According to the Lunar Calendar, 2015’s Chinese Spring Festival is on February 19, ending the Year of Fire Horse and starting the Year of Wooden Sheep. At this transitional time, Legal Current invites Chang Wang and Nathan H. Madson to review the major legal events and developments in the People’s Republic of China (PRC) over the past year and predict the direction and trends of the legal system in the coming year. 

Chang Wang and Nathan H. Madson are co-authors of the popular Chinese law textbook “Inside China’s Legal System.”

REVIEWS

1. The Chinese Communist Party pledged to “Governing the Country by Law”
In October, the Communist Party of China (CPC) held the Party’s 18th Central Committee’s Fourth Plenum session. It should be noted the CPC Congress and its meeting sessions are much more important than the National People’s Congress (NPC) and its legislative sessions, because the former sets up the direction and guidelines while the latter merely legitimates the former’s policies. At the plenum’s closing, the CPC Central Committee issued a communiqué on “comprehensively moving toward ruling the country according to the law.” The CPC promised to increase both the accountability and transparency of government and to lessen local authorities’ control over the legal system.

2. Anti-corruption campaign and the fall of the “New Gang of Four”
In August 2013, former Chongqing Party chief Bo Xilai was sentenced to life imprisonment for his involvement in widespread corruption. 2014 witnessed the fall of the rest of the so-called “New Gang of Four.”

More than 50 senior Party officials at the vice ministerial level or above have been subject to Party disciplinary actions (shuanggui) or arrested since 2012, most of them on the charge of “corruption.” Through the anti-corruption campaign, Xi Jinping consolidated his supreme authority, eliminated sectarian forces inside the Party, and built a personal reputation. The anti-corruption campaign was executed by Wang Qishan, one of the top seven Party leaders and the head of the CPC Central Disciplinary Committee, the quasi-judicial disciplinary body inside the CPC that operates completely outside the criminal justice system.

3. One-Child Policy loosened
In November 2013, following the Third Plenum of the 18th Central Committee of the Communist Party of China, the government announced its decision to relax the one-child policy, the family planning policy that has controlled how many children may be born to a family without penalty since 1980. Under the new policy, families can have two children if one parent is an only child. In 2014, provinces slowly began to implement this relaxed policy.

4. Hukou system reform
The Third Plenum of the CPC 18th Party Congress in October 2013 also laid out guidelines to reform the controversial “hukou” system of household registration that has traditionally inhibited large-scale migration from the country’s rural areas into its urban centers. In July 2014, the State Council (the central government) announced that it would reform the hukou system. In December 2014, the Legal Affairs Office, under the State Council, released a draft residence permit regulation for public consultation. This has been a major step toward the abolition of the restrictive hukou system. The new regulations would allow people to obtain the permits necessary to access basic social welfare services in the place of their residence.

5. Anti-terrorism and the case of Ilham Tohti 
The CPC has been actively fighting against what it has described as Uyghur terrorist elements in the Xinjiang Uyghur Autonomous Region (XUAR). The XUAR is home to one of China’s larger minority groups, the Uyghurs, a group of Turkic Muslims that have had a contentious relationship with the Chinese government for decades. Spokespeople in the overseas Uyghur community allege China of harshly repressing Uyghurs; the government has accused many Uyghurs of terrorism. For example, eight people were recently sentenced to death and five others were sentenced to suspended death sentences on terrorism charges following what some have criticized as unfair trials.

One of the most notable and tragic cases within the past year has been that of Ilham Tohti.

6. Judicial reform and corrections of wrongful convictions 
CPC leaders have also been concerned with the rampant corruption and incompetency of the local courts. “Judicial Reform Measures” and a “Five-Year Plan” were announced in July. The reforms would seek to decrease the influence that local governments have on the court system by changing the way appointments and finances are handled. The measures also established pilot circuit courts to oversee the local courts and a handful of specialized intellectual property courts. The Party realized that to step away from the traditional model of judges as cadres, judges must be professional and accountable.

7. Organ harvesting to cease
China has vowed to stop harvesting organs from executed prisoners for transplant beginning January 1, 2015, the head of the country’s organ donation committee announced.

8. Crackdown on civil society, civil rights lawyers, and liberal intellectuals
The Year of Fire Horse witnessed an intensified and broadened crackdown on civil societies: NGOs, lawyers, journalists, as well as all outspoken “public intellectuals”—a title shared by some liberal thinkers and scholars—have all been targeted. Xu Zhiyong, one of the leading figures of the “New Citizens” movement, was sentenced to four years in prison at the beginning of the year for “gathering crowds to disrupt public order.” Pu Zhiqiang, the country’s most prominent civil rights lawyer, has also been arrested and jailed.

 9. “Martial law on the Internet”
The Central Internet Security Group was established earlier in the year and has been led by President Xi. The Party leadership believes Internet security and informatization is a strategic issue concerning a country’s security and development, as well as people’s lives and work. The Great Fire Wall has enhanced its functions by tightly controlling and censoring social media and carefully filtering “harmful” information. Two hugely popular Chinese websites that provided free subtitles for foreign films and TV series, as well as web streaming services of those foreign shows, were shut down in November. YouTube, Twitter, Facebook, Instagram, and Google are also completely blocked. By the end of 2014, Gmail and Virtual Private Network (VPN) services—two of the last few possibilities educated Chinese use to connect to the outside world—were blocked, too. Observers believe the government is determined to make the Chinese Internet a local area network separated from the real Internet.

10. Foreign businesses facing unprecedented legal and regulatory problems
Legal, regulatory, and business environments for foreign businesses in China are deteriorating rapidly in China.

To read the full version of reviews, click here (pdf).

PREDICTIONS

  1. Total financial and tax reform measures announced in 2014 included auditing local government debts (more than 3 trillion USD), reforming budget management, more aggressive tax collection, and reforming state-owned-enterprises. These measures, if implemented, would be instrumental in reshaping China’s economy in a healthy way. The State Council is doing a nationwide audit of local debts and imposing debt limits to avoid a potential financial crisis, which could be triggered by local government debts.
  2. China’s outbound investment will continue to soar, surpassing inbound investment for the first time in the coming year. The Chinese government has significantly loosened the restrictions on outbound investment and Chinese state-owned-enterprises are aggressively acquiring foreign businesses.
  3. There will be continued rapid growth of patent filing in China. China patent applications already account for 32.1 percent of the global total applications.
  4. More regulations and measures will be announced to deal with the worsened physical living environment, namely air and water pollution and food safety.
  5. The Central Disciplinary Committee of the CPC will continue to drive the anti-corruption campaign and use the extralegal “shuanggui” measures to detain and interrogate suspects. The Central Disciplinary Committee may expand its territory outside the CPC to non-Party members.
  6. The judicial reform measures announced last year will be implemented. The Supreme People’s Court will take some remedial measures to continue to correct the wrongful convictions in the past decade.
  7. A series of measures will be implemented by authorities to improve police performance and public approval in the wake of corruption scandals and a string of high-profile wrongful convictions.
  8. .The Chinese authorities are determined to build an entirely closed network in China, which means continuing to tighten control on the Internet.
  9. The government will continue to tighten its control in academia, the arts, and entertainment. Censorship and monitoring of publications and media will be expanded to classrooms. Academics, scholars, and intellectuals will be subject to heightened scrutiny by the authorities.
  10. From compliance and licensing to labor and land costs, foreign business will continue to face a complex and unpredictable environment in which to do business in and with China.