regions, and municipalities directly under the central government and their standing committee may amend or cancel any inappropriate local regulations enacted by their standing committees as well as any inappropriate local rules the latter has approved.152
The standing committee of a local people’s congress may cancel any inappropriate rule enacted by the local government.153
The people’s government of a province, autonomous region, or municipality directly under the central government may amend or cancel any inappropriate local rule enacted by a lower level people’s government.154
Where the State Council, the Central Military Committee, the Supreme People’s Court, the Supreme People’s Procuratorate, a special committee of the Standing Committee or the standing committee of the people’s congress of any province, autonomous region or municipality under direct central government considers that an administrative regulation, local regulation, autonomous or special provision contravenes the Constitution or a national law, it may make a written request to the Standing Committee of the NPC for review.155
Where any State organ, social organization, enterprise or non-enterprise institution or citizen other than the bodies enumerated above, considers that an administrative regulation, local regulation, autonomous or special provision contravenes the Constitution or a national law, it may make a written proposal to the Standing Committee of the NPC for review.156
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5. Administrative law
Conducting business in China entails permanent contacts with government.
The development of a functioning body of administrative law is a key to achieving a marketbased economy which authorities will regulate while discharging upon managers the tasks of operating their enterprises within the established legal framework.
5.1. Administrative licences
The Administrative Licence Law, adopted on August 27, 2003, serves as a framework for enterprises’ relations with the Administration.157
5.1.1. General provisions
Whenever the conduct of an activity is subject to the permission of administrative organs, the process is governed by the Administrative Licence Law. The Law does not apply to personnel and financial administration or to the foreign relations of administrative organs or other organs or public institutions directly under their administration.158
In administrative licensing processes, the principles of publicity, fairness and impartiality must be respected.
Regulations on administrative licensing must be announced publicly, though State secrets, commercial secrets and individual privacy remain confidential.
Applicants meeting the legal conditions and standards are entitled to equal rights in administrative licensing and administrative organs may not discriminate among them.159
In an administrative licensing process, applicants are entitled to make statements and to defend their interests and, if they are dissatisfied with the result, they may apply for administrative reconsideration or file an administrative lawsuit before the people’s courts and, in appropriate cases, they may claim compensation.160
Lawfully obtained administrative licences are protected by law. Administrative organs may not change a valid administrative licence without permission.
Where laws, regulations and rules grounding the administrative licence are amended or abolished, or the where the objective circumstances underlying a licence undergo significant change, and in order to serve public interests, administrative organs may modify or withdraw valid licences.161
Except where otherwise provided by law, administrative licences may not be transferred.162
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5.1.2. Institution of administrative licences
The requirement to obtain an administrative licence may be imposed for any of the following matters:
In such matters, licensing regimes are introduced by laws, whereas for others, they may be adopted by administrative regulation.164
Administrative licences need not be instituted for matters:
In the absence of a governing law or administrative regulation and in cases of necessity, local governments may establish temporary licensing regimes the extension of which depends upon approval by the people’s congress at the same level.166
No local regulation or government rule of the provinces, autonomous regions and municipalities directly under the central government may institute any administrative licence for the establishment and registration of enterprises or other institutions. The requirement in any region of an administrative licence may not hinder individuals or enterprises from other regions from carrying on production and trade and providing services locally.167
Local governments may adopt licensing regulations in the interstices of upper regulations to make them more specific but they may not violate their provisions.168
Before licensing procedures are implemented, drafting entities must collect the opinions of concerned parties through hearings and they must explain their necessity and their potential effects on the economy and society.169
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5.1.3. Organs qualified to implement licensing regimes
Administrative licensing regimes may only be implemented by administrative organs within their statutory functions.170
Organizations to which are attributed functions involving the management of public affairs under the authorization of a law or regulation may directly implement administrative licensing procedures.171
An administrative organ may authorize other administrative organs to implement an administrative licensing system it has adopted. The authorising organ must publicly announce the authorized administrative organs and the particulars of the administrative licence. The authorizing administrative organ remains liable for the consequences of implementation.172
When implementing administrative licensing, the administrative organ may not require applicants to buy designated commodities or to hire services nor may it make other unreasonable requests.173
In handling an administrative licence, agents of the administrative organ may not extort property from or accept property of the applicants nor may they favour any other interests.174
5.1.4. Procedures applicable to administrative licences
Applicants for licences may appoint agents to apply on their behalf. Applications for administrative licences may be filed by letter, telegraph, telex, fax, electronic data interchange and e-mail.175
Administrative organs must display the basis, conditions, quantity, procedures and time limit as stipulated in the laws, regulations and rules, as well as a complete set of materials to be submitted and a complete application form. They are obliged to give explanations in reply to questions of interested participants.176
Where the subject of the application falls within the functions of the administrative organ and the application is complete and complies with the statutory requirements as to its form, the application is accepted and the administrative organ issues written confirmation bearing its seal and a clear indication of the date of receipt.177
Administrative organs must inform parties that have direct interests in applications for administrative licences and they must hear their opinions.178
When an application is rejected, an explanation must be provided and the applicant must be informed of its right to apply for administrative reconsideration or to file an administrative lawsuit.179
Public notice must be given of decisions to approve administrative licences, which the general public is entitled to consult.180
Administrative licences enjoy nationwide validity.181
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Administrative organs must render decisions on applications for administrative licences within 20 days182 from the day of their acceptance. Where it is impossible to do so, the period may be extended for 10 days upon the approval of the person in charge of the administrative organ. Also, where more than one administrative organ is involved in the decision, the period is in principle 45 days, which may be extended for 15 days.183
When an administrative organ approves the issue of an administrative licence, within 10 days from the day of the decision, it issues a certificate, or stamps a label or affixes a seal of inspection, testing or quarantine.184
When required by law or regulations, or if the licensing matter is of great importance for the public interest, the administrative organ makes a public announcement and holds a hearing.185
Where an administrative licence is of direct significance to the interests of the applicant or others, before the administrative organ makes a decision, it informs the applicant or the interested party of its right to request a hearing. Where the applicant or interested party applies for a hearing within five days from the day when it is informed of such right, the administrative organ organizes the hearing within 20 days. Neither the applicant nor the interested party are obliged to pay for the expenses for the hearing.186
Administrative organs must give applicants and interested parties seven days’ advance notice of the time and place of the hearing and, where required, must make public announcements. Administrative hearings are open to the public. During hearings, the persons who are responsible for the examination of application for administrative licences must provide evidence and state the reasons for their opinions. Applicants and interested parties may produce evidence, defend and conduct cross-examinations.
Transcripts are made of the debates. Administrative organs make decisions about administrative licences on the basis of the transcripts of the hearing.187
When licences need to be amended or extended, and unless otherwise provided by law, applications are filed with the authorities that originally issued them. Decisions about extensions are to be rendered before expiration of the licence, and otherwise, the extension is deemed to have been approved.188
Unless otherwise provided by laws or regulations, in connection with the development and utilization of limited natural resources, allocation of public resources or access to special trades that directly concern public interests, administrative organs must apply fair competitive methods, such as calls for tenders and auctions. Failures to implement bids or auctions when required may give rise to claims for administrative reconsideration or to lawsuits before the people’s courts.189
Unless otherwise stipulated by law and administrative regulations, administrative organs may not charge for reviewing licence applications.
Higher administrative organs supervise the licensing activities of lower echelons.190
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Administrative organs may conduct random examinations on the products manufactured and traded by a licencee and they may conduct on-the-spot examinations of places of production and operations. When conducting examinations, administrative organs may require licencees to communicate relevant materials. Administrative organs conduct periodic examinations of equipment and facilities that directly concern public security, human health and the safety of life and property.191
In conducting supervision and examination, administrative organs may not hinder the licensee’s normal operations, and they must not seek to extort the licensee’s property or seek advantages for other interests.192
Administrative organs are competent over illegal activities conducted in their jurisdictions and they inform the administrative organs having issued any concerned licences.193
Where any individual or organization discovers violations connected with an administrative licence, they may inform the administrative organ, which must promptly investigate and deal with any problem.194
Licencees for particular trades of direct importance to public interests must provide users with safe, convenient and stable services at fair prices. They must satisfy their obligations as regards the provision of universal services. Without the approval of the licensing administrative organ, licencees may not stop or suspend their activities.195
Administrative organs may, upon their own initiative or at the request of interested parties, cancel licences granted to unqualified applicants or the grant of which arose from an abuse of power, a neglect of duty, an excess of the decision-maker’s statutory power, a violation of statutory procedures, bribes or any other illegal acts. Where a licence is wrongfully cancelled the administrative organ may be liable for compensation.196
Administrative organs initiate cancellation procedures in any of the following situations:
5.1.5. Liabilities
The Administrative Licence Law provides a wide range of sanctions for violations of its provisions, including remedial orders, fines, confiscation of illegal gains, restrictions, suspensions or closures of activities and cancellation of licences.197
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Officials and employees of administrative organs who violate the Law are subject to disciplinary sanctions, administrative sanctions and even criminal pursuits in serious cases, such as in those involving bribery.198
In any of the following circumstances, an administrative organ may be ordered by its hierarchically superior or supervisory organ to undertake remedial action; the directly responsible persons in charge and other directly responsible persons are exposed to administrative sanctions and, in serious cases, to criminal pursuits:
If an administrative organ charges fees without authorization or beyond its statutory scope, its superior administrative or supervisory organ may order it to refund excess payments and those directly responsible persons in charge and other responsible persons are subject to administrative sanctions. If fees collected in implementing an administrative licence are misappropriated, diverted to private purposes or distributed in a disguized form, payments are refunded and the directly responsible persons in charge and other directly responsible persons are subject to administrative sanctions. In serious cases, criminal pursuits may be launched against offenders.199
Administrative organs may be ordered to pay compensation to parties that suffer harm as a result of their illegal decisions about licensing issues.200
When an administrative organ fails to exercise its authority or does so inadequately and thereby causes serious consequences, its superior or supervisory organ may order it to remedy the situation. The directly responsible persons in charge and other directly responsible persons are then subject to administrative sanctions. In serious cases, criminal pursuits may be brought against the wrongdoers.201
Where an administrative licence has been obtained by illegal means such as fraud or corruption, the responsible party is subject to administrative punishment. If the administrative licence directly concerns public security, human health and safety of life and property, the applicant may be barred from re-applying for three years. Serious offences may be pursued under the criminal law.202
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If a licencee commits any of the following acts, it is exposed to administrative punishment and, in serious cases, it may be pursued under the criminal law:
5.2. Administrative punishments
The Administrative Punishment Law was adopted in 1996 to impose a national regime of administrative sanctions and increase the effectiveness of administrative decisions and orders.204
Only laws, regulations or provisions of the Administrative Punishment Law may validly create administrative sanctions.205
Administrative sanctions must be based on facts and correspond to the nature and circumstances of the infraction as well as the degree of its harm to society.206
Citizens, legal persons or other organizations pursued by an administrative organ have the right to defend themselves. If they are not satisfied with the application of any administrative sanction, they may apply for administrative reconsideration or bring a lawsuit before the people’s courts and they may claim compensation for harm caused by illegal conduct.207
The application of administrative sanctions does not exclude the civil liability of parties guilty of administrative infractions that cause harm nor do they substitute for criminal sanctions in serious cases.208
5.2.1. Types of administrative penalties
Article 8 of the Administrative Punishments Law authorises the following administrative sanctions:
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Administrative sanctions that restrict personal freedom may only be enacted by laws.209
Within the scope of their enabling laws and to complement their provisions, local regulations may create administrative sanctions except restrictions on personal freedom and revocations of enterprises’ operating licences.210
Administrative rules formulated by ministries and commissions under the State Council or by local authorities may, within the limits provided by law and administrative regulations, make specific stipulations with respect to conduct subject to administrative punishments and on the types and extent of the punishments. For behaviour that has not yet been subject to any laws or administrative regulations but that violates their rules, ministries and commissions under the State Council may issue warnings and impose fines within limits stipulated by the State Council.211
5.2.2. Organs qualified to administer administrative sanctions
Only the State Council or provincial, autonomous regional and municipal people’s governments authorized by the State Council may empower administrative organs to impose punishments.
Restrictions on personal freedom may only be carried out by public security organs.212
Organizations authorized by laws and regulations to manage public affairs may apply administrative punishments within the limits of their legal authority.213
Administrative organs may entrust qualified organizations to apply administrative punishments while remaining responsible for their conduct.214 Only institutions established according to law and managing public affairs, which employ staff familiar with relevant laws, regulations, rules and operations and which are able to conduct technical inspections or evaluations of offences, are qualified to receive delegations to administer punishments.215
5.2.3. Jurisdiction with respect to administrative punishments
When jurisdiction is disputed, the parties must refer the case to an administrative organ at a common higher level.216
When unlawful acts constitute crimes, the administrative organ in charge must refer the case to a procuratorate.217
5.2.4. Decisions to apply administrative punishments
For an administrative organ to apply a punishment, it must have clear proof of guilt of a violation.218
Before deciding to impose a sanction, administrative organs must inform the concerned parties as regards the facts and the grounds for the decision, and of their rights.219
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Interested parties may make statements and defend themselves. If their evidence and arguments are convincing, the administrative organ must decide accordingly. Punishments of the parties must not be increased because they have defended themselves.220
Administrative penalties may be applied on the spot if the penalty for an individual does not exceed RMB 50 or RMB 1,000 for organs.221 When making on-the-spot decisions, law enforcement agents must produce their professional identity card, fill out a numbered administrative punishment form and give it to the concerned party immediately. The administrative punishment form should contain the details of the infraction, the basis for the penalty, the amount, time and location of the fine and the name of the administrative department. Law enforcement personnel must sign or seal the completed form. They must report their decisions on administrative punishment to their administrative department for the records.222 When parties do not agree with a punishment, they may apply for administrative review or file an administrative lawsuit.223
When an administrative department conducts an investigation or inspection, at least two law enforcement personnel must be present. Parties must answer their questions in a truthful manner. A record is set down of the questions and inspections. If a law enforcement agent and a party have direct common interests, the former must withdraw from the matter.224
Before suspending production or business operations, revoking certificates or business licences, imposing relatively large fines or imposing other administrative punishments, administrative organs must notify the parties of their right to a public hearing, and they must organize one if the latter so request. The parties may not be charged for the expenses of public hearings. At least seven days’ advance notice of any hearing must be given to the parties. Except to protect State secrets, business secrets or individual privacy, hearings are held in public. The parties may personally attend public hearings or appoint others to represent them; they may defend themselves and confront the investigators. Transcripts of public hearings are recorded and they are signed by them or affixed with their seals.
5.2.5. Attenuation of administrative punishments
In carrying out administrative punishments, administrative organs should order parties concerned to correct their unlawful acts.225
Parties concerned must not be given more than one administrative punishment for any single unlawful act.226
Clemency is extended to those who commit unlawful acts under coercion, who voluntarily eliminate or reduce the damaging consequences resulting from their unlawful acts, and who help administrative organs in their investigations. Those whose unlawful acts are minor and have not resulted in damaging consequences and who promptly correct their mistakes are not to be given administrative punishments.227
Periods spent in administrative detention as well as administrative fines paid are respectively imputed against any periods of criminal detention or prison and fines imposed by people’s courts.228
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5.2.6. Execution of administrative punishments
Administrative punishment decisions are executory despite the pursuit of recourses.229
Except for on-the-spot punishments, departments that decide fines should be separated from those that collect them.
Administrative fines must be paid within 15 days.230
A law enforcement official may collect on-the-spot fines under RMB 20 and those that may be “difficult to collect in the future”.231
If law enforcement personnel do not produce a standardized receipt of the financial department, the party has the right not to pay the fine.232 Within two days of collecting a fine on the spot, law enforcement personnel must turn over the funds to their administrative departments.233
If the administrative punishment is not executed in due time, the administrative department that made the decision may take the following measures:
Property confiscated, other than that which must be destroyed according to law, must be put up for public auction or handled according to relevant State rules.235
5.2.7. Limitation periods
The limitation period applicable to administrative punishment is two years from the date when the unlawful act took place or, if it is of a continuous nature, from the date when the unlawful acts terminate.236
5.2.8. Liabilities of administrative organs and of their personnel
In any of the following situations, a higher organ may order a lower organ under its aegis to rectify the situation:
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Personnel of administrative organs that divert fines for their own use or accept bribes are subject to administrative penalties and in serious cases they are liable to criminal charges.238
Administrative organs that cause losses by using or damaging seized property are liable to pay compensation, and persons directly in charge and other personnel held directly responsible for the matters are subject to administrative punishment.239
Administrative organs that cause damage to citizens or their property or inflict losses on legal persons or other organizations by unlawful conduct during inspection or enforcement procedures are liable to pay compensation.240
If law enforcement officers are so negligent in carrying out their duties that illegal acts have gone unchecked and unpunished, the persons directly in charge and other directly responsible personnel are given administrative sanctions and, in serious cases, they may be charged under the criminal law.241
5.3. Case study of a regulated activity: the legal profession
It is generally considered that no legal profession ever developed in dynastic China. As rules of prosecution of claims before the courts did exist, and violations could give rise to punishments there arose a “profession” of the so-called “litigation tricksters” (song gun) during the Ming and Qing dynasties.
Sun Zhongshan’s (Sun Yatsen) plan for legislating with respect to lawyers never came to fruition during his brief exercise of power in 1912. Under his successor, Yuan Shikai, the government issued that same year the Provisional Regulations on Lawyers, the Provisional Regulations on the Registration of Lawyers and other detailed rules with respect to the legal profession. For the first time, a profession of persons specialized in the representation of others before the courts was instituted. In 1917, reforms to the legislation acknowledged lawyers’ work in drafting contracts and other legal documents. In 1913, there were only some 1,700 lawyers registered with the Ministry of Justice. By 1935, the number had reached 10,249, but by 1943 it had dropped to 9,245. Given China’s population of the time, the overall ratio of lawyers to the population was one per 50,000.
After the establishment of the PRC on October 1, 1949, the Guomindang (Nationalist) legal system was abolished.242
The General Principles of People’s Courts, issued by the central government in 1950, the 1954 Constitution and the Organic Law of the People’s Courts stipulated the right of an accused person to be defended by a lawyer.
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In July 1954, the Ministry of Justice authorized Beijing, Shanghai and a few other large cities to establish legal advice offices. In January 1956, a Ministry report recommended the enactment on a national level of rules governing the practice of law243 and in 1957 the Provisional Regulations on Lawyers were adopted. As of June 1957, 19 lawyers’ associations and 817 legal advice offices had been established. There were about 2,500 full-time lawyers and 300 adjunct lawyers working in 33 cities in China. Lawyers had the status of public servants and private law firms were not allowed. The professional tasks of lawyers included representation before the courts in criminal and civil matters as well as the rendering of opinions and the drafting of documents.
In the middle of 1957, the Anti-Rightist Movement sent many lawyers to the countryside. In 1959, the Ministry of Justice was dismantled and lawyers’ organizations were also soon abolished.
By the time of the inception of the reform movement, the legal profession had disappeared. Never well regarded in the Communist pantheon of professions, and even banned during the Cultural Revolution, the legal profession, by 1978, had been reduced to a few thousand members in all China, many of whom worked part time only. During this period, only Beijing University continued to offer law classes to its students.
The need for change was recognized early in the reform process. In September 1979, the Ministry of Justice was re-instituted with among its missions to take charge of the administration of the legal profession. In 1980, the Provisional Regulations with respect to Lawyers cast lawyers in the role of State workers who were expected to give priority to their duty to protect socialism and the Chinese State over their duties toward their clients. By 1984, there were some 11,000 lawyers practising in China.
In 1986, the Ministry of Justice fostered the creation of the All China Lawyers Association (Quanguo Lushi Xiehui) as a non-governmental organization intended to assume much of the administrative control over the profession.
Since 1986, a national bar examination has been administered by the Ministry of Justice, initially on a biannual basis, and annually since 1993. In 1986, 11,024 candidates wrote the examination, while in 1996 the number of candidates amounted to 127,000.
Until 1988, only State-owned law firms were allowed to practise law. The first cooperative law firm appeared in Baoding city in Hebei province. In May 1988, the Ministry of Justice adopted the Trial Scheme for Co-operative Law Firms that gave these firms legitimacy. In 1993, the Ministry of Justice issued Proposals on Deepening Lawyers’ Reform, which instituted partnership law firms.
In 1993, the Ministry developed the Code of Professional Ethics and Discipline for Lawyers that prohibits an array of sharp practices and provides for payment of compensation for breaches of duties to clients.
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After seven years of preparation, a national Law with respect to Lawyers was adopted on May 15, 1996 by the 19th Session of the Standing Committee of the Eighth NPC that entered into effect on January 1, 1997. It was amended on December 29, 2001 by the 25th Session of the Standing Committee of the Ninth NPC. It has been most recently amended by the 30th Session of the Standing Committee of the Tenth NPC on October 28, 2007 with effect as of June 1, 2008.
By 1996, China had 90,000 lawyers distributed among some 7,200 law firms, of which 5,500 were State-funded, 500 were formed as cooperatives and 1,200 were partnerships.244
A Ministry of Justice Report of June 2005 estimated that there were then some 103,389 full-time lawyers, 6,841 part-time lawyers, 1,817 lawyers in administrative departments, 733 in-house counsel, 1,750 military lawyers, and 4,768 legal aid lawyers and about 30,000 paralegals (lüshi fuzhu renyuan).245 The same authors counted 11,691 law firms, including some 8,000 partnerships (hehuo lüshi shiwusuo), 1,746 cooperative firms (hezuo lushi shiwusuo), and 1,742 state funded/established (guojia chuzisheli de lüshi shiwusuo). There are also some 17,000 notaries.
According to various sources, some 360,000 candidates wrote the bar admission exams in 2002, of which only 24,000 were admitted.
The government’s aim is that around 50% of all practising lawyers should hold a bachelor’s degree (xueshi) in law; that 30% under the age of 40 in large and mediumsized cities and economically developed coastal areas should possess a master’s degree (shuoshi), and that the educational system should spawn some 10,000 lawyers of special expertise in economics and foreign languages.
Still, the level of training of Chinese lawyers remains low, with as few as one fifth of all lawyers having obtained a university degree in law.246
And the official figures betray the failure to have achieved the government’s announced objectives for increases in the number of lawyers. The official goal in 1996 was to reach 150,000 lawyers by the year 2000 and 300,000 by the year by 2010.
According to the Ministry of Justice, in 2006, there were 130,000 lawyers working in 13,000 law firms. In that year, they handled some 1.8 million cases before the courts and 1.15 million non-litigation cases. Legal aid was provided in more than 5.2 million cases.
Even then, the ratio of lawyers to the population would be less than 3 per 10,000 persons, whereas in the United States, at the other extreme, there are in excess of 30 lawyers per 10,000 members of the population.247
In China, notaries carry out activities similar to those of notaries in continental Europe. They do so principally as agents of the government, though efforts are currently deployed to liberalize the profession.
In 1998, there were 214 universities offering legal education among more than 1,000 universities in China, with about 80,000 students studying law (accounting for 2.5% of all students in higher education institutions); there are over 150 continued higher legal education institutions, with around 86,000 students.248
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In 2006, the Central Committee of the Communist Party of China and the State Council announced a five-year plan of legal education of the public every Thursday and called on localities to implement the plan in accordance with local conditions.
Still, the quality of legal education has become the target of criticism after reliable reports that candidates presenting the bar exam without having gone to law schools are surpassing the results of their better educated competitors.
5.3.1. The national regulatory framework applicable to legal services
Article 2 of the Lawyers Law defines lawyers as “professionals who have obtained through legal means a licence to provide legal services”.249
The role of lawyers consists in the protection of the rights and interests of the parties to a suit and in the promotion of the proper implementation of the law.250
Practising lawyers must abide by the Constitution and laws and adhere to the code of ethics and professional discipline for lawyers. The basis for their professional practice lies in the facts and the law.251
Lawyers practise their profession independently of the government and of the judiciary and procuratorates. They must also remain independent of their clients. On the other hand, lawyers have been subjected to sanctions in the context of their representation of expropriated peasants and of Christians for practising their religion outside the State-approved structures.
To be admitted to practise, lawyers must first obtain professional qualifications and apply for a licence after a period of internship.
Article 6 of the Lawyers Law provides that candidates may qualify for the bar by passing a national exam or through approval by judicial authorities. Persons with a three-year college education in law or above or with equivalent qualifications, as well as those with a bachelor’s degree and above in other disciplines may qualify as lawyers after passing the national examination.”252
5.3.1.1. Licence to practise law
Registration of legal practitioners is administered by the judicial authorities above the judicial bureau at the provincial level.253
The local judicial authorities must render an opinion within 15 days of receipt of a complete application and report the matter to the judicial authorities at the provincial level. They communicate their decision within 30 days of receipt of the application. Decisions of rejection must contain their reasons.
Lawyers must renew their practising licence once a year.
Unregistered licences are not valid.
Lawyers may only practise with one law firm at a time. Chinese law firms are not subject to any geographical restrictions.254
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The following are disqualified from practising the legal profession:
Holders of government office may not concurrently be practising lawyers. While serving on the standing committee of people’s congresses at any level, lawyers are prohibited from practising.256
Unlicenced persons may not practise law or represent clients for profit.257
Persons engaging in the teaching of law and legal research may not become partners or participants in law partnerships or cooperative firms.
5.3.1.2. Licences for law firms
Until the 2007 amendment to the Law with respect to Lawyers, the law firm was the basic unit for regulation of the legal profession. But in fact, many lawyers were already conducting individual practices and the amendment formally accepts their existence. In future, practitioners with five years’ experience will be authorized to open and operate single-lawyer law offices. Practicing lawyers act on behalf of their law firms and they practice in their name.258
The Law provides for three forms of law firms: State-funded, cooperative firms and partnership firms, which vary in terms of their operations and obligations. State-funded law firms assume liabilities with all their assets.259 Cooperative law firms answer for their debts on all their assets.260 In partnerships, partners assume unlimited and joint liabilities for their firm.261
Law firms must dispose of assets worth more than RMB 100,000.262
Applications to establish law firms are reviewed by judicial authorities at the provincial level or above and licences are issued to applicants who meet the requirements of the Law. The applicant must be notified in writing within 30 days of receipt of a rejected application.263
Law firms may set up branch offices subject to approval by local judicial authorities at the provincial level where the branch office is to be established. A parent law firm is liable for its branch offices.264 They must report to the original approval authorities any alteration of their name, their location, and their articles of association or partnership agreements, as well as any decision to dissolve the firm.265
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Lawyers carry on their activities through their firms and they should conclude written contracts with their clients, charge them fees in compliance with State regulations and faithfully record their fees in their accounts.266
Law firms and lawyers are prohibited from committing acts of unfair competition such as defaming other lawyers or paying commissions for referrals.267
5.3.1.3. Transformation of law firms
The Law with respect to lawyers provides for the severing of links between law firms and government departments.
The disposal of State assets in law firms was based on the principle of “whoever invests owns the property”.268
5.3.1.4. Rights and obligations of law firms
Lawyers may engage in the following activities:
When handling cases, lawyers are expected to undertake investigations of facts.
They are free to refuse to represent any client.
Lawyers must respect the code of ethics and professional discipline.
They must participate in the provision of legal aid.
Lawyers must not disclose State secrets, must keep confidential commercial secrets of which they learn in the course of their practice and must respect the privacy of their clients. They must not abuse parties to a dispute by taking advantage of their position to obtain money or gifts. They should not meet judges or prosecutors in violation of the applicable rules. They may not bribe judges, prosecutors, arbitrators and related personnel nor instigate their clients to do so.270
Lawyers should not commit perjury, hide facts, threaten or prompt others to commit perjury or otherwise interfere in the lawful collection of evidence.271
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The 2007 amendment to the Law with respect to Lawyers is officially touted as an improvement in lawyers’ working conditions, in particular in the context of the defense of criminal cases.
Under the amended article 37, opinions and remarks made by lawyers in court are immune from prosecution, except for threats to national security, slander and courtroom disruptions. Article 40 prohibits lawyers from “inciting or abetting parties to engage in disturbing public order, threatening public security, and other illegal methods to resolve grievances”.
5.3.1.5 Bar associations
Article 37 of the Law with respect to Lawyers defines bar associations as “non-governmental organizations enjoying the status of legal entities”. They are disciplinary bodies with jurisdiction over lawyers. They are subject to supervision by the judicial authorities. The same article provides for a China National Bar Association and local bar associations set up at the provincial level.272 Lawyers must join a local bar association.273
Bar associations should perform the following duties:
Bar associations should reward or penalize lawyers in accordance with their constitution or bylaws.
5.3.1.6. Code of ethics
On October 6, 1996, the national bar association adopted a Code of Ethics obliging lawyers to always be client-oriented, to safeguard the legality of the State and social justice, to be honest and trustworthy, to dutifully provide legal assistance to clients, to respect each other and engage in fair competition, to be upright and self-disciplined, to be loyal to the legal profession and to maintain the reputation of lawyers.
Lawyers may not charge exorbitant fees.
The Ministry of Justice on October 22, 1992 published penalties for lawyers who breach their codes of ethics and professional discipline. These include warnings, suspensions of activity and disbarment.
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Sanctions against lawyers are enforced by discipline committees under the aegis of the judicial authorities above the prefecture, city and county level. The committee should include practising lawyers, lawyers’ associations and judicial personnel.
5.3.2. The regulation of foreign law firms
Foreign lawyers first began to practise in China after the Opium War.275 From their base within the settlements, they eventually expanded outward and even represented clients before Chinese courts. Over the following century, their numbers grew, but after the Communist Revolution, they all closed.
It was only in 1992 that foreign law firms were officially allowed to offer consulting services in China in connection with international or foreign laws. In the meantime, a number of firms had established representative offices.
By 1997, law firms from Australia, Canada, France, Germany, Great Britain, Japan, and the United States had been authorized to establish offices in China. Most had been located in Beijing (26) and in Shanghai (16) but others had opened practices in Guangzhou, Shenzhen, Haikou and Suzhou.276
Legal services were on the agenda of negotiators of China’s accession to the WTO in 2001. The Council of the Bars and Law Societies of the European Union called upon China “to allow foreign law firms to advise on home country, any third country and international law” as well as “to allow Chinese lawyers working for foreign law firms to advise on Chinese law”. The American negotiators attempted unsuccessfully to obtain the right for their professionals to advise on Chinese law.277
In December 2001, the State Council promulgated the Regulations on Administration of Foreign Law Firms’ Representative Offices in China (the Foreign Law Firm Regulations).278 They apply to foreign law firms and the legal service activities they conduct. Foreign law firms may only set up “representative offices”.279
Article 23 of the Foreign Law Firm Regulations obliges the judicial administration departments in collecting fees for registering representative offices and their representatives and those for conducting annual examination strictly to follow the same standards as are applied to Chinese law firms and practising lawyers. Decisions to impose fines and their collection are separate functions. All fines collected and illegal income confiscated are turned over to the State.
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5.3.2.1. Legal services in the WTO Accession Protocol
Under the terms of the Specific Commitments made by the PRC with respect to legal services,280 foreign law firms may only open representative offices in Beijing, Shanghai, Guangzhou, Shenzhen, Haikou, Dalian, Qingdao, Ningbo, Yantai, Tianjin, Suzhou, Xiamen, Zhuhai, Hangzhou, Fuzhou, Wuhan, Chengdu, Shenyang and Kunming. Such offices may engage in profit-making activities. Foreign law firms may be limited to a single representative office in China. These geographic and quantitative limitations were to be eliminated by 2002 and have been.
The Accession Protocol provides a precise definition of the scope of authorized activities of foreign representative offices:
The representatives of a foreign law firm must be practising lawyers who are admitted to the bar in a WTO member-country and have practised for no less than two years outside of China. The chief representative must be a partner or equivalent of a law firm of a WTO member and have practised for no less than three years.
5.3.2.2. Qualifications of foreign law firms
The establishment of a representative office in China and the posting of representatives by foreign law firms is subject to approval of the Ministry of Justice. No foreign law firms, other organizations or individuals may carry on legal service activities within the territory of China as a consulting firm or under any other names.281
To qualify to set up a representative office, a foreign law firm must meet the following conditions.
It must be lawfully in practice in its home country and must never have been punished for a violation of lawyers’ professional ethics or disciplinary rules.
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The representatives of the representative office must be practising lawyers who are members of the bar of the country where they obtained their qualifications to practise. They must have practised for not less than two years outside of China, and they must have never been punished for a criminal offence or a violation of lawyers’ professional ethics or disciplinary rules. Furthermore, the chief representative must have practised for not less than three years outside of China and be a partner or equivalent of the firm.
There must be an actual need for the foreign firm to set up a representative office in China to conduct legal service business.282
5.3.2.3. Licences for foreign lawyers
Applications from foreign law firms for licences are filed with the people’s governments at the provincial level, which must, within three months from receipt, render an opinion and forward the file to the Ministry of Justice for re-examination. The latter makes a decision within six months. If the answer is positive, the applicant receives a licence, as do its representatives; if permission is not granted, the applicant is informed in writing of the reasons.283
After obtaining their licences to practise, foreign law firms must register their representative offices with the judicial administration department of the people’s government at the provincial level that must complete the registration within two days. Representative offices and their representatives must renew their registrations annually.284 The name of representative institutions should be in the form of “Representative Office of xx Law Firm (Chinese translation of the name of a foreign law firm applying for setting up branch in China) in xx (name of a Chinese city).”
In the event of mergers, partitions or posting of new representatives, a representative office must accomplish the same formalities as for its establishment.285 Where the situation of a foreign law firm or any of its representatives evolves such that it is no longer qualified under the Foreign Law Firm Regulations, the Ministry of Justice may revoke the concerned licence.286
When a representative office’s registration is cancelled, it is liquidated and, pending payment of its liabilities, its property may not be transferred out of the territory.287
5.3.2.4. Business scope and practice rules
Foreign law firms’ representative offices must “scrupulously observe the professional ethics and practise discipline of Chinese lawyers”.288
Their parent foreign law firms assume civil liability for their activities within the territory of China.289 Representative offices and their representatives may conduct the activities covered by commitments in the WTO Accession Protocol. Foreign law firms may not practise Chinese legal affairs. They may directly instruct lawyers in Chinese law firms.290
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Representative offices may not employ Chinese practising lawyers and their support staff may not provide legal services to clients.291
They may not provide false evidence, conceal facts, intimidate or induce others with promises of gain to provide false evidence or conceal facts or obstruct their opposing party’s lawful obtaining of evidence. They may not accept money or other items of value from parties for abusing their role as lawyer and they may not disclose commercial secrets or private matters of parties.292
No representative of a foreign law firm may carry on concurrently full-time or part-time employment in more than one representative office.293
Representatives of a representative office must reside in China for not less than six months each year, lest their registration not be renewed in the following year.294
Fees charged by representative offices must be settled within the territory of China.295
The Ministry of Justice and the judicial administration departments of the people’s governments at the provincial level are responsible for the supervision and administration of foreign lawyers.
Before March 31 of each year, representatives of foreign law firms must submit to the judicial administration department of the peoples’ government at the provincial level:
The judicial administration departments of the people’s governments upon completion of their reviews send the files on to the Ministry of Justice.297
5.3.2.5. Sanctions
If foreign lawyers or law firms illegally provide legal services, the judicial administration department at the provincial level may order them to suspend their activities and, in serious circumstances, their lawyer’s licences may be revoked, their illegal income confiscated and they may be exposed to fines of not less than RMB 50,000 but not more than RMB 200,000.298
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Where any of the following events occurs with respect to a foreign law firm’s representative office, the judicial administration department at the provincial level may issue a warning and a remedial order; if the circumstances are serious, its activities may be suspended or its licence revoked:
If foreign lawyers or law firm representative offices commit any of the following acts, the judicial administration department of the people’s government at the provincial level issues a warning, confiscates any illegal income and imposes fines of not less than RMB 20,000 but not more than RMB 100,000:
Where a representative office whose registration is cancelled transfers its property out of the territory before clearing its liabilities, the judicial administration department of the people’s government at the provincial level orders the return of the property. If other persons’ interests are seriously violated, the chief representative of the representative office and other persons directly responsible are exposed to criminal pursuits for concealing property. If the case does not justify criminal pursuits, the judicial administration department imposes a fine of not less than RMB 50,000 but not more than RMB 300,000 on the representative office and a fine of not less than RMB 20,000 but not more than RMB 100,000 on the chief representative and other persons directly responsible.300
If foreign lawyers provide false evidence, conceal facts or intimidate or induce others with promises of gain to do so, they may be pursued for the criminal offence of obstruction and their licences to practise may be revoked by the Ministry of Justice.301
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Where a foreign law firm, a foreign lawyer or any other foreign organization or individual carries on without permission the activity of providing legal services within the territory of China, the judicial administration department of the people’s government at the provincial level prohibits the activities, confiscates the illegal income, and imposes fines of not less than RMB 50,000 but not more than RMB 300,000 concurrently.302
Where the licence to practise of a representative office is revoked, its parent law firm is prohibited from establishing another representative office in China for five years. Where a foreign lawyer’s licence to practise is revoked, he/she is prohibited from serving as a representative of any representative office in China for five years.303
Where representatives of foreign law firms are punished under the criminal law for endangering State security, public security or the administration of public order in China, they are prohibited for life from serving again as representative and their foreign law firm is prohibited from establishing another representative office in the future.304
When judicial administration staff are derelict in their duties with regard to the regulation of foreign lawyers, they are subject to disciplinary measures such as demotions, revocation from their post or dismissal from public service and, in serious cases, they may be pursued under the criminal law for abuse of power, negligence of duty or acceptance of bribes.305
1 Articles 57 and 58 of the Constitution.
2 People’s Daily Online, http://english.people.com.cn/data/organs/cpc.html. At the end of 2004, the Party had 69.6 million members. In 1995, the Party had 52 million members corresponding to just over 4% of the country’s population.
3 The number of members and of alternates of the Central Committee is decided by the National Congress. In 1995, it was comprised of 189 full members and 130 alternates.
4 The names of these corporations often include the word China, such as China International Trust and Investment Corporation (CITIC).
5 The Provinces are Anhui, Fujian, Gansu, Guangdong, Guizhou, Hainan, Hebei, Heilongjiang, Henan, Hubei, Hunan, Jilin, Jiangsu, Jiangxi, Liaoning, Qinghai, Shaanxi, Shandong, Shanxi, Sichuan, Yunnan, and Zhejiang.
6 For instance, in Xinjiang Autonomous Region, there are autonomous prefectures that include prefectoral administrative offices which themselves encompass counties and cities, within which there are townships, ethic townships and towns.See Yang Fengchun, Chinese Government, Foreign Languages Press, Beijing, 2004, p. 252.
7 The Gazette of the Supreme People’s Court (zui gao renmin fayuan gongbao) has selected model cases judged by people’s courts and commented them as a guide to judicial practice. Scholarly works, though not sources of law in the Chinese system, are invoked before arbitral tribunals.
8 The PRC’s first Constitution was adopted in 1954; it contained 106 articles of which 19 consecrated citizen’s rights. The 1975 Constitution reflected the Maoist emphasis on political issues with the elimination of the procuratorate, the removal of the prior Constitution’s articles on citizen rights and an overall reduction of the text to only 36 articles. After the launch of the Reform Movement, a new Constitution was adopted in 1978 to begin the return to a constitutional model closer to that of 1954. This goal was largely achieved with the adoption of the Constitution of 1982. The basic structure of the Chinese State has remained intact throughout the Constitution’s evolution.
9 Article 5 of the Constitution that was adopted and promulgated on December 4, 1982 at the Fifth Session of the Fifth NPC and entered into effect on the same date; it was amended by the First Session of the Seventh NPC on April 12 1988, by the First Meeting of the Eighth NPC on March 29, 1993, by the Second Session of the Ninth NPC on March 15, 1999, and by the Second Session of the 10th NPC, on March 14, 2004.
10 Article 6 of the Constitution.
11 Articles 10, 11 and 13 of the Constitution.
12 Articles 18 and 32 of the Constitution.
13 Article 3 of the Constitution.
14 Article 2 of the Constitution.
15 Article 3 of the Constitution.
16 Article 3 of the Constitution.
17 Article 3 of the Constitution.
18 Article 4 of the Constitution.
19 This choice of the rule of law is a reversal of positions from the Maoist era and also harkens back to the millenary debate between the Confucianists’ attachment to ethics and the Legalists’ reliance upon law to govern society.
20 Article 7 of the Constitution.
21 Article 8 of the Constitution.
22 Article 9 of the Constitution.
23 Article 10 of the Constitution.
24 Article 10 of the Constitution.
25 Article 10 of the Constitution.
26 Article 11 of the Constitution.
27 Article 13 of the Constitution.
28 Article 16 of the Constitution.
29 All autonomous regions, autonomous prefectures and autonomous counties are national autonomous areas, article 30 of the Constitution.
30 For instance, article 52 of the Constitution imposes on citizens a duty to safeguard the unity of the country and the unity of all its nationalities, and according to article 53 they must respect State secrets, protect public property and observe labour discipline, public order and social ethics.
31 Article 35 of the Constitution.
32 Article 38 of the Constitution.
33 Article 40 of the Constitution.
34 Article 41 of the Constitution.
35 Article 48 of the Constitution.
36 Article 57 of the Constitution.
37 Article 58 of the Constitution.
38 Article 59 of the Constitution.
39 Article 60 of the Constitution.
40 Article 61 of the Constitution.
41 Article 69 of the Constitution.
42 Article 79 of the Constitution.
43 Article 80 of the Constitution.
44 Article 81 of the Constitution.
45 Article 85 of the Constitution.
46 Article 88 of the Constitution.
47 Article 86 of the Constitution.
48 Article 87 of the Constitution.
49 Article 89 of the Constitution.
50 Article 90 of the Constitution.
51 Article 91 of the Constitution.
52 Article 92 of the Constitution.
53 Article 93 of the Constitution.
54 Article 95 of the Constitution.
55 Article 97 of the Constitution.
56 Article 98 of the Constitution.
57 Article 99 of the Constitution.
58 Article 100 of the Constitution.
59 The election or recall of chief procurators is reported to the chief procurators at the next higher level for submission to the standing committees of the people’s congresses at the corresponding level for approval, article 101 of the Constitution.
60 Article 103 of the Constitution.
61 Article 104 of the Constitution.
62 Article 110 of the Constitution.
63 Article 105 of the Constitution.
64 Article 106 of the Constitution.
65 Article 108 of the Constitution.
66 Article 109 of the Constitution.
67 Article 110 of the Constitution.
68 Article 111 of the Constitution.
69 Article 113 of the Constitution.
70 Article 114 of the Constitution.
71 Those of autonomous prefectures and counties are submitted to the standing committees of the people’s congresses of their provinces or autonomous regions for approval before they go into effect, article 116 of the Constitution.
72 Article 117 of the Constitution.
73 Article 118 of the Constitution.
74 Article 119 of the Constitution.
75 Article 120 of the Constitution.
76 Article 121 of the Constitution.
77 Articles 123 and 124 of the Constitution.
78 Article 126 of the Constitution.
79 Article 125 of the Constitution.
80 Article 127 of the Constitution.
81 Article 128 of the Constitution.
82 The presidents and judges of the other courts are appointed by the people’s congresses and their standing committes at the same level.
83 Article 124 of the Constitution.
84 Article 134 of the Constitution.
85 Article 129 of the Constitution.
86 Article 132 of the Constitution.
87 Article 132 of the Constitution.
88 Article 133 of the Constitution.
89 Article 131 of the Constitution.
90 Following upon the conclusion in 1842 of the Nanking Treaty with Britain, the Qing Emperor concluded a concession treaties with the United States and some 17 other countries (Russia, France, Sweden, Norway, German Customs Union, Denmark, The Netherlands, Spain, Belgium, Italy, Austria-Hungary, Peru, Brazil, Portugal, Japan, Mexico and Switzerland).
91 The most renowned incident involved the American vessel Emily that was obliged in 1821 to turn over a crewmember to the Chinese judicial authorities for having accidentally killed a Chinese citizen. The sailor was tried under Chinese law and executed, even though such a sentence was probably not conform with local law, which did not stipulate capital punishment for accidental deaths.
92 Article of the 8 Basic Law.
93 Article of the 84 Basic Law.
94 Article of the 85 Basic Law.
95 Article of the 88 Basic Law.
96 Article of the 82 Basic Law.
97 Article of the 9 Basic Law.
98 For instance, a memorandum of the President of the United States dated December 30, 1978 provides that all programmes with the people of Taiwan will be carried out through “an unofficial instrumentality in corporate form”.
99 The State Council Working Group for Reorganizing Law and Regulation recognized the incoherence of the designations that should, but do not, provide a guide as to their source and rank in the hierarchy of norms.
100 It was adopted at the Third Session of the Ninth NPC and it entered into effect on July 1, 2000.
101 Article 3 of the Legislation Law.
102 Article 6 of the Legislation Law.
103 Article 7 of the Legislation Law.
104 Article 8 of the Legislation Law.
105 Article 9 of the Legislation Law.
106 Article 12 of the Legislation Law.
107 Article 23 of the Legislation Law.
108 Article 24 of the Legislation Law.
109 Article 34 of the Legislation Law
110 Article 35 of the Legislation Law.
111 Article 40 of the Legislation Law.
112 Article 22 of the Legislation Law.
113 Article 42 of the Legislation Law.
114 Article 43 of the Legislation Law.
115 Article 47 of the Legislation Law.
116 Article 46 of the Legislation Law.
117 Article 51 of the Legislation Law.
118 Article 52 of the Legislation Law.
119 This is the version that prevails in the event of any conflicts.
120 Article 52 of the Legislation Law.
121 Article 53 of the Legislation Law.
122 Article 57 of the Legislation Law.
123 Article 58 of the Legislation Law.
124 Article 60 of the Legislation Law.
125 Article 61 of the Legislation Law.
126 The version appearing on the State Council Bulletin shall be the standard version, article 62 of the Legislation Law.
127 The Standing Committee must answer within four months, article 63 of the Legislation Law. A major city refers to cities where the people’s government of a province or autonomous region is seated, cities where special economic zones are located, and any other major cities approved by the State Council.
128 Article 64 of the Legislation Law.
129 Article 64 of the Legislation Law.
130 Article 66 of the Legislation Law.
131 Article 67 of the Legislation Law.
132 Article 65 of the Legislation Law.
133 Article 72 of the Legislation Law.
134 Article 73 of the Legislation Law.
135 Article 76 of the Legislation Law.
136 The published version prevails in the event of any conflicts, article 77 of the Legislation Law.
137 Article 77 of the Legislation Law.
138 Article 83 of the Legislation Law.
139 Article 78 of the Legislation Law.
140 Article 79 of the Legislation Law.
141 Article 80 of the Legislation Law.
142 Article 81 of the Legislation Law.
143 Article 82 of the Legislation Law.
144 Article 84 of the Legislation Law.
145 Article 85 of the Legislation Law.
146 Article 86 of the Legislation Law.
147 Article 88 of the Legislation Law.
148 Article 88 of the Legislation Law.
149 Article 88 of the Legislation Law.
150 Article 86 of the Legislation Law.
151 Article 86 of the Legislation Law.
152 Article 88 of the Legislation Law.
153 Article 88 of the Legislation Law.
154 Article 88 of the Legislation Law.
155 Article 90 of the Legislation Law.
156 Article 90 of the Legislation Law.
157 The Administrative Law was adopted at the Fourth Session of the Standing Committee of the 10th NPC on August 27, 2003 and it was promulgated and entered into effect on July 1, 2004.
158 Articles 2 and 3 of the Administrative Licence Law.
159 Article 5 of the Administrative Licence Law.
160 Article 7 of the Administrative Licence Law.
161 Article 8 of the Administrative Licence Law. The administrative recourses are presented in the chapters entitled Administrative Remedies and Litigation.
162 Article 9 of the Administrative Licence Law.
163 Article 12 of the Administrative Licence Law.
164 Article 14 of the Administrative Licence Law.
165 Article 12 of the Administrative Licence Law.
166 Article 15 of the Administrative Licence Law.
167 Article 15 of the Administrative Licence Law.
168 Article 16 of the Administrative Licence Law.
169 Article 19 of the Administrative Licence Law.
170 Article 22 of the Administrative Licence Law.
171 Article 23 of the Administrative Licence Law.
172 Article 24 of the Administrative Licence Law. No further delegations are permitted.
173 Article 27 of the Administrative Licence Law.
174 Article 27 of the Administrative Licence Law.
175 Article 29 of the Administrative Licence Law.
176 Article 30 of the Administrative Licence Law.
177 Article 32 of the Administrative Licence Law.
178 Article 36 of the Administrative Licence Law.
179 Article 38 of the Administrative Licence Law.
180 Article 40 of the Administrative Licence Law.
181 Article 41 of the Administrative Licence Law.
182 By virtue of article 82 of the Administrative Licence Law, the time limit for the administrative organs to implement an administrative licence is calculated in working days, not including legal holidays and leaves.
183 Article 42 of the Administrative Licence Law.
184 Article 44 of the Administrative Licence Law.
185 Article 46 of the Administrative Licence Law.
186 Article 47 of the Administrative Licence Law.
187 Article 48 of the Administrative Licence Law.
188 Article 49 of the Administrative Licence Law.
189 Article 53 of the Administrative Licence Law.
190 Article 60 of the Administrative Licence Law.
191 Article 62 of the Administrative Licence Law.
192 Article 63 of the Administrative Licence Law.
193 Article 64 of the Administrative Licence Law.
194 Article 65 of the Administrative Licence Law.
195 Article 67 of the Administrative Licence Law.
196 Cancellations are not implemented if they would seriously impair the public interests, article 69 of the Administrative Licence Law, article 69 of the Administrative Licence Law.
197 Articles 71 and following of the Administrative Licence Law.
198 Articles 72 and 73 of the Administrative Licence Law.
199 Article 75 of the Administrative Licence Law.
200 Article 76 of the Administrative Licence Law.
201 Article 77 of the Administrative Licence Law.
202 Article 79 of the Administrative Licence Law.
203 Article 80 of the Administrative Licence Law.
204 The Administrative Punishment Law was adopted at the Fourth Session of the Eighth NPC on March 17, 1996.
205 Article 3 of the Administrative Punishment Law.
206 Article 4 of the Administrative Punishment Law.
207 Article 6 of the Administrative Punishment Law.
208 Article 7 of the Administrative Punishment Law.
209 Article 9 of the Administrative Punishment Law.
210 Article 10 of the Administrative Punishment Law.
211 Articles 11 and 12 of the Administrative Punishment Law.
212 Article 16 of the Administrative Punishment Law.
213 Article 17 of the Administrative Punishment Law.
214 Article 18 of the Administrative Punishment Law. Such organizations may not sub-delegate their powers to administer punishments.
215 Article 19 of the Administrative Punishment Law.
216 Article 21 of the Administrative Punishment Law.
217 Article 22 of the Administrative Punishment Law.
218 Article 30 of the Administrative Punishment Law.
219 Article 31 of the Administrative Punishment Law.
220 Article 32 of the Administrative Punishment Law.
221 Article 33 of the Administrative Punishment Law.
222 Article 34 of the Administrative Punishment Law.
223 Article 35 of the Administrative Punishment Law.
224 Article 37 of the Administrative Punishment Law.
225 Article 23 of the Administrative Punishment Law.
226 Article 24 of the Administrative Punishment Law.
227 Article 27 of the Administrative Punishment Law.
228 Article 28 of the Administrative Punishment Law.
229 Article 45 of the Administrative Punishment Law.
230 Article 46 of the Administrative Punishment Law.
231 Article 47 of the Administrative Punishment Law.
232 Article 49 of the Administrative Punishment Law.
233 Article 50 of the Administrative Punishment Law.
234 Article 51 of the Administrative Punishment Law. Under article 52, parties experiencing economic difficulties may apply to the administrative department for an extension of the payment deadline.
235 Article 53 of the Administrative Punishment Law.
236 Article 29 of the Administrative Punishment Law.
237 Article 55 of the Administrative Punishment Law.
238 Article 58 of the Administrative Punishment Law.
239 Article 59 of the Administrative Punishment Law.
240 Article 60 of the Administrative Punishment Law.
241 Article 62 of the Administrative Punishment Law.
242 The Circular Concerning the Abolition of Underground Lawyers and Litigation Tricksters issued by the Ministry of Justice in December 1950, clearly abrogated the role of lawyers and dissolved all lawyers’ organizations.
243 Report Concerning Establishing Our Country’s Lawyers’ Work.
244 Reuters World Report, November 28, 1996.
245 Fazhibao, June 2005, http://www.legaldaily.com.cn/misc./2005-06/14/content_15498.htm
246 Xiao Yang, Reform of the lawyers’ system in China, p. 3, speech of October 15, 1993 cited in William P. Alford, Tasselled Loafers for Barefoot Lawyers: Transformation and Tension in the World of Chinese Legal Workers, The China Quarterly, March 1995, p. 22
247 Comtex Newswire, May 22, 1996.
248 The first government-sponsored law school in China was founded in 1906 under the direction of Shen Jiaben, who had undertaken an in-depth study of foreign law for the Imperial Commission on Law Reform constituted in 1902 by the Emperor Guangxu. In 1915, Soochow Law School was founded by Americans in Shanghai and it would become one of the most influential law schools of its time in China. Its graduates assumed prominent positions in the legal profession and in civic life during the Republican period. The school was closed in 1952. Gang Lin, China’s First Modern Lawyers, http://www.wilsoncenter.org/index.cfm?fuseaction=events.event_summary&event_id=3780.
249 Article 2 of the Law with respect to Lawyers.
250 Article 1 of the Law with respect to Lawyers.
251 Article 3 of the Law with respect to Lawyers.
252 Article 7 of the Law with respect to Lawyers provides that persons with a four-year college education and above in law who have engaged in law studies and teaching and hold a senior professional title or who have equivalent qualifications and who have applied for a practising licence may be granted lawyer’s qualifications subject to approval by the State Council judicial authorities.
253 If necessary, registration may also be administered by judicial bureaus at the prefectoral (city or county) level with authorization from higher judicial authorities.
254 Article 12 of the Law with respect to Lawyers.
255 Article 9 of the Law with respect to Lawyers.
256 Article 13 of the Law with respect to Lawyers.
257 Article 14 of the Law with respect to Lawyers.
258 Article 15 of the Law with respect to Lawyers.
259 Article 16 of the Law with respect to Lawyers.
260 Article 17 of the Law with respect to Lawyers.
261 Article 18 of the Law with respect to Lawyers.
262 Article 15 of the Law with respect to Lawyers.
263 Article 19 of the Law with respect to Lawyers. The text does not impose an obligation to explain refusals but the generally applicable rules do so.
264 Article 20 of the Law with respect to Lawyers.
265 Article 21 of the Law with respect to Lawyers.
266 Article 23 of the Law with respect to Lawyers.
267 Article 24 of the Law with respect to Lawyers.
268 Ministry of Commerce, Lawyer System, http://english.mofcom.gov.cn/aarticle/topic/bizchina/politicsandsociety/200510/20051000633564.html.
269 Article 25 of the Law with respect to Lawyers.
270 Article 33 of the Law with respect to Lawyers.
271 Article 35 of the Law with respect to Lawyers.
272 When appropriate, cities with districts may set up local bar associations.
273 Article 30 of the Law with respect to Lawyers.
274 Article 40 of the Law with respect to Lawyers.
275 Li Yuwen, Lawyers in China, A “flourishing” profession in a rapidly changing society?, China Perspectives n°27, January – February 2000, page 20, http://www.cefc.com.hk/uk/pc/articles/art_ligne.php?num_art_ligne=2702
276 Comtex Newswire, May 22, 1996.
277 Daniel Laprès, The European-Union-China WTO Accession Agreement, A Case Study in Diminishing Marginal Gains, China Business Review, Hong Kong, July – August 2000.
278 The Foreign Law Firm Regulations were adopted at the 51st Executive Meeting of the State Council on December 19, 2001, they were promulgated on December 22, 2001, and entered into effect as of January 1, 2002.
279 Article 2 of the Foreign Law Firm Regulations.
280 WTO, China Accession Protocol, http://209.85.135.104/search?q=cache:-ZCgOG2Dp9UJ:www.uschina.org/public documents/2005/05specificcommitment.doc+SCHEDULE+OF+SPECIFIC+COMMITMENTS+ON+SERVICES+LIST+OF+ARTICLE +II+EXEMPTIONS&hl=en&ct=clnk&cd=3&client=safari.
281 Article 6 of the Foreign Law Firm Regulations.
282 Article 7 of the Foreign Law Firm Regulations.
283 Article 9 of the Foreign Law Firm Regulations.
284 Article 10 of the Foreign Law Firm Regulations.
285 Article 12 of the Foreign Law Firm Regulations.
286 Articles 13 and 14 of the Foreign Law Firm Regulations.
287 Article 14 of the Foreign Law Firm Regulations.
288 Article 3 of the Foreign Law Firm Regulations.
289 Article 5 of the Foreign Law Firm Regulations.
290 Article 15 of the Foreign Law Firm Regulations.
291 Article 16 of the Foreign Law Firm Regulations.
292 Article 17 of the Foreign Law Firm Regulations.
293 Article 18 of the Foreign Law Firm Regulations.
294 Article 19 of the Foreign Law Firm Regulations.
295 Article 20 of the Foreign Law Firm Regulations.
296 Article 21 of the Foreign Law Firm Regulations.
297 Article 21 of the Foreign Law Firm Regulations.
298 Article 25 of the Foreign Law Firm Regulations.
299 The judicial administration department may impose a fine of not less than one time but not more than three times the money that should have been settled in the territory of China, article 26 of the Foreign Law Firm Regulations.
300 Article 28 of the Foreign Law Firm Regulations.
301 Article 29 of the Foreign Law Firm Regulations.
302 Article 30 of the Foreign Law Firm Regulations.
303 Article 31 of the Foreign Law Firm Regulations.
304 Article 31 of the Foreign Law Firm Regulations.
305 Articles 32 and 33 of the Foreign Law Firm Regulations.