There’s No Rushing China’s Slow March to a Rule of Law

Issues related to law increasingly dominate U.S.-China relations. Unfortunately, U.S. impatience with the pace of China’s efforts to establish a rule of law threatens to obscure what gains have been made. Furthermore, specific issues between the two nations, such as insistence that Beijing comply with bilateral agreements on intellectual property, textile labeling, export controls and restrictions on the use of nuclear technology should not be mixed up with demands by some U.S. politicians for an “immediate” legal system. Any realistic appraisal of China’s capacity to create a legal system must take a long view.

Since the onset of legal reform in 1978, China has made considerable progress toward creating legal institutions. Today, policies are generally expressed in legislation rather than in the party directives formerly used under Mao Tse-tung. A large and growing volume of laws and regulations has been pouring forth in a country in which a law library occupied only a few shelves 15 years ago. The emerging framework of rules governing commercial transactions helps to strengthen the stability of contracts among the Chinese themselves, as well as between the Chinese and foreigners. A recent revision of the country’s criminal code reduced much of its overtly political tone and moved toward establishing a presumption of innocence.

The Chinese courts, which had only symbolic significance before the Cultural Revolution and which were marginalized by that upheaval, have been reconstructed; efforts are underway to improve the training and selection of judges. China’s courts now handle more than 3.5 million civil and economic lawsuits yearly. New arbitration commissions have also been created to resolve commercial disputes.

One result is that the Chinese are slowly acquiring a consciousness of legal rights, which were unknown in traditional society and deformed by communism. China’s international commercial arbitration commission, which accepted nearly 1,000 Sino-foreign disputes last year, is now the world’s busiest international arbitration organization and enjoys a good reputation internationally.

Accordingly, the role of lawyers is increasing. China now has more than 40 law schools and 100,000 lawyers practicing law, some in firms that are not directly state-controlled. Reforms in criminal procedure have enlarged lawyers’ participation in the criminal process.

These accomplishments have created legal institutions, but not a legal system. There is no underlying principle that law is supreme. Although Chinese leaders talk about the rule of law, they seem to mean rule by law, which is to use rules as instruments to maintain social discipline rather than to limit the power of the state. The conflict between a rule of law and supremacy of the Chinese Communist Party has not even been addressed.

Clearly, the new legal institutions have a long way to go before they can inspire confidence. Many Chinese judges lack a legal education. The criminal process is still dominated by the police and remains politicized, especially when dissent is involved or crackdowns on crime are ordered. Because local courts are appointed and financed by local governments, “local protectionism” flourishes. In this Chinese version of hometown justice, local party and government officials frequently interfere in litigation that threatens the revenues of local enterprises in whose financial health local governments have a large stake. Chinese leaders regularly denounce this abuse but seem incapable of curbing it.

Localism affects foreigners involved in disputes even when they have been successfully arbitrated. If a foreign party prevails in arbitration, in China or abroad, against a Chinese business that refuses to pay an award, it must sue in a local Chinese court, but “local protectionism” may impede, even prevent collection of money damages awarded to the foreigner.

As might be expected, the professional ethics of lawyers and judges are still evolving in a society that traditionally lacked an autonomous judiciary or a bar. A crisis of values is evident in China. The old ideology is discredited, but no new value system has replaced it. Such an atmosphere is not conducive to the growth of cultural attitudes necessary to sustain legal institutions.

One of the worst problems is the absence of effective checks on the arbitrary use of administrative discretion that often nullifies the certainty that the new laws are supposed to create. All over China, as peasants and Sino-foreign joint venturers alike can testify, local officials impose arbitrary taxes and fees and administer policies in ways that violate central policies and laws. Administrative agencies draft their own rules and apply them with a discretion that cannot be questioned in Chinese courts. Although tentative first steps have been taken to allow citizens to sue government agencies, administrative law, which is at the core of the rule of law in the West, hardly exists in China today.

What should U.S. policy be in such circumstances? Regardless of how slowly domestic Chinese legality may grow, the United States should insist on Chinese compliance with international legal commitments undertaken under international treaties and should try to persuade Beijing to expand its adherence to widely recognized international practice.

On the other hand, the immaturity of China’s legality should be taken into account in formulating U.S. policy on China’s accession to the World Trade Organization (WTO). The WTO requires transparency in the legal systems of its members both by publishing laws that affect foreign trade and by administering them rationally and uniformly. Although more Chinese laws and regulations have recently been published, the lack of a coherent administrative law means that these rules are not being applied in a manner consistent with the WTO’s requirements. The United States should insist, as one condition for China’s entry into the WTO, that Beijing build administrative law and reduce local protectionism in the courts.

Members of Congress and U.S. policy-makers who are impatient for China to institute the rule of law might well reflect on how long it took the West to build a legal system. Otherwise, unrealistic expectations about China’s long march toward legality could sour U.S. policy, thereby undercutting its effectiveness. The high value that Americans place on the law should not be cheapened by the shrillness with which Washington trumpets its virtues.