ABSTRACT
This book examines the law reforms of contemporary China in light of the Party-state’s ideological transformation and the political economy that shapes the reforms. This involves analysing three interrelated domains: law reform, power and wealth. Of these three domains, law reform constitutes the primary theme of the book, and the focus of analysis is on commercial law which governs wealth creation or regulates economic activity. ‘Power’ refers to Partystate control, as authority and infl uence, over economic activities; and ‘power relations’ as enacted within the holistic process of economic governance, law reform, law-application and law-adjudication. ‘Wealth’ is viewed as shorthand for wealth creation and the infl uence of the wealthy in economic governance and legal reform. Of particular concern is the nexus between wealth and power as each affects, and is affected by, the law reforms. Each domain is examined within various specialized contexts for expert insight. In the analysis, political economy plays a primary role in examining the issues of economics, wealth and power. Diverse perspectives are used including the techniques of comparative law to acquire a better understanding of the rule of law in a rapidly evolving legal system. Readers are challenged here to consider the validity of populist capitalist perceptions that a successful market economy must be governed by political and regulatory systems as exist in capitalist societies. Or that China’s reforms could be a fait accompli by wholesale adoption of key aspects of other countries’ systems. Of note is that China’s ‘economic miracle’ has solidifi ed over the past three decades, under a communist-socialist regime without substantive, transparent, democratic commercial law systems. The various contributors recognize that not all incompatible laws have been revised or amended. Some key laws are still to be developed, and implementation of some new laws remains problematic. China continues ‘crossing the river by groping for stones’. The legal reforms of this economic powerhouse have implications too signifi cant for the global community to ignore. This publication thus examines, analyses and encourages stakeholders to par-
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too broad to accommodate within this single volume and thus a follow-up volume is planned to address practical and ideological dilemmas faced by the authorities administering China’s vast taxation system, environmental laws, IP challenges and the issues associated with reforming business and company laws (see Garrick forthcoming). Balancing the needs of a market economy with the needs of a Party that is historically indebted to a socialist ideology is indeed a delicate act. The unprecedented scope of transformation, the challenges and opportunities embodied in China’s reform evolution are super-complex. The impact on society is multi-dimensional. There are profound interconnecting cause and effect relationships. For example, economic restructuring has caused rapid urbanization: from 18 per cent to 48 per cent of the population during 1978 to 2008 respectively. In turn, there has been structural change in the employment of labour, and deployment of natural and capital resources. The structural changes have necessitated the rapid development of new legislation covering foreign investment regulation, property, contract, tax, companies, bankruptcy, consumer protection, etc. This publication utilizes an interdisciplinary approach, encompassing academic and practice disciplines of law, economics, banking and fi nance, government and management to present a comprehensive study. Mao’s revolution extended beyond his lifetime. As the founder of the PRC in 1949, he began this nation’s socialist ambitions. The next signifi cant milestone was Deng Xiaoping’s promulgation of Gaige Kaifang – Economic Reforms and Openness policies – at the Third Plenum of the Eleventh CPC Congress. There was landmark economic progress from 1949 to 1989. There was also a great deal of sacrifi ce and needless bloodshed during the Great Leap Forward, China’s Cultural Revolution, and again at the Tiananmen Square protests. The protesters represented growing anger by China’s citizens about wealth disparity, environmental pollution, corruption and unemployment which accompanied economic reform. Citizens of China and abroad are now more informed and united in their concerns of these problems. The current leadership has acted on some of the concerns with various economic and legal reforms that are examined in the following chapters. Deng’s vision of ‘socialism with Chinese characteristics’ has radically progressed under the administrations of Jiang Zemin and Hu Jintao. Continued legal reform was compulsory for World Trade Organization (WTO) membership (member since 2001), and the Communist Party of China (CPC) Politburo has demonstrated its understanding of the critical contribution of legal systems to sustainable economic growth. Marx (1973: 532) also anticipated that the government infrastructure and services, non-market in character and funded out of taxation, would eventually become ‘marketized’:
According to Marxism, the economy is the base of a nation, and
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superstructure in turn exerts great negative or positive impacts on the economic base. In essence, the superstructure must – it has no choice but to adapt to the changes of the economic base.1
