Making China a Nation of Laws, Not Whims

A U.S. program to promote the rule of law in China has been welcomed in Beijing, but Congress has delayed appropriating the money needed to implement it. Presidents Bill Clinton and Jiang Zemin agreed last October to begin a series of “legal exchanges” in which Americans and Chinese would work together to improve judicial training, legal education, legal assistance to the poor, administrative law and commercial law in China. Failure to fund the program would disappoint Chinese law reformers and embarrass the United States, which proposed the idea in the first place.

U.S. policy toward China’s government should include more than complaints about human-rights abuses. It also should strongly encourage China to develop legal institutions. Linking that goal to China’s admission into the World Trade Organization (WTO) may be incentive enough for Beijing’s leaders.

The WTO includes most of the world’s trading nations. As signatories to the General Agreement on Tariffs and Trade (GATT), they have agreed to abide by certain rules when trading with each other. Among the many issues raised by China’s application to join the organization is whether it can satisfy the GATT requirement that all members administer their trade-related laws in a “uniform, impartial and reasonable manner.” China cannot meet this standard.

China’s courts, for example, are staffed by poorly trained judges, many of whom do not have law degrees. Because they are chosen and paid by local governments after receiving the approval of local Communist Party officials, judges often favor the interests of their locality in litigation, thereby weakening the impact of national laws. As a result, it is often difficult, if not impossible, for Chinese and foreigners to collect on judgments awarded by Chinese courts outside the location where enforcement is sought. Corruption, too, is extensive.

Chinese administrative law, to take another example, is extremely underdeveloped. Because the laws are only generally phrased, administrative agencies charged with enforcing them tend to draft their implementing regulations with an eye toward expanding their jurisdiction and powers. Worse yet, bureaucrats have the ultimate power to interpret their own rules, because, in China, courts have no higher status than administrative agencies: The courts defer to the agencies on interpretations of their rules. The Chinese Communist Party remains superior to both, and the result is a web of rules and practices both disorderly and far from transparent.

Although China has made some progress in establishing legal standards for administrative behavior and in granting affected parties, Chinese or foreign, the right to sue officials who violate the law, the system remains nascent and incomplete. For example, it is still not possible to sue an agency of the state for misusing its discretion. In the Chinese governmental scheme, legislative oversight theoretically should control this situation, but Chinese legislative bodies, national and local, have had little power. In the resulting legal vacuum, abuse of discretion by bureaucrats flourishes.

True, other members of the WTO often fail to meet the generally phrased GATT standard. But China falls far short of it. The steps that China would have to take to approach compliance are being negotiated. China already has agreed to publish laws before they take effect (formerly uncommon in Chinese legislative practice) and establish tribunals to hear complaints against administrative agencies. More specific agreement is required on the jurisdiction and powers of these bodies and on the standards they would apply to ensure that a system for effective impartial review of alleged administrative arbitrariness has been created.

The lingering inadequacies of Chinese law reflect the relative novelty of the country’s efforts to build legal institutions. Under Mao Tse-tung, such institutions hardly existed before the Cultural Revolution, and that cataclysm effaced them entirely. Legal reform did not begin until 1978. Since then, a vast amount of legislation has begun to create a legal framework for an economy in which state planning has declined dramatically. Much time and effort is still needed in order to elevate the role of courts, professionalize the judiciary and make the judicial system credible with the Chinese people.

For all its continuing efforts at legal reform, China should not be admitted to the WTO until it firmly commits itself to build the institutions necessary to meet GATT standards. Now and in the future, the connection between China’s conformity to WTO standards and Sino-U.S. cooperation on law ought to be clear. The proposed legal-exchange program has created an opportunity for the United States to assist China in its efforts to build a credible legal infrastructure. If the program is funded, it would enable legal professionals from China and the United States to work together to adapt Western legal institutions to Chinese circumstances and help to raise the level of Chinese legality across the board and not just in commercial matters. Whatever progress is made can only be slow, of course, but Americans, including Congress, should recall that centuries were required for the rule of law to be built in the West, as imperfect as it is. Even limited success can add impetus to legal--and political--reform.

The Clinton administration has requested that Congress include funds in the pending State Department budget bill, which would go to the Asia Foundation, to begin the legal-exchange program. Appropriations for the project have been totally eliminated by each house in their budget bills, but all or some could be restored in House-Senate negotiations.

Congress has a rare opportunity to add momentum to Chinese law-reform efforts. A certain amount of vision is needed. Will Congress have it?