Last year, China implemented the first comprehensive legal code in its 5,000 year history.  The Civil Code of the PRC (People’s Republic of China) consists of 1260 articles regulating personal and business life, including property law, inheritance, contracts, torts, and much more.  (Note: It does not include criminal law, which was discussed in a previous post in this blog.)

Here are a few examples from the section on marriage and the family:

• Adult children are required to financially support their parents. (Article 1067)
• If parents die or are unable to raise their children, elder brothers or sisters… have the duty to raise their minor siblings. (Article 1075) 
• Couples who file for divorce must observe a 30 day cooling off period. (Article 1077)
• A husband may not file for divorce during his wife’s pregnancy or within one year after his wife delivers.  (Article 1082) 
• Family members shall respect the elderly, take care of the young, help each other, and maintain a marital and familial relationship of equality, harmony, and civility. (Article 1043)

Wait a minute.  Could this really be the first comprehensive legal code in 5000 years of Chinese history?  Yes it could.

The Chinese do not have a long history of written laws or judicial precedents.  Instead, the  Confucian tradition “distrusted written laws and put their trust in people and innate human goodness.”

Relying on human goodness went much better some times than others.  It all depended on how good each ruler was.  In effect, for thousands of years “the law was whatever the emperor said it was, and there was no institutional body in China that could overcome his decrees.”

Western experts often refer to the Chinese system as “Rule BY law.”  In contrast, the Western system of “Rule OF law” implies “that there is a body of law that is superior to the current ruler, which constrains the ruler’s decision making… Traditionally, Chinese political philosophy emphasized an avoidance of conflict and maintenance of social harmony through deference to benevolent authority… Disputes were [handled]… on the local level by respected elders… Law and litigation were viewed as unnecessary [since]… government and society were fundamentally moral.”

Because of this tradition, a system that resembles Western courts has been slow to develop.  As late as 2013, China’s equivalent of the Chief Justice of the Supreme Court – Wang Shengjun – had no formal legal training whatever.  However, his replacement – Zhou Qiang, still President of the Supreme Court of China – had an M.A. in law and was part of the first generation of a dramatic expansion of law schools and graduates. 

The total number of lawyers in China increased from 2,000 in 1979, to over 522,000 in 2021, according to the latest report from China’s Ministry of Justice.  (By comparison, the US has 1,300,000 lawyers to serve a population less than ¼ the size of China’s.)

Last year, the CPC (Communist Party of China) Central Committee also adopted its first five-year plan to continue to establish the rule of law to “help the state gain strength and prosperity. It states that the promotion of rule through law is necessary in order to ensure the resurgence of the PRC in the long term and to realize the so‑called ‘Chinese Dream’ of once again becoming a world power.”  In case citizens have any doubt about what this really means, the plan also contains a number of guiding principles, starting with “maintaining the centralized and unified leadership of the CPC as the most fundamental guarantee of the rule of law in China.” 

In every society, the purpose of laws is to maintain order.  In China, as Harvard Law Professor William Alford put it in “The China Questions” (p. 215), order is “defined by the Party [as preserving] the Party.”

The interests of the CPC are also considered more important than any law.  “The party decides what is part of the state legal system and what is ‘sensitive’. Sensitive matters are defined by the CPC and assessed outside the law and are therefore not under the control of the state judiciary.”

Several more five year plans will be required until the “socialist rule of law with Chinese characteristics… basically takes shape” by 2035.  The 2021 five-year plan also “rejects an independent judiciary and the principle of separation of powers as ‘erroneous western thought’. Beijing is explicitly interested in propagating China’s conception of law and legal practice internationally… and enforcing its interests through the law.”

The phrase “with Chinese characteristics” emphasizes the perceived importance of creating a uniquely Chinese system which is consistent with the country’s traditional practices, and which is aimed to increase the power of the Party.

Many of the most interesting aspects of the system are closely related to the characteristics of Chinese culture described in previous posts, including the relativity of truth, non-linear thinking, and saving face. 

For example, China’s traditional approach to the law includes both non-linear thinking and relative truth.  According to University of Michigan psychologist Richard Nisbett in “The Geography of Thought,” (p. 74) legal disputes do “not consist… of a contest between opponents… Typically, disputants take their case to a middleman whose goal is not fairness but animosity reduction… There is no attempt to derive a resolution to a legal conflict from a universal principle. On the contrary, Asians are likely to consider justice in the abstract, by-the-book Western sense to be rigid and unfeeling.”

This difference can be disorienting for Western businesses that bring a lawsuit in a Chinese court.  As boutique law firm Harris Bricken noted in an overview of “China litigation and arbitration,” “Chinese judges place more emphasis on the overall context and ‘fairness’ of the case and much less on legal technicalities than their American counterparts. For example, if a company executes a contractual obligation poorly because of an incompetent or uncaring employee, a U.S. court would almost certainly hold the company liable for all damages arising from the breach. A Chinese court, on the other hand, might either not find liability or severely limit the damages, believing it unfair to penalize a company for the incompetence of one employee.”

The concept of relative truth can also be seen, according to the China Justice Observer, in the fact that judges “attach the greatest importance to documentary evidence. The role of witness testimony and physical evidence is almost negligible… [because] false testimonies of witnesses and false statements of the parties are very common in Chinese civil litigation… [This] undermines the trust of judges in what witnesses and the parties say.” 

Another key cultural difference in China is that, again according to Harris Bricken, “settling a case is often viewed as losing face. The Chinese company you are suing may prefer to lose the case and blame it on the judge than to settle and be viewed as having been at fault.”

If a settlement is agreed to or a judge awards damages, the “winner” may have problems collecting the amount due.  “Chinese courts often lack the authority… to force collection on their judgments. In addition, Chinese companies sometimes find it more cost effective to avoid a judgment by shutting down and re‐opening under a new name.”

In other words, if you work for an American company that has a dispute with a Chinese partner, and you decide to take them to court, the result may be very different than you would expect.

In the future, we can expect more of the same.  According to an article in The Economist entitled “China is becoming more assertive in international legal disputes,” the five year plan also “calls on China to help shape international law, to turn itself into the first choice of jurisdiction when resolving cross-border disputes and to encourage the use of Chinese law abroad.”

This is quite troubling since the Chinese system “bears no resemblance to the Western understanding of the rule of law. Its objective is for the law to better control state actions, but without limiting the power of the party in any way.”

Thus, the future of international civil law is still another area where the rise of China threatens US interests.  No one knows exactly how this will play out, but, for us at least, it doesn’t look good.