Chinese Judicial Achievements and Constraints - Essay Example

? Topic: In line with China’s economic reform, the Chinese judiciary has undergone formalization and institutionalization. What are the achievements and constraints the judiciary has had in the process? Introduction China has experienced fundamental and quick reforms in the legal and commercial areas since 1979. China as a country started almost from scratch and has recorded a substantial progress towards creating a commercialized arbitration system portraying international practice. Efforts have been directed by the government towards realizing a western-style legal occupation whose emphasis is on civil law which is in line with the country’s economic reforms. Despite this strides made, china is still away from achieving a wholly independent judiciary. This has been enhanced through enormous re-education and community attitude changes are encouraged. Achievements Chinese judiciary in the past thirty years has been successful in its quest for formalization and institutionalization. The areas include but not limited to; taking strides towards regulating acts of administrative laws. The important roles played by administrative legislation toward effective legal regulation of government legislative practices are crucial for any legal system. Legislative law of the people’s republic of china for instance, has ensured a basic legal framework for managing acts of administrative legislation (China's judicial system and its reform, 2010)1. For this to be realized, Chinese government issued the ordinance regarding the procedures for the formation of administrative control and the provisions on the guide for making administrative rules. This was a sign of institutionalization and formalization at the judiciary. Cleaning up administrative rules, repeatedly standardization acts of government legislation (Cai, 2001)2. The reforms have ensured the existence of chance for the improvement of Chinese laws and the portion of administrative rule as compared policy guidelines becoming manifested largely. Administrative legislation is important in standardization struggle due to it being clear-cut, applicable, diverse, experimental and progressive in nature. In order for the Chinese government to promote clarity and coherence in lawful standards, and in its way to realizing progress in the law based government, it has initiated several cleanups aiming at government legislation particularly those related to duties and rights of administrative areas. This initiative by the Chinese government to cleanup rules, regulations and normative documents have helped with the enactment of law-based government. Building of administrative penalty system and guarding individual procedural rights. An administrative penalty refers to authorizations passed on individual, legal persons and organizations found to have violated administrative directions. Such penalties help in effective management of communal affairs, enactment of administrative objective and disciplining person found with the offense of breaching administrative law standards or derail administrative goals and avoid illegal habit. China is among the few states to have an official administrative penalty law (Cai, 2001)3. In the year 1996, the Administrative Penalty Law established the legal ideologies and processes for legal and correct penalties and putting public opinion into consideration. It became useful during the incorporation of administrative penalty actions of administrative structures into a lawful framework. Through this, unjust penalties which were common in the early 1990s were stopped efficiently. Issuance of public security law and promotion of domestic based administration has seen improvement in areas such as legislative theory, important principles, and the sorts of punishments that are appropriate for public security management, punishment processes and supervision of law enactment. This is a reflection of the progress made so far by the Chinese government towards realizing a law based state and it exemplifies the founding spirit of “the state respects and preserves human rights” as outlined in the revised 2004 constitution(Zou, 2006)4. Implementing the regulations on urgent management of public health emergencies and developing lawful ways of tackling crises has been realized. This has enabled the Chinese government to prevent, manage and determines responsibility if emergencies arise. On the contrary, Chinese government is still deficient a true lawful framework for states of emergency and also an administrative coercion law. This is besides the fact that Chinas’ ability to take care emergencies is still a limiting factor (Perry & Selden, 2000)5. Evidence of a Promising Rule of Law; China’s economy is now known to operate extensive market mechanisms. This have come with challenges of transition to a market economy, development of active legal systems and coming up with important economic institutions to be mandated with the obligation of controlling outline for the market economy. The process of coming up with regulatory institutions to help with the driving forward reforms is achievable in yet several years to come. Through this initiative, foreign investment, shares and securities, real estate, intellectual property rights and corporations have been enhanced. Through the government intervention many economic and legal institutions have been established in the recent past as compared to 1978’s when they never existed. Improvements in the legal environment have encouraged flexibility especially in ensuring that foreign investors’ needs are met. Due to the stable environment set by such reforms, investors’ confidence has increased (Deedrick, 2001)6. In china to date, an extremely structured and planned system of laws is used as a tool of control for the best bureaucracy. For instance some dynasties used thorough and all-inclusive codes to punish and manage the population. This worked through magistrates corresponding particular crimes exhaustively using such codes. It is worth noting that china today still practices “rule by law” instead of “rule of law”. As progress continues, the law creates room for arbitration and articulation of interests and rights. It is foreseen to continue since private concentrates in property development and diversification (Deedrick, 2001)7. The fact that china’s legal system is founded on important national laws and guidelines, and administration regulations and such laws can only be interpreted by the state council since it is this council which is mandated with the duty to promulgate administrative rules and regulations and those for individual commissions and ministries. The administrative regulations are equal in status to law and therefore can only be interpreted by the state council. The mandate of promulgation bestowed on state council is authorized by the National People’s Congress (NPC) (Schrijver, & Weiss, 2004)8. Local laws and regulations are formulated by the resident people’s congress and government respectively and cannot breach the constitution and state laws. Emergence of private legal profession; several independent legal professionals have emerged in the recent years (Wang, & Wong, 1999)9. This has the driving force of responsibility to clients instead of the country and motivation from private incentives. The government of china has been in the forefront in approving private law companies and legal experts as part of the overall process of changing to a virtual market economy. Due to this, about 89000 registered lawyers are in China currently with roughly one third in the practice. Chinese government Enactment of the Lawyers’ Law, effective as from January 1997 ensured the regulation of services provided by the legal profession and the structure of the law companies. Since lawyers have the obligation of representing their clienteles in all arbitration and mediation activities. This was unlike for previous cases where domestic law companies/firms and individual practitioners applied for exceptional permits to exercise in areas such as intellectual property law and securities (Ambler, & Witzel, 2000)10. Control on foreign law firms by the ministry of justice has made it enabled the protection of upcoming domestic legal profession. The restriction ranges from office establishment and to the services provided by the overseas firms (Ambler, & Witzel, 2000)11. As a result of such regulations, a reduction in opportunities for training and gaining skill from overseas lawyers are likely to be experienced. Additionally, barring access to the full range of experienced legal advice could limit the healthy growth of the legal system and decrease oversea investors’ sureness in it. Chinese government has come up with policies on stipulating the qualifications for lawyers and law firms (Choukroune, 2012)12. Through the help of the justice ministry, standardized nation wide legal inspections have been administered since 1980s. It was made mandatory that those looking forward to becoming lawyer have to pass the set exam and thereafter practice in a law firm in order for them to be licensed. Civic education to the citizens in the law through detailed article on the newspaper, bill boards and neighborhood meeting have helped in raising the profile of lawyers and law in the society. The increased status of law, perception on the rewards that come with it and work satisfaction from practicing commercial law have led to increased numbers of student opting to pursue law as a profession. Several new practitioners possess foreign legal qualifications and skills in international law firms. The profession is therefore composed of corporate structure of international law companies. Because of the lawyers law, partnership-style law companies forming the foundation of an upcoming legal service industry with the experiences and skills to offer services to international clientele (Chen, 2008)13. Evolution of commercial laws; There has been rapid change in the commercial law setting since it establishment towards the end of 1970s and in the beginning of 1980s. The laws controlled the establishment and running of dual venture and fully owned foreign enterprises. The reforms have cut across from banking to financial all through to the more complex commercial legislation. Following this, was china enacted the company law which initially provided legal reliability to both local and foreign investors and incorporating the SOEs (China's judicial system and its reform, 2001)14. The passage of the draft securities laws by the national people’s congress helped in decision making proper asset and liability valuation and accounting. Due to lack of such draft, it was impossible to valuate properly the shares of a firm. Improved dispute resolution process; There has been incorporation of dispute resolution by the private legal specialists and reformers on the reform agenda. Improvements are aimed at achieving both transparency when resolving disagreements and a steady and consistent dispute resolution process. These are essential for sustained overseas investment and appropriate operation of a market focused economy. Much effort have made by the government towards realizing reforms in dispute resolution process through criminal procedures, arbitration and administrative review (China's judicial system and its reform, 2001)15. Arbitration is the most used mode of dispute resolution in china since it is applicable to most commercial and labor-linked disputes involving overseas investors and the securities industry. In china, the service is provided by The China International Economic and Trade Arbitration Commission (CIETAC) in foreign-linked disputes instead of maritime matters. Despite the drawbacks that CIETAC have experienced in the past, it is has continued to develop a reputation among law experts and possible disputants as increasingly consistent and competent. Because of the good will bestowed on CIETAC, most legal experts have recommended it as the arbitration body to foresee disputes relating to commercial deals and agreements involving overseas entities. For the case of china, it is probably the most common form of dispute resolution because of the fact that there are no other alternative forums and since foreign arbitration forums are expensive. This has Chinese party with only one option; insist on CIETAC whenever the need for arbitration need arises. This whole process of arbitration has increased transparency in the legal system and consistency in the application of laws (China's judicial system and its reform, 2001)16. One was allowed to appeal against court decisions in the higher courts, especially in the Supreme Court. This gave the Supreme Court the mandate to review decisions made by lower courts. Consequently, courts have embraced publication of judicial interpretations and case decisions made available to the public. Foreign legal firms and overseas companies assert that commercial dispute resolution normally result into relatively objective and results that can be predicted. For the political scenarios, lawyers secretly notes that the party affects case reviews and outcomes under the political and law committee. Administrative intrusion by native level party official and fraud in the resolutions of disputes remain problematic. Regulatory improvements; China has recorded enormous changes as far as accounting standards are concerned. These have ranged from those diploid in planned economies to those used in market economy techniques. The Chinese accounting with western accounting in that it treats Chinese enterprises and foreign financed enterprises as both joint ventures and fully foreign owned. The differences come in areas such as treatment of bad debts, long term equity investment, inventories, plant and equipment, non-profit facilities, land intangible assets and pensions. Existence of laws specific to the ownership method of enterprise encompasses accounting laws and regulations like accounting regulations for joint ventures employing Chinese and foreign investment under the supervision of the finance ministry (Lam, 2009)17. In china apart from the ministry of finance administration of accounting being responsible for developing accounting standards, other organization also help with standard improvement. For instance, the Accounting Society of China (established in 1980) help with the research and sponsoring symposia in china aimed at improving accounting standards. The securities regulatory commission (established in 1992) also helps with the publishing regulation information listed by other companies that need to be disclosed to the public. Introduction of accounting law in china was aimed at solving accounting problems. According the Chinese premier, accountant ought to be faithful in their work and should refrain from activities such as fabricating accounting data or indulging in corrupt deals. The premier ordered for audit of all financial statement and with preference gave those from SEOs and warned of severe punishment on individual found engaging in duplicitous accounting practices directed towards evading budgetary supervision, walloping loses and unlawful financial profits and tax evasion. Gradual development of competition laws, for instance Anti-Unfair Competition Law by china has enabled it to curb unfair competition (Adams, 2007).18. The law took effect in December 1993 but has been faced with hurdles such as uneven and poor enforcement of the law. Slow implementation of this law by the government has also been one drawback experienced so far. Enforcement has been a problem despite china’s central government issuing four additional regulations on biased advertising, limitations on competition by government own institutions, unfitting packaging and tagging and commercial secrets. Similar legislation was passed by ten provincial governments with some targeting cartel activities. Legislation concerning other facets of competition and consumer right have been propagated or being established in china. For instance, the Consumer Protection Law was enforced in 1993. Substantial media coverage of scenarios involving risky and faulty consumer products indicated public support for such laws. Suggestions relating to legislation such as antitrust laws ruling on matters associated with market structure have been put forward. Development of land markets; significant reforms on land matters have been realized in china in the recent years. This has been through re-privatization of land utilization by the Chinese government. Development and articulation of land rights have lead to increased growth in the real estate division (Cohen, Bang, & Mitchell, 1999)19. Imposition of sanction on developers and estate agents has driven the fast rate of change being experienced. Under the new system, land utilization rights are either granted or allocated. This has favored most SOEs as majority has been allocated land-utilization rights. Appropriate land bureau acting as government agents have been mandated with the responsibility of managing the utilization of assigned land (Woo, & Gallagher, 2011)20. Important limitation on the assigned land-use rights is that they have to be paid for before any activity on them such as their transfer or utilization in a local or foreign financed enterprise. On the contrary, approved land-use rights provisionally hand over the country’s direct control on the land to the land user for a determined period of time which usually is between 40 to 70 years. The charge of land-use rights is remitted to the level of government which initially assigned land right. The individual with the privilege of holding the land use right enjoys several ownership rights and therefore can lease, mortgage and transfer the rights given to them. To foreign investors it is significant since it allows them to acquire identifiable land utilization rights for specified duration thereby improving confidence and stability in the investment activity. Consequently, the government allows for rental and sale markets for business and residential constructions to function with relatively few limitations (Wacks, 1993)21. Because of the ever increasing demand for restricted office and residential space, flourishing property growth and construction, market rumor and other less orthodox means of transferring land-utilization rights. Projections for better IPR implementation; The United States of America has been in the forefront in pushing for increased enactment of china’s intellectual property era (Cohen, Bang, & Mitchell, 1999)22. The US drive came up with the 1995 IPR enforcement agreement which committed china to act towards reducing piracy using the central and domestic government clampdowns on offending industrial units. Chinas’ initiative to uphold transparency and awareness through publishing laws, standards and guidebooks to enact system have resulted into increased confidence among local and overseas investors. Improvement in many provinces can be attributed to increased alertness by local authorities. Signs of continued reform and transparency; the speedy reforms in the china’s commercial and legal sector have resulted to amore transparent and foreseeable environment; this does not mean that Chinese legal system is problem free. Majority of individuals in Chinese government is not willing to relinquish power and personal intervention is still a common occurrence (Cohen, Bang, & Mitchell, 1999)23. Constraints On the contrary, problems that have emerged include but not limited to securing legal redress in paradox of combined venture partners or commercial customers and suppliers, and Chinas’ unwillingness to impose the guard of overseas intellectual property. In addition Chinese citizens and foreign investors have reported incidences of fraud in the legal system. Some reports have cited poorly trained and insufficient independence of resident and nationwide political effect on the judiciary24. Slow bankruptcy reforms; Despite Enterprise Bankruptcy Law being enforced in November 1988, and numerous provinces adopting the bankruptcy, the laws are still unevenly applied. Since many governments owned enterprises are bankrupt technically, there has been the fear of economic destabilization when their bankruptcies are declared (Ambler & Witzel, 2000)25. It is worth noting that until recently, small numbers of bankruptcies opt for courts for dispute resolution. Intellectual property rights enforcement still an issue; Recent efforts to enforce intellectual property right in china by the international have resulted into china being brought in line with international standards. This has brought significant improvements such as formulation of laws to handle matters relating to patents and trademarks back in the 1980s. In the year 1991, china introduced the Copyright Law and early 1990s it signed the Berne convention. Recently it became a member of key international organizations and conventions linked to intellectual property, as well as the United Nations World Intellectual Property Organization (WIPO) (Cohen, Bang, & Mitchell, 1999)26. Lack of Enforcement; despite having intellectual property rights, both local and foreign owners still face certain risks while doing business in china. Problems such as piracy is still common and posses risks to the information technology, books, software, music, movies and pharmaceuticals and manufacturing processes and products. In china’s southern provinces such as Guangdong, violations of intellectual property rights are common. Inverse engineering of industrial machinery and paraphernalia is also a common practice. In other instances, limitative regulations could result into more problems. Without denying the fact that law to guard intellectual property is very developed, it should also be noted that proper enforcement is lacking. This would still mean possibility of violating producers’ right. The laws and regulations promulgated by state council are same for commercial-linked matters and also directorial and disciplinary, some are unpredictable and many are also poorly promulgated. In most instances, such laws are not common in the profession and this would mean some not even known to the law professionals and officials in the entire country held with the responsibility of ensuring their administration (Choukroune, 2012)27. Areas that require immediate attention to achieve commercial law reforms include but not restricted to enhancing transparency and enactment of bankruptcy and real estate legislation (especially the rights of foreign financed enterprises in main cities), securities and futures trading rules, laws regarding trading enterprises under foreign investors ownership and the insurance rule, in regards to foreign involvement and the scope of trade (Garrick, 2011)28. Bibliography Adams, J. (2007). Confidentiality Agreements and Non-Competition Clauses. 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