Bird in A Cage - Chinese Law Reform After Twenty Years

Northwestern Journal of International Law & Business
Volume 20
Issue 3 Spring
Spring 2000
Bird in a Cage: Chinese Law Reform after Twenty

Years
Stanley Lubman
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Stanley Lubman, Bird in a Cage: Chinese Law Reform after Twenty Years, 20 Nw. J. Int'l L. & Bus. 383 (1999-2000)
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Bird in a Cage: Chinese Law Reform
After Twenty Years
Stanley Lubman *
I. INTRODUCTION
I am grateful to the editors of this joumal for inviting me to return to its
pages to help mark the twentieth anniversary of its inaugural issue. History
now tells us that publication of that first issue happened to coincide with the
beginning of an extraordinary period in Chinese history that has seen exten-
sive reforms transform the Chinese economy and Chinese society. These
reforms, no less dramatic than the revolutionary transformations of the
1950s, have caused law to gain unprecedented importance in Chinese soci-
ety. The Journal's anniversary provides an opportunity to review some of
the major characteristics of Chinese legal institutions as they have devel-
oped over the last twenty years, to speculate on their future, and to note
some issues that they present to the United States.
When I wrote in 1979, it was easy to summarize the state of Chinese
legal institutions because they were so sparse. Although a judicial system
had been created on the Soviet model in the 1950s, it had been politicized
by the end of that decade after a brief period of liberalization, and then fur-
ther wrecked by the Cultural Revolution. A new period of institution-
building began in 1979; reconstruction of the courts began and the law
schools, closed for a decade, reopened. Most fundamentally, the policies of
the Chinese leadership seemed to promise, as I noted then, "attempts to
conceptualize and articulate notions of law as an objective set of rules and
standards to protect rights."' At the time, there was only promise; my arti-
cle cited no legislation giving shape to new institutions, because none had
yet appeared. The evidence of impending change seemed clear, prompting
* Consulting Professor of Law, Stanford Law School

'Stanley B. Lubman, New Developments in Law in the People's Republic of China, I
NW. J. INT'L L. & Bus. 122, 127 (1979).
Northwestern Journal of
International Law & Business 20:383 (2000)
me to pose some questions about what might lie ahead in the future. My
earlier speculations still seem timely today, and I have revisited them below
in this article. I have surveyed Chinese law reform and the obstacles to
further reform more extensively in a book, Bird in a Cage: Legal Reform in
ChinaAfter Mao, whose title I have borrowed and from which I have drawn
for this article
II. MAJOR ACCOMPLISHMENTS OF LAW REFORM

The efforts that the Chinese state has made during the last two decades
to build legal institutions have been so extensive that a detailed review here
would be impractical.3 For this Article I have only noted three principal ac-
complishments: law has been made a major instrument of governance, a le-
gal framework for a marketizing economy has been created, and a judicial
system has been constructed.
A. Legalization
A basis for law reform was established when the leadership affirmed
the position of law as a source of authoritative rules. Under Mao, policy
alone as articulated and applied by the Chinese Communist Party ("CCP")
had directed and guided the entire Chinese Party-state, and legislation had
been used only formalistically to declare policy. It was imprecise, exhorta-
tional, tentative, and subject to unlegislated revision. The Constitution that
was adopted in 1982 recognized promulgated laws enacted by the legisla-
tive organs of the state as the appropriate vehicles both for defining and im-
plementing policy rather than CCP policy directives, even though the
implementation of legislation still depends on CCP policies and changes in
them. Reform has brought a fundamental new orientation toward governing
China that has generally been followed, in which formal legislation has be-
come the major framework for the organization and operation of the Chi-
nese government. Moreover, the range of problems that must be dealt with
by central and local laws is so great that the formulation of legislation is
being transformed from the passive translation of policy into a specialized
professional activity.
The role of legislation is problematical, however, for reasons other
than the continued dominance of the CCP. Maoism, the ideological engine
that drove CCP rule since 1949, insisted that policy innovations be tentative
2
STANLEY B. LUBMAN, BIRD IN A CAGE: LEGAL REFORM IN CHINA AFTER MAO (1999)
[hereinafter "BIRD IN A CAGE"]. See Stanley B. Lubman, Dispute Resolution in China
After Deng Xiaoping: "Mao and Mediation Revisited," 11 COLUM. J ASIAN L. 229 (Fall
1997, published in February 1999), for an earlier version of three chapters of this book.
3For recent overviews in addition to BIRD INA CAGE, supra note 2, see ALBERT CHEN, AN
INTRODUCTION TO THE LEGAL SYSTEM OF THE PEOPLE'S REPUBLIC OF CHINA (and ed. 1999);
JIANFU J.CHEN, CHINESE LAW: TOWARDS AN UNDERSTANDING OF CHINESE LAW, ITS NATURE
AND DEVELOPMENT (1999).
Bird in a Cage
20:383 (2000)
and that implementation be adjusted to reflect specific local conditions; its

imprint on legislative drafting remains strong. The task of legislating for
China, whether nationally or locally, is further complicated by China's size
and the growing complexity of Chinese society caused by the reforms.
Even before reform, Chinese authoritarianism required extensive inter-unit
negotiation and consensus building, but China's governance has become
much more complicated by the devolution of much central power to provin-
cial and local governments, whose legislation and interpretations of policy
often differ from those in Beijing. Bureaucratic decision-making has now
become so subject to inter-unit bargaining that Chinese authoritarianism is
best described as "fragmented." 4 One scholar concludes:
[I]n a space of fifteen years or so, the Chinese political structure has been
transformed from one that was once reputed for its high degree of centraliza-
tion and effectiveness into one in which the center has difficulty coordinating
its own agents' behavior. Because power and resources are dispersed, the ex-
ercise of central control now depends to a large extent upon the consent of the
subnational units whose actions are slipping from central control.5
Decentralization further invites experimentation and departure from
centrally-set policies. In addition, as is shown below, the institutions for
both making and interpreting laws are extremely disorderly. Moreover, the
outlook of Chinese governmental agencies toward rules and their applica-
tion is not yet founded on a coherent view of the role of law in the govern-
ance of China.
Some Chinese legal scholars would like to enhance the role of the leg-
islature and limit that of the Party, moving legislation closer to the primary
position that is assigned to it by the Constitution. Some leaders have at-
tempted to assert greater authority for the National People's Congress, and
as law-making becomes more specialized that body may increase its
power.6
4See Kenneth G. Lieberthal, Introduction: The "FragmentedAuthoritarianism" Model

andIts Limitations, in BUREAUCRACY, POLITICS, AND DECISION MAKING INPOST-MAO CHINA
I (Kenneth
5
G. Lieberthal and David M. Lampton, eds., 1992).
Wang Shaoguang, The Rise of the Regions: Fiscal Reform and the Decline of Central
State Capacityin China, in THE WANING OF THE COMMUNIST STATE: ECONOMIC ORIGINS OF
POLITICAL
6
DECLINE INCHINA AND HUNGARY 87, 109 (Andrew G. Walder, ed., 1995).
See, e.g., Qiao Shi interviewed on Role of NPC, in FOREIGN BROADCAST INFORMATION
SERVICE, DAILY REPORT, CHINA [hereinafter FBIS] 96-242 (Dec. 14, 1996). Although some
foreign observers have equated the evolution of the National People's Congress as portend-
ing evolution toward the rule of law, it has been aptly pointed out that "the new, higher
status of the NPC stems from a leadership determined to exercise 'rule by law' rather than
rule of law. In 'rule by law,' law exists not to limit state power...but to serve as a mechanism
for state power...". James V. Feinerman, The Rule of Law...with Chinese Socialist Charac-
teristics,96 CURRENT HISTORY 278, 280 (1997). See MURRAY SCOTT TANNER, THE POLITICS
OF LAWMAKING INPOST-MAO CHINA (1999), for an exhaustive study of the post-Mao devel-
opment of lawmaking institutions and a nuanced consideration of their possible future.
B. Creation of the legal framework for a marketizing economy

To give concrete form to economic reforms, the Chinese state has gen-
erated an extraordinary amount of legislation. The vast range of the prob-
lems that have been addressed in the effort to build substantive law for
market-oriented institutions may be illustrated by citing some major catego-
ries of legislation:
New participants in an emerging market economy have been created,
as by the Company Law that became effective in 1994 and by legislation
dealing with capital markets. New legal relationships appropriate to a mar-
ket economy have been defined, as by the General Principles of Civil Law
(a truncated civil code) and by laws on contracts that evolved into a new
Contract Law that was adopted by the NPC in March 1999, replacing two
previous enactments that had separately addressed Sino-foreign contracts
and those involving only Chinese parties.7 The new law represents a further
step forward in the attempts of China's law drafters to establish legal insti-
tutions that are more compatible with a market rather than with a planned
economy. Practice under the law will hereafter determine the extent to
which it can stimulate reliance on the legal rules underlying the law of con-
tract. How quickly such a new law can change the mentalities of economic
actors, judges and administrators is an altogether different issue.
Legislation has been used to express policies of state macroeconomic
control and their implementation, as in banking legislation; new rights and
interests have been given legal recognition, as in the Labor Law and rules
on consumer protection; a framework has been created for direct foreign in-
vestment, as in rules defining investment vehicles such as joint ventures,
contractual joint ventures, and wholly owned foreign enterprises, and
opening new sectors of the Chinese economy to foreigners;8 China has ac-
ceded to an extensive range of treaties and international agreements that
signal its participation in a global economic community; legislation has
7
The Contract Law gave further expression to the intention of the leadership to develop
the laws required to undergird a marketizing economy. It sets forth general principles that
will apply to all contracts, although it also contains specialized provisions for 15 specific
types of contracts. The general provisions cover such over-arching topics as contract forma-
tion, but avoids setting down rigid requirements for validity. Other principles govern such
matters as offer and acceptance, the capacity of the signatories, and transfer of contractual
obligations. Damages are specifically provided for, and liquidated damages may be calcu-
lated in a manner that permits anticipated profit to be included. While the law was being
prepared, one of the draftsmen told me in private conversation that the process had been long
delayed because of indecision among the drafters about the extent to which the Draft should
promote freedom of contract. One of the chief drafters has noted that in order to encourage
transactions the drafters limited the grounds on which contracts could be declared by the
courts to be invalid, moving away from previous practice. See Liming Wang, China'sPro-
posed Uniform Contract Code, 31 ST. MARY's L. J. 7, 15 (1999).
8
See generally, DOING BusiNiss IN CHINA (Freshfields, ed. 2000), for a comprehensive
guide to Chinese law for foreign investors.
Birdin a Cage
20:383 (2000)
been used for a host of other purposes related to building the necessary in-
frastructure for a marketizing economy, as in regulating basic industries
such as mining, setting standards for environmental protection, sanctioning
violations of intellectual property rights, and, as is explored below, creating
institutions intended to curb administrative arbitrariness; codes of criminal
law and criminal procedure have been promulgated and revised, although
the criminal process remains politicized.
As a result of this energetic legislative activity, which has been but
sketched here, China now has a large body of legal rules. Whether it has a
legal system is quite another question that is addressed below.
C. Construction of the judicial system
1. The growing activity of the courts

Legal reform has been marked by the reconstruction of the courts.
Formerly scorned as "rightist" institutions at the end of the 1950s and as
"bourgeois" during the Cultural Revolution, they have been rebuilt in a
four-level hierarchy. Courts are increasingly being used as the forums in
which rights created by legislation are asserted by citizens against each
other and, to some extent, against state agencies.
The number of civil and economic disputes brought to the courts yearly
has risen, from 2.4 million cases in 1990 to almost six million in 1997.
Most of the increase is attributable to the rise in contract and property dis-
putes and suits arising out of what would be considered as torts in the West,
such as claims for personal damages for injuries caused by negligence. 9
The increasing activity of the courts reflects the slowly increasing willing-
ness among many Chinese, especially in the coastal cities, to bring their
disputes to court rather than to resort to informal mediation, which has tra-
ditionally been the preferred means for settling most civil disputes. Con-
tracts and rights under them will grow in importance as more economic
transactions occur involving parties who were not previously well-known to
each other. Still, some 60% of the cases brought to the courts are currently
resolved through judicial mediation rather than adjudication of competing
claims and rights. This percentage is a decline from the mid-1980s, when
the rate of judicially mediated cases may have gone as high as 80% in some
courts.
The slowly changing relationship of mediation to adjudication merits
special attention. A system of local committees created for the express pur-
9
See CHINA LAW YEARBOOK (Zhongguo Fala Nianjian) 934-35 (1991), 855 (1992), 936
(1993), 1028 (1994), 1064-65 (1995), 958-59 (1996), 1056 (1997), 1239 (1998). Chinese
theory distinguishes between "economic' legal relationships in which any of the parties are
state-owned entities, and "civil" legal relationships involving privately-owned entities and
individuals.
pose of mediating civil, family and some property disputes has been active
in China since 1949. Today, the greater accessibility and credibility of the
courts is reflected in a decline in the number of disputes brought to the me-
diation committees, from 7.4 million in 1990 to 5.5 million in 1997.10 Even
more significantly, both the Chinese civil procedure code and policy today
have departed from earlier policies, associated with Mao, which stressed
mediation as the primary means of dispute settlement. Current policy
teaches that mediation should yield to adjudication that clearly defines the
rights, duties and liabilities of parties in disputes. The Maoist emphasis on
using mediation to suppress social conflict and unite the masses to work to
attain Socialism has disappeared, although the Ministry of Justice stresses
that it continues to aid in detecting and controlling potentially criminal or
otherwise socially disruptive behavior."1
The use of mediation continues to be supported by traditional prefer-
ences for solutions to disputes that will maintain or restore harmonious re-
lations between the parties, and also by a lack of judicial sophistication and
experience. Some American lawyers and judges who have visited China
have uncritically compared Chinese mediation to American alternative dis-
pute resolution, 2 but Chinese mediation ought to be viewed less simplisti-
cally. Mediation, whether conducted extrajudicially by activists who are
part of the state apparatus of control or by judges, may blur rather than
clarify rights. Chinese institutions for dispute resolution may continue to
reflect the traditional emphasis on group harmony and put less stress on
rights than the West. At the same time, growing reliance on contracts and
the increase in litigation suggests increasing acceptance of concepts of law-
based rights.
13
2. Revival of the Chinese bar and legal education
The bar, too, is in an early stage of development. Under Mao, a brief
experiment with a Soviet-style bar begun in 1956 was ended three years
later by a campaign against "rightism." The same campaign also caused
law schools to be intensely politicized long before the Cultural Revolution.
1'See Departmentof Grass-Roots Work, Ministry ofJustice, in PEOPLE'S MEDIATION IN

CHINA (1991); CHINA LAW YEARBOOK, supra note 9, at 956 (1991), 875 (1992), 956 (1993),
1047 (1994), 1081 (1995), 977 (1996), 1075 (1997), 1257 (1998). Discrepancies in figures
appear in originals.
1 On mediation before the Cultural Revolution, see Stanley Lubman, Mao and Media-
tion: Politics and Dispute Resolution in Communist China, 55 CAL. L. REv. 1284 (1967).
On mediation since the economic reforms, see Fu Hualing, UnderstandingPeople'sMedia-
tion in Post-Mao China, 6 J. CHINESE L. 211 (1992).
12See, e.g., Joseph Lieberman, Confucius's Lesson to Litigants, N.Y. TIMES, July 9,
1984, at 19; US. ChiefJustice in Shanghai,NEw CHINA NEWS AGENCY, September 8, 1981
(reporting Chief Justice Burger's "praise" of Chinese mediation).
13See LAWYERS COMMITTEE FOR HUMAN RIGHTS, LAWYERS IN CHINA: OBSTACLES TO
INDEPENDENCE AND THE DEFENSE OF RIGHTS (1998).
Bird in a Cage
20:383 (2000)
During that upheaval, the law schools were closed from 1967 to 1978,
longer than any other university-level institutions. The educational level of
many older lawyers is low and the legal education of the younger ones,
graduates of the law schools revived after the Cultural Revolution, is highly
formalistic and devoted to exegesis of legislation rather than training in
analysis and application of laws to concrete factual situations.
China now has well over 150,000 lawyers and 8,000 law firms, most of
which are state-run, although the number of "cooperative" firms is growing.
Legal ethics are emerging slowly, as illustrated by the common custom of
lawyers entertaining socially the judges who will decide their cases. The
state continues to regulate and scrutinize lawyers' activities. China's law-
yers still encounter substantial limits on the expansion of their roles. Their
numbers are few and their professional qualifications and educational stan-
dards remain low. The new profession faces many problems. A major un-
resolved contradiction exists between a legal profession and the CCP
opposition to autonomous organizations and professions. The sudden ex-
pansion of the legal profession has created enormous temptations for law-
yers, judges, and officials to engage in bribery and a variety of corrupt
practices that currently pervade their professional activities. The rebirth of
the legal profession has coincided with an explosion of materialism in Chi-
nese society. The use of personal contacts with judges or other officials to
attempt to influence the outcomes of cases, for example, is pervasive, and
the leadership has launched campaigns, most recently in 1999, against im-
proper judicial behavior.
1H1. CONTINUING PROBLEMS AND OBSTACLES TO FURTHER REFORM

As impressive as the efforts to build new institutions have been, the
tasks of deepening their power and broadening their reach continue to face
critical difficulties arising from Maoist ideology and unreformed Maoist in-
stitutions, new forces unleashed by the economic reforms themselves, and
traditional Chinese legal culture. The discussion that follows immediately
below surveys some of the persistent institutional difficulties.
A. Legislative disorder
The allocation of rule-making power by the agencies within the Chi-
nese bureaucracy is a major structural problem in the organization of the
Chinese state that is freighted with enormous implications for the future of
the rule of law in China. The reform era has seen the expansion of the leg-
islative power of provincial governments and more than twenty functional
bureaucracies of the central government.
The State Council, which stands at the head of the executive branch of
the central government, supervises more than sixty departments (including
ministries), commissions, administrations and offices. These possess
authority to issue regulations to implement specific legislation under a grant
of power by a legislative body such as the NPC Standing Committee. Their
authority also stems from a general rule-making power that is deemed to be

inherent in the agencies and enables them to issue any rule that is necessary
to carry out their functions.1 4 The wide array of "departmental rules" that
they issue, all of which have general binding authority, are superior to all
local enactments.1 5 No procedural rules exist to govern enactment of these
important rules, which may be issued or modified by any agency with ex-
clusive jurisdiction over the subject matter of the rule. When agencies
share jurisdiction, rules must be issued either jointly, or else by one of them
with the permission of the State Council.
Furthermore, crucial to the future of the role of courts and the rule of
law itself, local governments and central bureaucracies alone possess the
power to interpret the rules they issue. Chinese administrative agencies,
then, have the power both to issue and interpret their own rules, and to re-
quire the courts to enforce them. 16 This power is extensive, because most
laws originate in the state bureaucracy rather than the legislative bodies. In
practice, administrative agencies wield their law-making powers to protect
or increase their jurisdiction and to advance their policies.
The distribution of legislative power in China suggests that China suf-
fers from "legal fragmentation" 17 and supports the conclusion that no legal
institution in China currently has "either the authority or the desire to im-
pose order on the legal system." 18 Moreover, governmental agencies are
not unified in their outlook toward rules or their application. The broad
discretion that Chinese bureaucrats exercise in making and implementing
general rules is wielded in a system in which agencies are arrayed in paral-
lel hierarchies of equal (and poorly defined) authority, often overlapping in
jurisdiction, and marked by a cellularity that encourages consensus deci-
sion-making. This disorderly system denies to courts the role that they
might play in a system that sought to maintain the rule of law. The lower
courts are formally denied power other than to apply laws, although in
practice the unavoidability of their involvement in interpretation is coming
to be recognized 9 and the Supreme People's Court has asserted a strong
role in the interpretation of laws and administrative rules.20
14See PETER HOWARD CORNE, FOREIGN INVESTMENT IN CHINA: THE ADMINISTRATIVE

LEGAL SYSTEM 56 (1997).
5
See id. at 68-83.
16 See Perry Keller, Sources of Order in Chinese Law, 42 AM. J. COMP. L. 711, 734
(1994); Anthony Dicks, CompartmentalizedLaw and JudicialRestraint: An Inductive View
of Some JurisdictionalBarriersto Reform, in CHINA'S LEGAL REFORMS 82, 99-103 (Stanley
Lubman, ed., 1996).
17See Dicks, supra note 16, at 108.
18 See Keller, supra note 16, at 740.
19 See Perry Keller, Legislationin the People'sRepublic of China, 23 U. BRIT. COLUM. L.
REV.20
653, 668 (1989).
See BIRD IN A CAGE, supra note 2, at 282-284, and sources cited therein; Jianfu Chen,
supra note 3, at 106-109.
Bird in a Cage
20:383 (2000)
The language and phrasing of Chinese legislation and rules create wide
scope for administrative discretion in interpretation because a major goal of
Chinese legislative drafting is "flexibility." As a result, at all levels Chi-
nese legislation is intentionally drafted in "broad, indeterminate language,"
which will allow administrators to vary the specific meaning of legislative
language with circumstances. 21 Standard drafting techniques include the
use of general principles, undefined terms, broadly worded discretion,
omissions, and general catch-all phrases.2 2
These problems suggest that the making and interpretation of laws in
China is marked by disorder and potential for arbitrariness. Lawmakers ex-
ercise power to interpret rules of their own making, which are couched in
indeterminate language. No wonder one writer concludes that:
The disparate mass of laws and regulations which makes up the formal
written sources of Chinese law does not possess sufficient unity to be regarded
as a coherent body of law. In their disarray, the sources of Chinese law seem
barely capable of providing the basic point of reference which all complex
systems of law require.2
One root cause of disorder is the persistent tendency to interpret and apply
Chinese laws like the policies they are meant to replace. Formerly, many
policies had to be complied with in spirit only, 24 and bureaucrats may have
difficulty distinguishing the current proliferation of normative documents
from policy documents, a distinction that did not exist before reform. That
task is made more difficult by the existence of a large gray area of "policy
laws"--policy statements, administrative regulations, meetings, notices, in-
structions, and speeches that are given legal effectiveness because they
emanate from authoritative government and Party bodies.25 A Chinese legal
scholar argues that reliance on "policy laws" is undemocratic, disorderly
and a source of instability; "policy laws" do not set precise limits on legal
and illegal behavior nor define the legal consequences of failure to comply,
and they are procedurally unclear.26 This criticism parallels Western views
21
See Keller, supra note 16, at 750-752.
22
See Come, supra note 14, at 95-104, for the helpful catalogue. Maoist ideology is not
the only cause of these problems, of course. A study of Chinese legislative drafting argues
that "Although vagueness is present in all systems to some degree, we believe that the degree
of vagueness is greater in the PRC because of the relatively closed nature, limited capacity
and inexperience of the drafting process, and the paucity of institutional means to identify
and remedy such problems in the drafting process.". Claudia Ross & Lester Ross, Language
and Law: Sources of Systemic Vagueness and Ambiguous Authority in Chinese Statutory
Language, in THE LIMITS OF THE RULE OF LAw 221, 223 (Karen G. Turner, James V. Fein-
ernan, and R. Kent Guy, eds. 2000).
23 Keller, supra note 16, at 711.
24
See Come, supra note 14, at 90.
25See Meng Qinguo, Some Issues Relating to Policy Law, TIANJIN SHEHUI KEXUE
[TIANJIN SOCIAL SCIENCE] No. 2 at 55 (1990), translated as Shortcomings of Policy Law, in
JOINT
26
PUBLICATIONS RESEARCH SERVICE, No. 90038, May 17, 1990, at 21.
See id.
that when Party policy takes precedence over law, law loses its rationality
and the need to be internally28consistent and orderly, 27 and reflects the use of
law as a "mere instrument.,
The tentativeness that marked implementation of much Chinese policy
in the past may further contribute to legal uncertainty. As noted earlier,
Maoist-style administration assumed that policies would be applied experi-
mentally with Party decisions determining local variations. When Party
authority dictates variations in how legislation is applied, as Perry Keller
has observed, the boundaries of positive law are blurred:
Chinese legislation is perpetually in half focus as it faces into its back-
ground context of Party decisions and policy documents. It consequently fails
to achieve a separate identity as the formal source of Chinese law. The contin-
ued reliance of Chinese decision makers on policy directives and makeshift
regulations to introduce reforms clearly compromises any movement towards a
legislative model in which the formal sources of law provide a coherent foun-
dation for interpretation and doctrinal elaboration. It also underscores the am-
bivalence of many Chinese legislative officials towards such a model.29
B. Curbing bureaucratic discretion

Nowhere is the difficulty of improving Chinese legality better illus-
trated than in the hesitantly developing field of administrative law. The
1990s saw the beginning of what could eventually prove to be a significant
wave of further legal reform when the Chinese leadership addressed the
need to create legal institutions that might curb bureaucratic arbitrariness by
defining the scope of administrative authority and providing remedies for
the exercise of arbitrary power.
An Administrative Litigation Law ("ALL," effective in 1990) gives af-
fected persons or organizations the right to sue in the Chinese courts agen-
cies that have acted unlawfully.3 ° Suits brought against administrative
agencies under the ALL rose to 50,000 in 1995-although plaintiffs lost in
considerably more than 50% of the cases. An Administrative Punishments
Law (effective in 1996) defines the wide assortment of punishments that
may be imposed by administrative agencies, 31 and an Administrative Com-
27See
28
Keller, supra note 16.
See Yuanyuan Shen, Conceptions and Receptions of Legality: Understanding the
Complexity of Law Reform in Modern China, in THE LIMITS OF THE RULE OF LAW 21, 29
(Karen G. Turner, James V. Feinerman, and R. Kent Guy, eds. 2000).
29Keller, supra note 16, at 731.
30
ADMINISTRATION LITIGATION LAW OF THE PEOPLE'S REPUBLIC OF CHINA (adoptedApr.
4, 1989) (PRC), translated in CCH CHINA LAWS FOR FOREIGN BUSINESS [hereinafter CCH]
§ 19-558.
31
ADMINISTRATIVE PUNIsHMENT LAW OF THE PEOPLE'S REPUBLIC OF CHINA (adopted
Mar. 17, 1996) (PRC), published by XINHUA NEWS SERVICE, Mar. 21, 1996, also availablein
FBIS, supranote 6, at 96-071 (Apr. 11, 1996).
Bird in a Cage
20:383 (2000)
pensation Law (effective in 1995) defines the situations in which govern-

mental agencies may be liable for injurious consequences of their acts.
The jurisdiction of the courts, the extent to which they may vindicate
rights, and their power to restrain arbitrariness all remain very limited.33
The actions of administrative agencies in applying rules in specific situa-
tions may be reviewed only if the agency has violated a law; however, this
is difficult to show when the rule in question, like most Chinese laws and
administrative rules, has been very generally and broadly framed and has
given an agency broad-and unreviewable--discretion. Under the ALL the
courts could neither review the validity of general rules issued by adminis-
trative agencies nor decide that they improperly used their discretion, al-
though a law adopted in 1999 empowered the courts to review certain
general rules.34 Moreover, even when individual citizens or organizations
go so far as to challenge agency acts in court, the possibility that the agency
will retaliate in some form causes a considerable number of them to with-
draw their suits. 35 Clearly, Chinese administrative law is still very much in
a nascent state.
Some of the problems noted here that have been created by the disor-
derly allocation of power to make general rules have received the attention
of Chinese law reformers. For years draft legislation has been under con-
sideration that would demarcate spheres of authority and relationships
among central and local, superior and subordinate agencies more clearly
than the Constitution and existing legislation. A new Law on Legislation
was adopted by the National People's Congress in March 2000, but while it
added some clarity to the hierarchy of enactments it did not advance the de-
velopment of doctrine or institutions to deal with the ongoing need for legal
interpretation. 36 Even if new legislation clarifies rule-making authority and
provides for its control, however, only energetic and consistent enforcement
could increase more orderly law- and rule-making by local governments
32
STATE COMPENSATION LAW OF THE PEOPLE'S REPUBLIC OF CHINA (adopted May 12,
1994)
33 (PRC),
translatedby REUTER TEXTLINE BBC MONITORING SERVICE FAR EAST.
See, e.g., CORNE, supra note 14, at 246-248.
34
See ADMINISTRATIVE RECONSIDERATION LAW (PRC), availablein FBIS, supra note 6,
at 1999-0512 (Apr. 29, 1999).
35See, e.g., Veron Hung, Judicial Practice and Judicial Reform in the People's Republic
of China: Lessons From Administrative Litigation in Guangdong Province 85-89 (1999)
(Thesis submitted to the Stanford Law School in partial fulfillment of requirements for the
M.S.L degree, May 1999) (on file with author); David Zweig, The 'Externalitiesof Devel-
opment': Can New Political Institutions Manage Rural Conflict?, in CHINESE SOCIETY:
CHANGE, CONFLICT AND RESISTANCE 120, 125 (Elizabeth J. Perry and Mark Selden, eds.
2000). In 1997, 56% of the administrative cases instituted were withdrawn. See Lubman,
supra
36
note 2, at 209.
PRC LEGISLATION LAW (PRC), available in FBIS, supra note 6, at 2000-0403 (Mar.
18, 2000); see Peter Howard Come, The New PRC, Legislation Law: The Emperor's New
Clothes? 14 CHINA L. & PRACTICE 30 (2000); Li Yahong, The Law-Making Law: A Solution
To The Problemsin the Chinese Legislative System?, 30 H.K.L.J. 120 (2000).
and ministries, and thereby begin to impose limits on administrative arbi-

trariness.
C. Continued politicization of the criminal process

Despite reform in other areas, the criminal process continues to be an
abiding stronghold of politicized administration of law. That it may be less
politicized than it was under Mao is, of course, a distinction without a dif-
ference to dissidents and others condemned for "endangering the security of
the state," which is the direct descendant of the concept of "counterrevolu-
tionary crime," a broad catchall borrowed from the Soviet Union that was
formally abolished when the criminal code, initially promulgated in 1979,
was amended in 1997. Their treatment certainly violates not only Western
standards of justice but the Conventions on Human Rights that the Chinese
government has signed and, often, Chinese law itself.
At the same time, even in the criminal area, hardest for the Chinese
leadership to reform because of its intimate involvement with basic issues
of CCP control over Chinese society, there has been a tendency-albeit
slow-to extend and increase the formal rationality of the criminal process.
The differentiation of offenders on the basis of their class background, for
example, no longer seems to determine their punishment. The revision of
the criminal code in 1997 unified criminal provisions that had previously
been scattered in other laws, somewhat curbed official discretion by elimi-
nating several particularly vague provisions, and dropped much highly po-
litical terminology.37 The code of criminal procedure, which was also first
promulgated in 1979, was revised in 1996. The revision somewhat limited
the power of the police to detain criminal suspects indefinitely, expanded
the right to counsel, and enlarged the role of the court so as to make the
criminal trial a review of the substance of criminal cases rather than a pro
forma approval of a decision reached before the actual trial. Despite these
changes, however, the extensive power of the police and the CCP over the
criminal process have been only ineffectually restrained.35
D. Constraints on judicial autonomy

Although the caseload of the courts is rising, their independence, pow-
ers and effectiveness are constrained by a number of forces.
1. External influence on courts by the national-Partystate

Courts are still expected to follow policy as it is articulated by the
CCP, most obviously in the campaigns against crime that have frequently
37
See LAWYERS COMMITTEE FOR HUMAN RIGHTS, WRONGS AND RIGHTS: A HUMAN
RIGHTS ANALYSIS OF CHINA'S REVISED CRIMINAL LAW (1998).
38
LAWYERS COMMITTEE FOR HUMAN RIGHTS, OPENING TO REFORM?: AN ANALYSIS OF
CHINA'S REVISED CRIMINAL PROCEDURE LAW (1996).
Bird in a Cage
20:383 (2000)
been launched since the 1980s, but more subtly as well. Although links
between judicial decisions and general policies are much less explicit and
less often emphasized than they were before the onset of reform, the courts
are expected to apply the laws within whatever boundaries are set by such
policies and must also respond to changing emphases. The principal affairs
of the court are directed by the Party organization within the court, which is
itself subject to the leadership of the local Party committee. Important roles
are played in selecting judges by the Party committee at the court, the local
Party committee, and its personnel department. Party leadership is reflected
in the handling of some important and difficult cases. In such cases, one
Chinese law professor writes:
[The court] often reports ... to the local Party committee and solicits
opinions for solution ... and if contradictions arise among different judicial or-
gans, the Party's political-legal committee often steps forward to coordinate.39
2. Externalinfluences on cases by the local Party-state

The strongest and most insidious type of extra-judicial influence on the
outcomes of non-criminal disputes is interference by local officials in
pending litigation and in the enforcement of judgments. As noted, judges
are appointed by the local governments in the jurisdictions in which they
serve. The decentralization promoted by the economic reforms has also
reinforced localism in China. The increasing stakes of local governments in
economic enterprises have stimulated "local protectionism" that does not
appear to be responding to central government criticisms and appeals to de-
sist. This Chinese variety of what Americans might call "home-town jus-
tice" arises out of economic and not political reasons, and creates pressures
on the courts to persuade complaining parties to withdraw suits, to issue
judgments not in accord with 40 law and facts, and to punish judges who try to
be impartial with transfers.
"Local protectionism" consistently makes it difficult to enforce judg-
ments of the courts when the successful litigants must attempt to obtain
payment in a place where defendants live or do business. In 1988, China's
Supreme Court President said that around thirty percent of all judgments
39
He Weifang, Tongguo Sifa ShLixian Shehui Zhengyi: Did Zhongguo Faguan Xianz-
huang de Yige Toushi [The Realization of Social Justice Through Judicature: A Look at the
Current Situation of Chinese Judges] in Zou XIANG QUANLI DE SHIDAI: ZHONGGUO
GONGMIN QUANLI FAZHAN YANJIU [TOWARD A TIME OF RIGHTS: A PERSPECTIVE OF THE CIVIL
RIGHTS DEVELOPMENT IN CHINA] [hereinafter TOWARD A TIME OF RIGHTS] 209, 249 (Xia
Yong
40
ed., 1995).
See, e.g., Zhou Dao, Shiying Shehui Zhuyi Shichang Jingfi Tizhi Xuyao JiakuaiFaynan
Tizhi Gaige Bufa /To Adapt to the Socialist Market Economy, the Pace of Reform of the
Court System Must be Quickened], il ZHONGGUO SIFA ZHIDU GAIGE ZONGHENG TAN:
QUANGUO FAYUAN XITONG DILIU JIE XUESHU TAOLUN Hui LUNWEN XUAN [A FREE
DISCUSSION OF THE REFORM OF CHINA'S JUDICIAL SYSTEM: A COLLECTION OF ESSAYS FROM
THE SIXTH ACADEMIC CONFERENCE OF THE NATIONAL COURT SYSTEM] 1, 10 (1994).
that had some executable content were not enforced and other estimates are
even higher.41 The problem has continued to plague the courts, if press
commentary is any indication. Another sign has been noted by a judge
from Yangzhou who wrote in 1994 that whenever disputes involve parties
from outside Yangzhou, the policy of the local courts was to mediate such
disputes as a matter of course because a mediated solution to which the lo-
cal party had agreed would avoid problems of local resistance to the en-
forcement of a judgment.42
The use of guanxi ("relationships") to influence outcomes is common
enough to cause Chinese judges to refer to cases whose result was influ-
enced by a relationship between judges and local officials or others as
"guanxi cases" (guanxi an), as if they were an entirely separate type of case.
Such "back-door" influences on outcomes shade into downright corruption
and bribery, which are potent causes of perversions of justice.4 3 A particu-
larly vivid example of the dark side of Chinese dispute settlement came to
light as this Article was being completed. 44
41See Donald C. Clarke, Power and Politics in the Chinese Court System: The Enforce-
nent
42
of CivilJudgments, 10 COLuM. J. ASIAN L. 1, 28-34 (1996).
See Yangzhou Shi Zhongji Renmin Fayuan [Yangzhou Municipal Intermediate Level
People's Court], Kefu Difang Baohu Zhuyi, Jianchi Yansu Gongzheng Zhifa [Overcome Lo-
cal Protectionism, Resolve to Seriously and Justly Uphold the Law], in JINGJI SHEN PAN
CANYUAN CELIAO YU XINLEIXING ANLI PINGXI [ECONOMIC ADJUDICATION REFERENCE
MATERIALS AND ANALYSIS OF NEW TYPES OF CASES] 113, 115 (Supreme People's Court Eco-
nomic
43
Chamber, ed., 1994).
See He, supra note 39, at 266, 272; see also Margaret Y. K. Woo, Law and Discretion
in Contemporary Chinese Courts, in THE LIMITS OF THE RULE OF LAW 169-170 (Karen G.
Turner,
44
James V. Feinerman, and R. Kent Guy, eds. 2000).
Paul Lee, a Chinese-American investor in a school in the Special Economic Zone of
Shenzhen, on the Hong Kong-Guangdong border, claimed that when he wanted to develop
the land on which the school was operating, Shenzhen officials persuaded him to enter into a
land development agreement with a mysterious Chinese company that turned out to be affili-
ated with the Ministry of State Security. After Lee charged that a crucial document relating
to the development of the land that had been filed with the local Land Management Bureau
had been forged by his new Chinese partner, he was physically attacked in his office and in-
jured by toughs. In ensuing litigation, the local court ignored evidence of the forgery. Lee
turned to the Shenzhen branch of the China International Economic and Trade Arbitration
Commission (CIETAC), China's arbitration mechanism for resolving Sino-foreign commer-
cial disputes. Contrary to CIETAC's own rules, he was told that he could not appoint a for-
eign arbitrator from the designated panel of arbitrators from whom litigants may ordinarily
choose; the CIETAC tribunal that was chosen also ignored the proffered evidence of the
forged document. In July, 2000, officials of the Land Management Bureau of Shenzhen
were charged with corruption, and Lee was still trying to overtum the decisions against him.
See The Business Ideal Desecratedby Graft, S. CHINA MORNING POST, July 13, 2000, at 16;
School of HardKnocks, 16 BusINESS CHINA, No. 17, August 14,2000, at 2.
Bird in a Cage
20:383 (2000)
(a) Adjudication with Chinese characteristics

The Chinese judicial system presents many problems. The low educa-
tional level of China's judges creates significant difficulties. When re-
building of the courts began, most of the judges appointed were transferred
to the courts from Party and military posts. Many were former PLA offi-
cers who lacked not only legal education but a university education. Con-
siderable efforts have been made to train these judges by means of on-the-
job training, courses at the courts and courses at centers for judicial training
at Beijing and People's Universities. The percentage of judges with "aca-
demic credentials above university and college" rose from 17.1% in 1987 to
66.6% in 1992, according to a report by the President of the Supreme Peo-
ple's Court, Ren Jianxin, in 1993. 4 Most judges, however, still have not
had a legal education. In 1994, a provincial higher court president wrote
that "about half of the judges in the country have not reached the level of
university-level legal education. Moreover, not only are judges selected
and paid by local governments, but, unlike their Anglo-American counter-
parts, they have usually have never worked as lawyers.
Certain characteristics of the Chinese judicial process itself present ob-
stacles to the growth of legality. Judges often prefer to resolve cases by
mediation because they are unsure of their legal competence and fear being
reversed by a higher court. There is a high degree of consultation within
and between courts that is a sign of serious weakness. Judges ordinarily
bear the sole responsibility for deciding cases only in very minor matters.
The courts are subdivided into "departments" (ting) according to subject
matter, and a judge may consult a department head, senior judges, the Chief
Judge, or all of them when deciding a case. Cases deemed difficult or com-
plicated will as a matter of regular procedure be decided by an "Adjudica-
tion Committee" of senior judges. Procedure may be consultative in a
different manner: lower courts, apprehensive about possible reversal, some-
times request instructions from a higher court before they issue a judgment,
which renders meaningless the right of unsuccessful parties to appeal.
Chinese civil procedure undervalues the finality of judgments, which
in the West provides stability to the expectations of disputants and rein-
forces the popular credibility of the courts, thereby strengthening the rule of
law itself. Under current Chinese law, however, any noncriminal decisions
may be reopened within two years after they become final. 47 Even after ap-
45 See Ren Jianxin Reports to NPC Session, XINHuA NEWvS SERVICE, Mar. 22, 1993, in
BRITISH BROADCASTING CORPORATION-SUMMARY OF WORLD BROADCASTS (Mar. 24, 1993).
46He,supra note 39, at 228 (citing Zhou Dunhe, Cong Zhongshi Jiaoyu, Zhongshi Ren-
cat' Tan Faguan Jiaoyu, Peixun Wenti [Discussing Education and Training of Judges from
the Perspective of 'Emphasizing Education, Emphasize Human Resources'], RENMIN
FAYUAN BAO (May 12, 1994)).
47
CIVIL PROCEDURE LAW OF THE PEOPLE'S REPUBLIC OF CHINA, arts. 178, 182, 189 (Apr.
9, 1991) (PRC), reprinted in CCH, supra note 30, at §19-201. On the lack of finality gener-
peals have been exhausted and judgments have technically become final, a
discontented litigant may bring about a review by applying again to the
court that rendered the judgment, and may also try to involve higher courts
or local officials. Moreover, the higher courts themselves, in supervising
the quality of the work of lower courts, from time to time conduct reviews
of batches of their decisions even though the judgments have already taken
legal effect. Moreover, since the Chinese courts are subject to the supervi-
sion of the people's congresses-the legislative bodies that appoint them-
' 8 includes review of deci-
inspection by those bodies of the work of the courts
sions in specific cases identified by "the masses. A
These aspects of civil procedure should be viewed together with other
insights into the Chinese courts: for one thing, the role of the judge has been
defined only ambiguously. In a noteworthy essay, one Chinese law profes-
sor who has analyzed the content of the internal newspaper of the courts
concludes that judges are celebrated for being good soldiers of the state, not
wise dispensers of justice. In the same essay he points also to a second as-
pect of the role ofjudges when he characterizes their behavior as that of bu-
reaucrats. Chinese judges, in this view, do not make decisions in a
significantly different manner than their counterparts in administrative
agencies when they are administering policies. Seen together with the con-
sultative nature of decision-making, the links between the courts and local
officials and the relatively small number of cases that are actually adjudi-
cated rather than mediated, this perception that Chinese judges act primarily
as bureaucrats
49
seems to explain their role and decision-making style to-
day.
ally, see Nanping Liu, A Vulnerable Justice: Finality of Civil Judgements in China, 13
COLUM. J. ASIAN L. 35 (1999).
48See Woo, supra note 43, at 180-181.
49
See He Weifang on this important point, relying on interviews with Chinese judges:
"...as long as the court undertakes the judicial function without its true meaning, as long as
thejudgefulfills a kind of administrativeor non-judicialfunction,there will be no possibility
or necessity to attain professionalism in the selection of judges." He, supra note 39, at 245
(emphasis added).
He goes on to note the current problems faced by one vice president of a provincial court:
"The operational mechanism of the court isn't scientific, it's 'just a copy from the same old Politi-
cal-Legal department mold;' [it] lacks a mechanism that would guarantee independent adjudication by
law and mixes Party and governmental functions with adjudication; [it provides] no legal guarantee of
occupation, position, or salary for the judge, [and] no legal guarantee of financial support, [so that] the
courts are restricted by administrative agencies."
He, supra note 39, at 254-255 (citingRENMiN FAYUAN BAO (June 6, 1994)). In this connec-
tion, see also Yuanyuan Shen, Conceptions and Receptions ofLegality, in THE LIMITS OF THE
RULE OF LAW, supra note 28, at 34 ("When the provisions of written law are not readily en-
forceable, they are closer to ethical precepts than to law; when judicial processes are result
oriented or policy oriented, they are more akin to administration than to law.").
Bird in a Cage
20:383 (2000)
E. Leadership ambivalence in policy toward law

In 1979, as I pointed out in my article in this journal at the time,
China's leaders appeared to be considering elevating the function of law in
governing the nation. Since then, although they have continued to empha-
size the importance of the role of law, at the same time they also insist on
maintaining the dominant role of the CCP in Chinese society, and cannot
resolve the contradiction between these two policies. Thus, when President
Jiang Zemin proclaimed, at an important meeting in 1996, that the country
should be ruled by law, he immediately added a qualifying phrase, "protect
the long-term peace and stability of the country," a short-hand reference to
maintaining the rule of the CCP.50
The contradiction between simultaneous emphasis by the Chinese
leadership on legality and on the dominance of the Chinese Communist
Party was underlined in March 1999, when the National People's Congress
(NPC) adopted an amendment to the Chinese Constitution that states, "The
People's Republic of China shall be governed according to law and shall be
built into a socialist country based on the rule of law." At the same time,
however, the NPC also amended the Constitution in a different manner.
Prior to the amendment, Article 12 had affirmed "the leadership of the Chi-
nese Communist Party and Marxism-Leninism and Mao Zedong Thought as
"guiding principles." To these sources of Communist ideology was added
"Deng Xiaoping Theory." Ideology remains a potential and self-
contradictory inspiration, both for further and far-reaching reform and for
the continued maintenance of Communist authoritarianism.
Thus, the CCP continues to use law as an instrument to maintain and
carry out Party policies. This determination was illustrated at the end of
1998, for example, by the conviction, in three separate trials, of four dissi-
dents and the conviction in another trial of an entrepreneur who had given
the addresses of Chinese computer users to a journal published in the
United States by dissidents.52 Besides the treatment of dissidents, another
5
oSee Liu Hainian, Yifa Zhiguo Jianshe Zhuyi Fazhi Guojia Xueshu Yantao Hui Jiyao
[Summary of Forum on Ruling the Country According to Law and Constructinga Nation of
SocialistLegality], 18 FAXUE YANJIU [LEGAL STUDIES] 3 (1996).
51
TExT OF PRC CONSTITUTION AMENDMENT (MAR. 16, 1999), available in FBIS, supra
note526, at 1999-0316 (Mar. 17, 1999).
See Erik Eckholm, In Drive on Dissidents, N.Y. TIMES, Dec. 28, 1998, at A9:1 (re-
porting that a labor activist was sentenced to 10 years in prison for giving an interview to
Radio Free Asia about farmer protests, and that three other men who tried to organize a new
political party were convicted of subversion and sentenced to terms of 11 to 13 years). Pro-
spective lawyers for the defendants in this case "had been warned off by the police or de-
tained". Erik Eckholm, China Sentences 3for Their Dissidents,N.Y. TIMES, Dec. 22, 1998,
at A 6:3 (Prospective lawyers for the defendants in this case "had been warned off by the
police or detained."). See Seth Faison, E-Mail to U.S. Lands Chinese InternetEntrepreneur
in Jail,WALL ST. J., Jan. 21, 1999, at A10, for a report of the conviction of the defendant
who gave out the computer addresses.
obvious example is the use of criminal sanctions against any manifestations

in society of movements or tendencies that seem to threaten CCP rule, such
as the attack launched by the leadership on the Falun Gong sect in 1999.
IV. FORCES IN CHINESE SOCIETY AFFECTING LEGAL REFORM

Changes in the Chinese economy and in Chinese society wrought by
economic reform since 1979 could impel further legal reform, but they also
create new difficulties for it. Here I note only some of the most obvious
changes and some of their possible implications for the deepening and
strengthening of legal reform.
A. A non-state economic sector emerging and in flux

The economic reforms have created a growing and increasingly differ-
entiated non-state sector, composed of enterprises under varying degrees of
control by local governments and private owners. A marked characteristic
of Chinese economic reform is that it has proceeded without careful defini-
tion of property rights.5 3 Local officials have benefited from the ambiguous
legal status of private firms to form alliances with private enterprises, and to
peddle influence and protection in forms such as subsidies and favorable tax
treatment. By the end of the 1980s, "many rural firms that were nominally
collective had in fact become private firms operated with the cooperation of
local officials. 5 4
Local governments influence enterprises directly, as in the licensing
process, and also support some enterprises with credit, tax breaks or ex-
emptions, allocations at market prices of scarce goods and access to infor-
mation about new products, technology and markets.5 The relations of
government and business at the local level have been characterized as "in-
terpenetration, ' 56 involving bargains struck daily between business and bu-
reaucrats who may be disguised owners or simply accepting payoffs and
bribery.
53
See generally, JEAN C. O & ANDREW G. WALDER, PROPERTY RIGHTS AND ECONOMIC
REFORM
54
INCHINA (1999).
BARRY NAUGHTON, GROWING OUT OF THE PLAN: CHINESE ECONOMIC REFORM 1978-
199355 157 (1995).
See JEAN 0I, RURAL CHINA TAKES OFF: THE POLITICAL BASIS FOR ECONOMIC REFORM
(forthcoming). Another interpretation regards TVEs not as necessarily strengthening formal
state power at the local level, but as a form of local "dictatorship" dominated by "family
links." See DAVID ZWEIG, FREEING CHINA'S FARMERS: RURAL RESTRUCTURING IN THE
REFORM ERA 24 (1997), summarizing the conclusions of Nan Lin (in Nan Lin, Local Market
Socialism,
56
24 THEORY AND SOCIErY 301,301-354 (1995)).
See Dorothy Solinger, Urban Entrepreneursand the State: The Merger of State and
Society, in STATE AND SOCIETY IN CHINA: THE CONSEQUENCES OF REFORM 121, 136 (Arthur
Lewis Rosenbaum, ed., 1992).
Bird in a Cage
20:383 (2000)
The current configuration of institutions is transitional, and local gov-

eminent involvement in enterprises is not static. In some places the degree
of privatization of local enterprises increased during the mid-1990s, as local
governments decided that privatization did not diminish their control. The
Chinese leadership continues to declare its commitment to further reform
and the economy's future trajectory will take it far from its Maoist origins,
but the goals of the Chinese leadership remain undefined and the journey
will certainly be shaped by forces beyond its 57
control. In the near term, the
economy is "marketized but not privatized.
B. The state sector remains backward

In the meantime, the state sector of the economy, long recognized as
failing and a drag on the rest of the economy, continues to face difficult ob-
stacles to economic and legal reform.5 8 Half of all state-owned enterprises
may be insolvent, dependent on generous bank loans to keep them afloat;
the banks that have lent to them would be close to bankruptcy if the loans
were not rolled over; unfunded pension liabilities are enormous; and assets
are being stripped by managers. s 9 At this moment, the state sector remains
governed by rules and practices to which legal rules are essentially irrele-
vant. Relations between center and locality and between administrative su-
periors and inferiors are currently based on bargaining.6 In this
environment, enterprises and their superiors "face a vast realm of indeter-
minacy, in which everything-price, plan, supply, tax, credit-is subject to
change and negotiation."6 i In the state sector, the enterprise and its superior
are locked in an inextricable embrace in which they must bargain with each
other; in the bargaining process, accountability fades away. Reform of the
state sector has long been a goal of the leadership and presents them with
57
See Robert F. Demberger, China's Transition to the Future, Mired in the Present,or
Through the Looking Glass to the Market Economy?, in CHINA'S ECONOMIC FUTURE:
CHALLENGES TO U.S. POLICY, STUDY PAPERS SUBMITTED TO THE JOINT ECONOMIC
COMMITTEE, CONGRESS OF THE UNITED STATES, 104TH CONGRESS, 2D SESSION 57,58 (1996),
for 5use
8
of the distinction.
Summarizing the problem, two scholars noted "the bankruptcy or stagnation of over 60
percent of China's relatively inefficient and obsolete state industries" and observe that al-
though state industries employed over two thirds of the work force, they produced less than
half of China's economic production. Merle Goldman and Roderick MacFarquhar, Dynamic
Economy, Declining Party-State, in THE PARADOX OF CHINA'S POST-MAO REFORMS 3, 9
(Merle Goldman & Roderick MacFarquhar, eds., 1999).
59
See X. L. Ding, The Illicit Asset Strippingof Chinese State Firms,43 CHINA JOURNAL 1
(2000). See, e.g., NICHOLAS P. LARDY, CHINA'S UNFINISHED ECONOMIC REVOLUTION 21-58
(1998),
60
for a cogent summary on asset-stripping.
This discussion of the state sector draws on Barry Naughton, Hierarchyand the Bar-
gaining Economy: Government and Enterprise in the Reform Process, in BUREAUCRACY,
POLITICS, AND DECISION MAKING IN POST-MAO CHINA 245-289 (Kenneth G. Lieberthal and
David M. Lampton, eds., 1992).
6'Id. at 270.
International Law & Bfisiness 20:383 (2000)
enormous difficulties, but until reform is accomplished the state sector will
continue to be outside the legal realm.62
C. The decline of the power of the central party-state

When the leadership granted more power to local authorities to pro-
mote economic reform, "they probably did not anticipate that diffusion of
economic decision-making to the local areas and regions would concentrate
less political power in Beijing." 63 The control and influence of local gov-
ernments over economic resources and local business activity that has been
so critical to the success of the economic reforms is not decreasing, but
rather seems to be deepening over time. At the same time, the decline of
the state sector has reduced the economic resources available to the center.
More fundamentally, the growth of regionalism has weakened the "Leninist
structure" of the party-state. Central directives and exhortations are "ig-
nored or superficially followed," 64 deviation from central state policies is
encouraged, and the overall power of the state is undermined. 65 The conse-
quences for legal development are clear: localism, by critically undermining
the uniformity with which legal rules are applied, inhibits the nation-wide
growth of legality itself.
D. The crisis of values in China and decline of communist ideology

Reform has dramatically enlarged the personal freedom of many Chi-
nese. Before reform, work units-state enterprises and state offices, or-
ganizations, rural communes-exercised enormous power over all who
worked in them and depended on them for many aspects of life outside the
workplace. The reforms have led to relaxation of state control over the
lives of the Chinese populace in many noticeable ways. Now, Chinese are
better able to communicate without fearing surveillance, criticism or denial
of access to social welfare for political reasons by agents of the police in
their work unit. The state is beginning to channel social services such as
housing, social security and medical services through local governments
rather than through work units. Privatization has encouraged many to
"jump into the sea" (xiahai)of private enterprise and entrepreneurship, and
has created employment alternatives in the nonstate sector. The social val-
62
See generally,EDWARD S. STEINFELD, FORGING REFORM IN CHINA (1998).
63
Goldman & MacFarquhar, supra note 58, at 25.
64Id.
65 at 26.
One study of relations between entrepreneurs and local bureaucrats in Xiamen de-
scribes patron-client relationships in which entrepreneurs provide bribes and other benefits
to officials in return for use of their personal ties within the bureaucracy. The developing
patron-client relationships seem to shift power downward to the lowest levels in society at
which business and bureaucracy intersect and to benefit local interests. See David L. Wank,
Bureaucratic Patronage and Private Business: Changing Networks of Power in Urban
China, in THE WANING OF THE COMMUNIST STATE 153 (Andrew G. Walder ed., 1995).
Birdin a Cage
20:383 (2000)
ues and intellectual life of many Chinese, especially in the cities along the
Coast, have moved farther from government and Party control than could
have been deemed possible in 1979.66
At the same time, the profound political and economic changes that are
taking place have unsettled the beliefs and values of China's people. While
the material lives of many have been improved by an extraordinary rate of
economic growth for a decade,67 both traditional values and values pro-
moted during decades of Communism have been threatened by the effects
of the economic reforms. With dramatic improvement in material and per-
sonal life have come changes in China's social fabric that are both momen-
tous and irreversible. Income disparity is growing, both as a general
phenomenon and between urban and rural areas. Demographic pressures
and the lure of increased income have prompted a huge number of peasants
to leave the countryside in search of employment in the cities. This popu-
lation flow, formerly forbidden, has created a "floating population" of as
many as 100 million in China's cities, people unattached to work-units and
who constitute "swelling armies of impoverished rural floaters. 68 Reports
continue to emerge about discontent among peasants angry at their exploi-
tation by local cadres, an increasing number of spontaneous protests by un-
employed workers, and considerable alienation among young people.69
Environmentally-related social protests have become increasingly more
common. 70 Since the beginning of economic reform crime, violent and oth-
erwise, has risen, provoking widespread concern about social order and
provoking the Chinese leadership to launch numerous campaigns against
crime.
With vague distinctions between state and non-state property and
rights, standards of appropriate conduct whether ideological, legal or moral
66
See, e.g., CHARLOTTE IKELS, THE RETURN OF THE GOD OF WEALTH (1996); RICHARD
BAUM, BURYING MAO: CHINESE POLITICS IN THE AGE OF DENG XIAOPING 376-380 (1994).
67
Official Chinese estimates calculate the growth rate at over nine percent for a decade,
but even if it was overstated, it was still extremely high. See Jeffrey D. Sachs & Wing Thye
Woo, Chinese Economic Growth: Explanations and the Task Ahead, in STUDY PAPERS
SUBMITTED TO THE JOINT ECONOMIC COMMITTEE, CONGRESS OF THE UNITED STATES, 104TH
CONGRESS,
68
2ND SESSION 70, 74-78, for an analysis of the growth rate.
Baum, supra note 66, at 380. For a description of the problems of communities of pro-
vincials who have moved to large cities from the countryside, see Wang Chunguang, Com-
munities of "Provincials" in the Large Cities: Conflicts and Integration, 2 CHINA
PERSPECTIVES 17 (1995), and the accompanying series of articles.
69
See generally, Baum, supra note 66, at 376-380. On labor protests, see, e.g., Feng
Chen, Subsistence Crises,ManagerialCorruption andLabour Protestsin China, THE CHINA
JOURNAL, July 2000, at 41; Ching Kwan Kee, Pathways of Labor Insurgency, in CHINESE
SOCIETY,
70
supra note 35, at 41.
See Jun Jing, Environmental Protestsin Rural China, in CHINESE SOCIETY, supra note
35, at 143.
are lacking. 71 Relations among Chinese are changing, as new networks of

personal relationships appear as means of getting things done. The weak-
ening of the totalitarian grip on individual lives has fostered the reemer-
gence of an emphasis on personal relationships. Although traditionally the
foundation of guanxi has not been pecuniary, in China today the concept is
often transmuted into highly instrumental behavior.
The success of economic reforms has led many Chinese to lose what
little faith they may have had in the ideology of Marxism-Leninism-Mao
Zedong thought. The consequences of Maoist rule and the Cultural Revo-
lution had already begun to weaken belief in the ideology, and the eco-
nomic reforms have further accelerated its decline. While the ideology to
which the leadership constantly proclaims loyalty is eroded from below, it
is also being hollowed out from above. The leadership repeatedly changes
policy while maintaining its ostensible consistency with established ideol-
ogy, such as when they changed the goal of economic reform from a "So-
cialist commodity economy" to a "Socialist market economy," without
clearly defining the characteristics of either. The Party's legitimacy will, as
a result, increasingly be questioned.
Even as the ideology that justifies the Party's rule declines, the opening
of China to the rest of the world has exposed the Chinese people to new
values and ideas. Interest in politics and belief in the virtue of the officials
of the Party-state have declined, and the leadership's calls to create a
"spiritual civilization" elicit little popular enthusiasm. No alternative sys-
tem of belief has appeared to challenge an increasingly empty Communism,
and China is drifting ideologically. One disillusioned Communist has
written of "the widespread spiritual malaise among people from all walks of
life, a growing mood of depression, even despair,72 a loss of hope for the fu-
ture and of any sense of social responsibility."
In the midst of this enormous flux of values and institutions, corruption
is growing, despite continued efforts by the leadership to check and punish
its many manifestations. The U.S.-China Business Council has com-
mented:
The corruption problem seems only to worsen. So tightly knit are corrupt
practices into the fabric of modem Chinese society that they are almost invisi-
ble. Invoice fraud, diversion of government investment capital, bribery and
misappropriation of central and local government funds all seem to have be-
come a way of life.. .The universal assumption that all officials and corporate
71Within the business sector, "[g]ranting licenses and loans, forgiving debts, allowing tax
breaks, and providing access to needed electricity, water, telephones, and transportation are
only a few of the types of decisions for which PRC officials now expect 'tea money,' or
bribes." Lieberthal, supra note 4, at 268.
72
Liu BINYAN, CHNA'S CRISIS, CHINA'S HOPE 22 (1990). The flux in social values that
has appeared since the onset of reform has been further dramatized by the leadership's ex-
treme concern over the growth of the Falun Gong sect and the all-out attack on its leader and
beliefs that it launched in 1999.
404
Bird in a Cage
20:383 (2000)
managers are corrupt is probably responsible for the speed with which dis-
gruntled workers take to the streets; civil protest, mostly peaceful, is reported
almost daily by the foreign (not Chinese) press in China.73
V. CHINESE LEGAL CULTURE: CONTINUITY AND CHANGE

In considering the future development of Chinese legal reforms, we
must take into account various elements of Chinese legal culture that influ-
ence the ways in which legal institutions operate in Chinese society. The
term "legal culture" is used here to mean, in the words of one scholar,
"those parts of general culture-customs, opinions, ways of doing and
thinking-that bend social forces toward or away from the law and in par-
ticular ways." 74 Legal reform, even if carried out with stronger support by
government and Party than it now receives, must contend with traditional
Chinese attitudes toward law that have caused the populace to avoid and
fear involvement with formal legal institutions. At the same time, eco-
nomic and legal reforms are also changing popular values, in turn increas-
ing the acceptability of formal legal institutions.
A. The continuing influence of traditional Chinese attitudes

Traditionally in China, the emphasis on social harmony and avoidance
of conflict interacted with family, social structure and political institutions
to form a rich and mutually reinforcing blend of attitudes that shaped Chi-
nese "legal culture" as it influenced the resolution of disputes. When dis-
putes arose, widely-held values discouraged persons from invoking formal
legal rules or the agencies, judicial or otherwise, charged with formally en-
forcing and applying such rules.75 This does not mean that litigation was
unknown. Recent scholarship suggests that during the 18th and 19th centu-
ries, at least, a significant number of disputes may have been brought before
the local magistrates whose judicial functions formed part of their adminis-
trative duties.76
Nonetheless, the dominant cultural attitudes discouraged persons from
taking their disputes to courts, and today a venerable tradition of empha-
sizing compromise in the context of long-standing relationships continues
73 US-China Business Council, China's Political Developments, in US-CHNA BUSINESS

COUNCIL COMP., CHINA OPERATIONS '98 5 (Unpublished materials from China Operations
'98, a conference held in Beijing, Feb. 17-18, 1998) (on file with author). On the link be-
tween labor protests and managerial corruption, see Feng Chen, supra note 69.
74
LAWRENCE M. FRIEDMAN, THE LEGAL SYSTEM: A SOCIAL SCIENCE PERSPECTIVE 15
(1975).
75
For a recent discussion by a Chinese scholar of this subject, see Liang Zhiping, Expli-
cating 'Law.-A Comparative Perspective of Chinese and Western Legal Culture, 3 J. CHIN.
L. 55
76
(1989).
See, e.g., PHILIP HUANG, CIVIL JUSTICE IN CHINA: REPRESENTATION AND PRACTICE IN
THE QING (1996).
to exert its influence. The traditionally dominant attitudes were reinforced

by decades of Communist rule, during which formal legal institutions were
insignificant except as vehicles to demonstrate for the Chinese masses the
CCP policies of the moment. Many Chinese, especially in the countryside,
remain unwilling to take their disputes to courts and would rather find less
contentious solutions to problems that would center on adjusting the rela-
tionships of the disputants without reference to legal rights and duties.
Even though much Chinese legislation since 1979 has created new rights
and obligations, the assertion of rights is still relatively novel in Chinese so-
ciety.
B. Changing popular attitudes toward law

Traditional views of social conflict may be tenacious, but the extensive
social and economic changes sparked by reform in much of China are
changing attitudes among the populace toward law and legal institutions.
As already noted, changes in Chinese popular attitudes toward law are sug-
gested by the slight decline in the number of cases that have been handled
by mediation committees and the rise in the number of economic disputes
that are being taken to the courts. Also, although the leadership's commit-
ment to implementing the rule of law is hedged by its continued insistence
on maintaining the supremacy of the CCP and on using law instrumentally,
the development of administrative law reflects its concern about the need to
curb official arbitrariness. Its legitimacy might be stronger today if it had
created legal institutions on which Chinese citizens could rely more than in
the past.
Some Chinese legal scholars, officials and intellectuals have called for
a legal system that embodies standards of procedural fairness. Since 1978,
published discussions of political and legal reform as well as demonstra-
tions by Chinese students in the name of democracy have increasingly
called for the rule of law.7 7 In addition to intellectuals who appreciate the
importance of the rule of law in the West, other elements of Chinese society
would also like to see stronger legal institutions. This includes some of the
growing number of entrepreneurs who would like their economic transac-
77
The most scholarly account of the democracy movement in China before 1989 is
ANDREW J. NATHAN, CHINESE DEMOCRACY 3-30, 193-232 (1985). On the events of Spring,
1989, see, e.g., ANDREW J. NATHAN, CHINA'S CRISIS: DILEMMAS OF REFORM AND PROSPECTS
FOR DEMOCRACY 171-192 (1990). Nathan's books contain the most thoughtful writing on a
highly controversial and emotion-charged subject. Among the torrent of books and articles
that appeared after June 1989, see also HAN MINzHU, CRIES FOR DEMOCRACY: WRITINGS AND
SPEECHES FROM THE 1989 CHINESE DEMOCRACY MOVEMENT (1990); Andrew Walder, The
Political Sociology of the Beifing Upheaval of 1989, 38 PROBLEMS OF COMMUNISM 30
(1989). Among Chinese articles relating law to democracy, see, e.g., Chen Yunsheng, Mei-
you Falu De Zhengzhi Shi Weixian De Zhengzhi [Politics Without Law is Dangerous Poli-
tics], FAXUE [LEGAL STUDIES (MONTHLY)] 1, 2-3 (1987), for an outspoken call for the rule of
law by a scholar at the Institute of Law of the Chinese Academy of Social Sciences.
Bird in a Cage
20:383 (2000)
tions to be protected by rules enforced meaningfully and consistently by the

power of the Chinese state. 78 (Others, however, prefer to cultivate and em-
ploy personal relationships with officials to benefit their business activi-
ties.) Chinese government and Party officials who suffered hardships
during the Cultural Revolution are well aware of the need to check and
punish official arbitrariness, and many ordinary Chinese are aware that they
have been treated arbitrarily for many years by arrogant cadres and would
prefer to see a legal system that would deter and punish such conduct.
Scholars have noted that some Chinese peasants rely on published laws and
policies to resist official behavior that they consider to be unjust, 7 9 and that
protests against environmental abuses began to appear after environmental
la,' s were promulgated.80 These are indigenous Chinese sentiments, not the
creations of Western scholars, and they signify that the issue of whether
China is to strengthen the rule of law is becoming a truly Chinese problem.
Chinese attitudes toward law are also influenced by increasingly fre-
quent encounters between Chinese and visitors from abroad and exposure to
foreign media. Especially along the China Coast, it is not unusual to meet
Chinese who tell of something they have learned about law from watching
American television or discussing differences between East and West with
foreign visitors. Overseas Chinese are a particularly important conduit for
Western values, although often Overseas Chinese from Hong Kong and
Southeast Asia prefer to give little importance to formal legalities and
would rather do business in a relatively traditional manner, relying on rela-
tionships to particular places such as an ancestral village or rural county, or
persons, whether related or linked by alliance.
Although it would be foolhardy to try to predict the outcome of the
conflicting trends that have been described here, it is apparent that ideas are
moving from abroad into China in a forceful stream that cannot be stopped
by government or Party. But it is impossible to measure or predict the im-
pact of those ideas and the extent to which they can contribute to the mod-
ernization of Chinese law. What is certain is that institutional change is
necessarily a process that, even with the strongest political support, can
probably work slowly at best.
78For a recent research suggesting that some economic actors are relying less on guanxi
to form and maintain economic transactions, see Pitman B. Potter, Guanxi and the PRC Le-
gal System: Front Contradiction to Complementarity, in Pitman B. Potter and Michael W.
Dowdle, DEVELOPING CIVIL SOCIETY IN CHINA: FROM THE RULE BY LAW TOWARD THE RULE
OF LAW?, 4 WOODROW WILSON CENTER ASIA PROGRAM SPECIAL REPORT, March, 2000; see
DOUG GUTHRIE, DRAGON INA THREE-PIECE SUIT 175-197 (1999).
79See Li Lianjiang and Kevin J. O'Brien, Villagers and PopularResistance in Content-
porary China, 22 MODERN CHINA 28 (1996); Kevin O'Brien and Li Lianjiang, The Politics
of Lodging Complaints in Rural China, 143 CHINA Q. 756 (1995).
80See Jun Jing, supra note 70.
VI. THE UNCERTAIN FUTURE OF CHINESE LAW REFORM

I asked in 1979 in the pages of this journal whether the Chinese leader-
ship wished to build a legal system. Now, twenty years later, the character-
istics of Chinese legal institutions that have been summarized here
underline the continuing relevance of that question. Chinese legislative in-
stitutions are weak and stand alongside, not effectively superior to, the ad-
ministrative bureaucracy; Chinese courts are at best only at the same level
of authority as the other institutions of the state apparatus; their limited
reach reflects the subordination of law to the bureaucracy. Critical weak-
nesses in staffing procedures at the courts, poorly trained judges, overt lo-
calistic influence, and the absence of a concept of independent adjudication
further hobble the operations of the courts. Even more fundamental is the
basic contradiction in leadership policy toward law that has been empha-
sized. Ideology, institutional weakness and lack of political will combine to
highlight the leadership's failure or unwillingness to choose to establish a
meaningful rule of law.
In the current flux of Chinese institutions, local government power in
the nonstate sector will continue to influence the evolution of legal institu-
tions. The new business-government alliances and guanxi networks could
mark an intermediate stage between the breakdown of old bureaucracies
and the emergence of markets, but the weight of Western scholarship is
more pessimistic. 81 Rather than seeing a post-totalitarian separation be-
tween state and society, scholars perceive the emergence of a "corporatist"
state8 2 in which non-governmental actors "reflect state motives and state
action. 8 3 At the same time, reform affects state power very differently in
relatively poor areas. State corporatism brings stability to local polities in
wealthy areas, but "significant parts of rural China lack the political institu-
tions or party authority to maintain a stable political order.,84 The current
decline of central control and the growth of local economic and political
power make problematic the standardized application of law and imple-
mentation of policies.
Even if the central leadership were firmly committed to more vigorous
promotion of legality, it faces serious limits on its capacity. The Chinese
political system, never before monolithic, has become extensively decen-
tralized. Devolution of power downwards, often leading to downright defi-
ance of central government policies may, at least in the short run, promote a
81
See, e.g., Steven M. Goldstein, China in Transition: The PoliticalFoundations of In-
cremental
8
Reform, 144 CHINA Q. 1105 (1995).
2See Jean C. Oi, FiscalReform and the Economic Foundationsof Local State Corpora-
tism in China, 45 WORLD POLITICS 99 (1992); Margaret M. Pearson, The Janus Face of
Business Associationsin China: Socialist Corporatismin ForeignEnterprises, 31 AUSTL. J.
CHINESE
8
AFF. 25 (1994).
3GORDON WHITE ET AL., IN SEARCH OF CIVIL SOCIETY 126 (1996).
84
Zweig, supra note 55, at 25.
Bird in a Cage
20:383 (2000)
particularism unhealthy for the growth of national regulation and law-

making. These two characteristics of the Chinese economic reforms, crea-
tion of a parallel economy and devolution of power to the localities, have
benefited economic reform, but their combined force may also retard and
deflect Chinese legal development. Ultimately, though, they could combine
to stimulate perceptions by businesses and local governments alike of the
need for greater nationwide uniformity in the implementation of law.
The prospects for the sustained development of meaningful legal in-
stitutions seem doubtful. Their current weakness and the moral vacuum in
which they operate encourage opportunistic behavior. The organizational
challenge presented by the task of building effective institutions that have
been noted here are formidable. The immense size and poverty of large
portions of China make any administrative tasks difficult, and revising the
allocations of power within the Chinese bureaucracy and between govern-
ment and Party present enormous difficulty. The expansion of economic
opportunities and relationships, together with the decline of the work unit
and the multiplication of other routes for the delivery of social services,
could, perhaps, increase pressure, especially from economic actors in the
non-state sector, to make implementation of law more regularized. At the
moment, however, the difficulties stated here threaten to retard Chinese le-
gal development, at least absent fundamental changes in the current struc-
ture of the Chinese state and the state sector of the Chinese economy, as
well as a retreat by the CCP from its determination to oppose the emergence
of values and social organizations that would threaten its dominance over
Chinese society.
Twenty years of legal reform arouse new concerns that are a luxury
impossible to imagine not long ago: the sheer volume of legislation, its un-
deniable growing importance, and the institutions that have been created
sometimes generates excessive optimism among some Chinese and foreign
observers alike. So, for example, to say that "[T]he Chinese know how to
enact laws, they have a good process for doing it.. .and they will be able to
make the kinds of legal changes that WTO entry requires," seems to ignore
the normative chaos in Chinese law-making today and to exaggerate the
progress that has been made toward transparency, 85 not to mention the re-
sistance to Chinese accession to the WTO that exists in numerous sectors of
the Chinese government and economy.86
On balance, the overall thrust of the past twenty years of reform efforts
has been positive, and further encouraging efforts are underway, including
plans to advance judicial reform, add coherence to Chinese law-making and
8
5Jerome Cohen, Remarks at China'sAccession to the World Trade Organization:Impli-
cationsfor the UnitedStates, Japan and the World, COLUMBIA BusINESS SCHOOL 14 (Apr. 9,
1999). Compare the remarks of Pitman Potter at the same conference. Id. at 8-9.
S6 See, e.g., Yong Wang, China'sDomestic WTO Debate, 27 CHINA BUsINESs REVIEv 54
(2000).
409
continue the development of administrative law. 87 But even though Chi-

nese economic reform has begun processes of differentiation and functional
specialization of Chinese legal institutions that promise to expand rights
and rights-consciousness, further reform continues to be confronted by the
formidable ideological and institutional obstacles that have been summa-
rized here.
VII. IMPLICATIONS FOR U.S. POLICY
A. Some necessary basic assumptions

If the analysis of the Chinese legal reforms that has been presented
here is accurate, Chinese progress toward the regularity in making and ap-
plying rules that is associated in the West with the notion of the rule of law
is sure to be slow and not necessarily steady. The implications for U.S.
policy of the likelihood of very slow Chinese legal development are serious
and considerable.
First, in the near and possibly long-term future, despite growing mutual
Sino-American economic dependency, the U.S. will have to deal with a
Chinese government disliked by many Americans because its fundamental
relationship to the society it controls offends ideals and principles that are
intimately related to American concepts of law.
Second, U.S. policy-makers should be sensitive to the ideological na-
ture of the rule of law that many of them urge on China, although most
Americans simply take it for granted. The rule of law is a concept that le-
gitimates the exercise of power and, when it operates successfully, becomes
a belief system whose validity is generally recognized. Chinese leaders
cannot welcome the ideological revolution that the rule of law and values
associated with it threaten to cause by displacing an already fading Com-
munist ideology. In this regard, it is not totally irrelevant that Western
pressure to adopt a Western-style legal system may be genuinely viewed by
some Chinese as a form of cultural imperialism. There are some who un-
doubtedly believe that the U.S. and the West in general use the rule of law
cynically, not only to aim a sugar-coated bullet at the Revolution and the
CCP, but because history suggests that it has been used hypocritically, as
when it contributed to the causes of the Opium War. Also, the gap between
American ideals and American social realities-often so conveniently dis-
regarded when Americans urge American ideals on other nations-weakens
87
A five-year plan to reform the judiciary was announced in October 1999, see Rennin
Fayuan Wunian Gaige Gangyao [Outline of the Five-Year Reform of the Courts]
<http://www.china.judge.comlfnsx/fnsx386.htm>. On the most recent Law on Legislation,
see PRC Legislation Law, supra note 36. The author has been involved in ongoing discus-
sions between American administrative law specialists and Chinese legislative drafters, sup-
ported by the Asia Foundation, on further legislation intended to regularize administrative
procedure and restrain official arbitrariness.
Bird in a Cage
20:383 (2000)
the moral strength of American exhortations about the superiority of the

rule of law. Americans, including policy-makers, often fail to recall that the
rule of law emerged in the West only after centuries of slow evolution of
political philosophies that prize legality over the alternatives, and that the
concept of the rule of law is itself contested. 8
B. Human rights
1. General
Diplomat-scholar George Kennan has noted a characteristically Ameri-
can "legalistic-moralistic approach to international relations," manifested
most obviously in U.S. policy on human rights.89 The U.S. has taken the
lead, among all nations of the world, in using standards of human rights that
it regards as universal to judge the way other governments treat the people
of their own societies.
The U.S. has made Chinese human rights violations a major issue in
U.S.-China relations since a Chinese "democracy movement" was crushed
by force in June, 1989. Internationally, the U.S. has led efforts to make the
UN Human Rights Commission criticize China for human rights violations,
arousing Chinese anger at what China characterizes as an attack on Chinese
sovereignty. Domestically, such violations have been a central issue in an-
nual debates in Congress over whether China should receive Normal Trade
Relations ('NTR", formerly "most favored nation" or "MFN") treatment
from the U.S. Although President Clinton "delinked" the two issues in
1994, in early 2000 they came together again as Chinese accession to the
World Trade Organization ("WTO") became increasingly probable. All
WTO members are obligated under the GATT to extend unconditional NTR
to all others, but under the Jackson-Vanik legislation of 1974 the U.S.,
through Congressional vote, had previously only extended such treatment to
China conditionally on a year-to-year basis. After extended debate Con-
gress enacted legislation providing that China would receive the permanent
NTR treatment that all WTO members must extend to all others, and it was
signed by President Clinton on October 11, 2000.90
The U.S. critique of China is based in part on notions of fundamental
human rights, which many in the U.S. consider to be violated by the Chi-
nese government in its treatment of dissidents and persons accused of
crimes, its repression of organized religion and its harsh rule in Tibet, just
to name the most obvious. Although this critique projects American values,
88
See, e.g., Randall Peerenboom, Ruling the Country in Accordance with Law: Reflec-
tions on the Rule and Role of Law in Contemporary China, II CULTURAL DYNAMICS 315,
315-316 (1999).
89GEORGE KENNAN, AMERICAN DIPLOMACY 95 (1984).
90
U.S.-China Relations Act of 2000, Pub. L. No. 106-286, 114 Stat. 880 (2000).
such as due process, onto China,91 analysis derived from Anglo-American

concepts of legal procedure overlooks a historical Chinese lack of concern
for "procedural justice," even though "substantive justice" may have been
important.92 More fundamentally, notions of political and civil liberties and
concepts of inherent legal rights associated with them are extremely under-
developed in China today and are only beginning to be accepted. Also, as
Beijing argues with some support from other Asian nations, U.S. policy ig-
nores social and economic rights recognized as basic in the International
Covenant on Economic, Social and Cultural Rights.
The conviction of some Americans that the U.S. must implement an
active human rights policy has led them, especially since the Chinese gov-
ernment's brutality in Beijing in 1989, to persist in pronouncing censorious
judgments on China. Some would regard it as important to place at the
center of U.S. policy relentless insistence that China must become a law-
based society.9 Sometimes, though, these views seem to amount to a de-
sire to punish the Chinese leadership because China fails to live up to
American ideals. 94 Another observation by George Kennan might be re-
called here:
I am extremely skeptical of the relevance and applicability of our moral
principles to the problems and outlooks of others, and I suspect that what
passes as the 'moral' approach to foreign policy in our country is often only
another expression of the 95 serious American tendency to smugness, self-
righteousness and hypocrisy.
One of the tasks that American policy faces today is to fashion a course
that will steer between the extreme noted by Kennan and an uncritical rela-
tivism that refrains from any judgment on the behavior of other govern-
ments toward the citizens of the societies they rule. Arguments that "Asian
values" that do not prize democracy should be respected are belied by on-
going changes in the attitudes of some Chinese. Despite the differences in
the starting points from which Chinese and Westerners might proceed to-
ward formulating concepts that can be used to limit official power, concern
91
See, e.g., Jerome A. Cohen, Due Process?, in THE CHINA DIFFERENCE 237 (Ross
Terrill, ed., 1979); R. Randle Edwards, Civil and Social Rights: Theory andPracticein Chi-
nese Law Today, in HUMAN RIGHrS INCONTEMPORARY CHINA 41 (R. Randle Edwards et al.,
eds., 1986).
92
"...if undertaken honestly and with intellectual rigor, a broader definition of human
rights need not fall victim to the myopia of cultural relativism," Pitman B. Potter, Human
Rights in China: The Interplay Between Political and Socioeconomic Rights, 1987 AM. B.
FOUND.
93
RES. J. 617, 619 (1987).
See, e.g., Thomas L. Friedman, Rethinking China, PartII, N.Y. TIMES, Mar. 6, 1996.
94
See, e.g, Roberta Cohen, People's Republic of China: The Human Rights Exception, 9
HuM. Rrs Q. 451 (1987); Robert L. Bernstein, Break Up the Chinese Gulag, N.Y. TIMES,
Feb. 17, 1991, at E13.
95
See Letter to Philip Jessup, April 9, 1953, quoted in ANDERS STEPIIANSON, KENNAN
AND THE ART OF FOREIGN POLICY 183-184 (1989).
Birdin a Cage
20:383 (2000)
for values related to what Americans call "due process" has been increas-
ingly expressed by ordinary Chinese as well as intellectuals. In the almost
thirty years I have been traveling within China since the first days of Sino-
American ddtente, I have repeatedly been struck by the frequency with
which the Chinese express their desire for greater regularity in official con-
duct and for controls over arbitrary government acts.
2. The needfor restraintin urgingrights-basedpolicies on China

American policy-makers ought to take into account China's capacity to
respond to foreign pressure to work energetically toward attaining the rule
of law. The foregoing survey of law reform suggests that Chinese capacity
to change Chinese legal institutions is constrained not only by the determi-
nation of the CCP to retain its rule and power, but by limited resources and
the continuing influence of Chinese tradition. As has been observed by
Harry Harding:
Successful and sustained democratization requires a variety of accompa-
nying institutional and cultural preconditions...although democracy is not nec-
essarily a prerequisite for economic modernization, economic development,
and the cultural changes that such
96 development produces may be a condition
for successful democratization.
For its part, the U.S. lacks the power to bring about the changes within
China that many Americans apparently want to see. As one China special-
ist has noted, when the U.S. has threatened sanctions because of trade,
military sales and human rights issues, "in almost every instance the other
G-7 countries have not supported America's threats [which] has made
Washington's claim that it97is acting on behalf of widely accepted interna-
tional norms ring hollow.,
William Alford has argued that American insistence on rights-based
changes in Chinese behavior is not enough without encouraging changes in
"political culture," which includes all of what has been discussed here as
"legal culture." In the mouths of moralistic critics of China, "human rights"
often becomes a slogan that allows no room for differences in history, tra-
ditions and culture. One of the reasons why rights are fragile and tentative
in China is because the current legal culture of China cannot immediately or
fully absorb and employ the Western concept of legal rights.
The conduct of the Chinese Party-state is unlikely to change very sig-
nificantly in response to foreign urging unless rights-consciousness in
China rises considerably above its present level. Absent is what William
Alford has described as "a belief that individuals are endowed with rights
that they are entitled to assert even with respect to those in positions of
96
Harry Harding, Breakingthe Impasse Over Human Rights, in LIVING WITH CHINA: US-
CHINA
97
RELATIONS INTHE TWENTY-FIRST CENTURY 175 (Ezra F. Vogel, ed., 1996).
Kenneth G. Lieberthal, A New China Challenge, 74 FOREIGN AFFAIRS 35, 43 (1995).
authority., 98 He argues that the "institutions, personnel and values needed

to undergird a rights-based legality" must support the laws themselves.
This argument seems entirely appropriate. The forces most essential to the
support of legality, can only come from within China itself.
3. Promotingthe rule of law in China

Assuming that the U.S. wishes to adopt a policy of encouraging Chi-
nese progress toward the rule of law, how should such a policy be formu-
lated?
Quiet diplomacy on human rights. American attempts to bring human
rights violations by the Chinese Party-state before the United Nation Com-
mission on Human Rights have produced noisy posturing by both nations
and has also exposed differences among the U.S. and Western European
nations on human rights policy toward China. On balance, although West-
ern European support is weak the United States ought to continue its efforts,
so long as they are directed against deep-seated and gross violations of hu-
man rights by the Chinese government that are recognized as such by inter-
national law. In general, the U.S. should not preach, and its policy should
center on an approach that emphasizes international norms. The U.S.
should quietly but insistently remind the Beijing leadership that the world is
watching its treatment of its own people and that foreign images of China
are shaped in part by perceptions of China's governance.
Trade and human rights diplomacy should continue to be delinked.
Chinese economic development will not assure the growth of legality or
democracy in China, but neither will it have a chance to develop unless
China sustains its economic growth. American trade sanctions, depending
on their scope, could injure some of the export industries that are helping to
drive the Chinese economy and could affect the earnings of many Chinese
workers. At the same time, no U.S. President should permit China policy
to be captured by partisans of one issue, whether it be human rights or
trade.
Americans should entertain realistic expectations about Chinese par-
ticipationin the WTO. On the issue of Chinese membership in the WTO, it
should be clear that membership is not a prize earned for acceptable politi-
cal behavior but a benefit bestowed on nations that agree to adopt trade and
economic policies and practices that have been agreed on by the interna-
tional community of trading nations. China will have to agree to comply
with those policies and practices, but they are unlinked to human rights
considerations that are not addressed by the GATT Treaty and the other
documents that are applied by the WTO.
98 WILLIAM P. ALFORD, To STEAL A BOOK IS AN ELEGANT OFFENSE: INTELLECTUAL

PROPERTY LAW IN CHINESE CIVILIZATION 117 (1995).
Bird in a Cage
20:383 (2000)
Chinese admission to the WTO will, however, be conditioned on Chi-

nese commitments to meet the obligations that all members of the WTO
must bear. In this regard, the nature and functioning of China's legal insti-
tutions present issues of genuine practical interest. Expectations in the
United States about the effects of China's accession would benefit from re-
alistic perspectives on current Chinese conditions. For one thing, hope that
membership in the WTO will bring about change in China's political insti-
tutions ought to be restrained.99
During China's lengthy negotiations on accession to the WTO with the
U.S. and other major WTO members such as the European Union, the at-
tention of the governments involved was understandably focused on eco-
nomic issues that have long vexed foreign investors and exporters. The
Sino-American negotiations that were successfully concluded in November
1999 focused on such issues as lowering tariffs and ending quotas on U.S.
exports to China, ending restrictions on the right of U.S. companies to en-
gage in distribution activities and professional services and to invest in cer-
tain industries such as telecommunications, market access for key industries
that have hitherto been excluded or limited such as insurance and banking,
and the measures that the U.S. could take in response to surges of Chinese
imports. 00 Much less public attention was paid to the agreement with the
WTO that the PRC must sign before becoming a member, and which will
contain provisions intimately related to the legal institutions that have been
discussed here.
The process of accession to the WTO has required China to sign a
Protocol negotiated with a Working Party representing existing members of
the WTO, whose text has been under negotiation for years. At the time this
Article went to press, the agreed text of the draft Protocol already obligated
China to make a commitment to move toward the transparency required by
Article X of the GATT Treaty, which obligates members to apply laws re-
garding trade in a "uniform, fair and reasonable manner."101 Chinese judi-
cial and administrative institutions currently fall far short of that standard.
99
For an example of excessive hopes, see an account of businessmen urging their Con-
gresswoman to support Chinese accession because "the only way we're going to undermine
that regime is to infiltrate it." See Joseph Kahn, Executives Make Trade With China a Moral
Issue, N. Y. TIMES, Feb. 13, 2000, at 22. Exaggerated expectations about change in China
are criticized in William P. Alford, Exporting "The Pursuit of Happiness", 113 HARV. L.
REV. 1677 (2000) (reviewing Thomas Carothers, AIDING DEMOCRACY ABROAD: THE
LEARNING CURVE (1999)); James V. Feinerman, Free Trade, To a Point, N.Y. TIMES, Nov.
27, 1999, at A15.
1°°For extensive sources on the U.S.-China negotiation, see the United States-China
Business Council (visited Sept. 16, 2000) <http://www.uschina.org/public/wto/#bilat>. For
the European Union agreement with China, see EU-China WTO Accession Negotiations,
(visited Sept. 16, 2000) <http:leuropa.eu.int/commltrade/bilateral/chinalhigh.htm>.
101 General Agreement on Tariffs and Trade, 1947, as amended, including notes and sup-
plementary provisions, art. X.
The draft Protocol of Accession also contained language in which China

has agreed that:
China shall establish or designate, and maintain, tribunals, contact points,
and procedures for the prompt review of all administrative actions relating to
the implementation of laws, regulations, judicial decisions and administrative
rulings of general application... IThe tribunals shall be independent of the
agencies entrusted with administrative enforcement.102
These commitments are notable, but they do not go far enough, and
China has resisted making more extensive commitments. The draft Proto-
col of Accession that was on the negotiating table in mid-October 2000 did
not require China to agree to enact rules to govern administrative procedure
or the standards of evidence that must underlie the decisions of administra-
tive agencies, nor did it address the deficiencies in existing legislation that
prevent challenges to the rules on which agencies base their decisions or to
the exercise of discretion by agencies. The draft of the Protocol, therefore,
fell short of the standard that is desirable. 10 3 To be sure, many WTO mem-
bers probably also fail to meet that standard, but accession to the WTO of-
fers an opportunity to impart needed momentum to Chinese reform efforts.
The Working Party could perhaps have used the accession process
more aggressively to press China throughout the long negotiations to make
more specific engagements to reform its administrative law and the judici-
ary, and to increase the efficacy of the legal institutions that have been sur-
veyed here. The progress that had been made up to 1997 has already been
noted here. Late in the accession process some members of the WTO
Working Party, especially the United States, increased the pressure. After
three weeks of negotiations in September 2000, a Draft Report of the
Working Party stated that:
Some members of the Working Party expressed concern that China
needed to improve its institutions and procedures for the prompt review of dis-
putes over trade-related matters in China, in particular with respect to the inde-
pendence of the administrative and judicial authorities for reviewing
measures. 104
The September 2000 negotiations ended without agreement on further
revision of the Draft Protocol, and with strong differences of opinion be-
tween China and members of the Working Party on the extent and specific-
ity of the commitments that China would have to make on a variety of
'°See Draft Protocol on China, 28 May 1997 (visited Oct. 21, 2000) <http://www. in-
side trade.com/securefwtoworld.asp>. Although extensive negotiations took place after this
draft was tabled, a revised text had not yet been issued.
03See, e.g., Sylvia Ostry, China and the WTO: The Transparency Issue, 3 UCLA J.
INT'L L. & FOREIGN AFF. 1, 10-19 (1998); MARK A. GROOMBRIDGE & CLAUDE E. BARFIELD,
TIGER By THE TAIL 69, 72-74 (1999); Stanley Lubman, China, the WTO and the Rule of
Law, FIN. TIMES, Dec. 8, 1999.
"aSee Draft Report of the Working Party on the Accession of China to the WTO, 1 Sep-
tember 2000 (visited Oct. 21, 2000) <http://www.insidetrade.com>.
Bird in a Cage
20:383 (2000)
issues, of which judicial review was only one. The Chairman of the Work-
ing Party, summarizing the negotiations, stated that "a large part of the open
issues before us has to do with reaching multilateral agreement on how and
when [China's] commitments will be implemented in line with WTO re-
quirements."' 0° The United States argued that "[w]ithout legal changes,
China ... cannot implement its stated commitments on intellectual property
rights, telecommunications, financial services, customs valuation and sani-
tary and phytosanitary
10 6
measures," according to sources in the Clinton Ad-
ministration.
The head of the Chinese delegation, Vice Minister Long Yongtu, how-
ever, took a very different view. He emphasized that China would abide by
all of the commitments it had made in bilateral agreements, and that "it is
inappropriate and unnecessary to invent a new set of rules specifically for
China."107 On multilateral agreements that address legal institutions such as
judicial review, he criticized parties that wanted "to impose [their] views on
others" and said that they "should not insert discriminatory and inappropri-
ate language."' 08 Long was objecting to demands by the U.S. and the EU
that it present a legislative action plan and that China consult with members
on draft legislation. 0 9 In discussions that this author had in Beijing with
Chinese officials in mid-October, the Chinese argued that the U.S. was in-
sisting on what one called "WTO plus," and resisted the response that what
was at issue was the need to spell out what is only implied by the very gen-
eral language of GATT Article X.
As one observer saw it, the impasse signaled by the differences sum-
marized here presented a dilemma to the United States in its efforts to press
for additional detail in China's commitments: it could insist on further ne-
gotiations until China had undertaken to make substantial progress in legal
reform, or it could decide to rely on the WTO dispute settlement process to
address controversies that might arise. The same report stated that the EU
had already decided on the latter course. " The United States will hardly
'05 See Meeting of the Working Party on the Accession of China, 28 September 2000,
(visited October 21, 2000) <http:llwvwv.wto.orglenglish/news__e/news00/chinasurn_e.htm>.
'6See Paul Precht, Pace of Chinese Legal Changes PosesDilemma on WTO Accession,
INSIDE U.S. TRADE, Sept. 15, 2000, at 1. Similar views were expressed by Pascal Lamy,
trade commissioner of the E.U. See also Lamy ConditionsChina'sAccession on Acceptance
of Commitments, INSIDE U.S. TRADE, Oct. 6, 2000, at 16.
07
' See Twelfth Session of the Working Party on China: Statement by HE. Vice Minister
LONG Yongtu, Head of the Chinese Delegation, 28 Sept. 2000 <http:/Ivwv.wto.org/ eng-
lish/news elnews00 e/chinaalsp e.htm>.
108ld.
109 Precht, supra note 106, at 22.
"°U.S.-China Relations Act of 2000, Pub. L. No. 106-286, §401, 114 Stat. 880 (2000).
The legislation authorizing Permanent Normal Trade Relations ("PNTR") treatment of China
also declares that it shall be the objective of the United States to obtain an annual review of
rely on the WTO as the exclusive source of remedies for violations of WTO
rules, of course: the legislation authorizing PNTR treatment of China calls
for annual reports by the U.S. Trade Representative on China's compliance,
and authorizes appropriations
11 to the Department of Commerce for moni-
toring compliance.'
The differences that arose during the negotiations on the Protocol of
Accession suggest that the United States and the other major trading nations
should entertain clear and realistic expectations about the limited results
China can attain by even the most energetic and sincere efforts to create and
operate the institutions required by the GATT after China becomes a mem-
ber of the WTO. My discussions in Beijing in October 2000 with Chinese
legal specialists suggested that leaders at very high levels in the central
government had been surprised to learn about the extent of the change in
Chinese law that accession might require, and that outside Beijing local of-
ficials were quite generally quite unaware of such implications. The modi-
fication and strengthening of Chinese legal institutions that accession
requires can only occur, if at all, over a very long period of time.
China's failure to meet the GATT standard, no matter how it is ex-
pressed, could well engender a considerable number of disputes. Although
some American supporters of Chinese accession have argued that accession
would place China within the reach of a "strong dispute settlement mecha-
nism to punish violations in a timely, decisive way,"' 12 there should be no
illusions about the limited extent to which the WTO dispute resolution pro-
cedures can be used to enforce adherence to China's obligations as a mem-
ber of the WTO. Disputes arising out of alleged Chinese failures to comply
with obligations of membership could become so numerous as to overload
the WTO dispute settlement process, and the processes of obtaining
13 deci-
sions and implementing them could be very time-consuming.
Support legal exchanges with China. The U.S. Government and
American foundations should provide support for programs that will foster
the growth of Chinese legality. The U.S. Congress, for all the law-related
China's compliance with the terms of its accession to the WTO, which was being resisted by
the PRC at the time this Article was going to press.
"'.
2
See id., at §§ 421 (USTR report), 413 (authorization of appropriations).
1 See Questions andAnswers: U.S.-China WTO Agreement (visited December 1, 1999),
<http://www.uschina.org>; see also Samuel Berger, U.S. Policy in East Asia: Trade Rela-
tions With China, Remarks at the East Asian Institute, Columbia University (May 2, 2000):
"China's entry into the WTO- into the world economy- will enmesh China into an intema-
tional system that will hold it to rules and laws universally applied. In fact, for the first time,
some of China's important decisions will be subject to the review of an international body,
with11binding settlement procedures to resolve disputes."
3See, e.g., Terence P. Stewart & Mara M. Burr, The WTO Panel Process:An Evalua-
tion of the First Three Years, 32 INT'L LAWYER 709, 721 (1998) (time required from initia-
tion of the dispute process through implementation of panel decision "can easily reach four
years and may approach five years in certain matters.").
Bird in a Cage
20:383 (2000)
criticism of China that some of its members pronounce, has generally re-
fused to fund programs to further the rule of law in China. However, the
legislation that authorized extending PNTR treatment to China authorized
the Secretaries of Commerce and State to establish "a program to conduct
rule of law training and technical assistance related to commercial activi-
ties" in China and a separate program of training and assistance related to
the development of the legal system and civil society. 114
It certainly seems desirable to expose Chinese lawyers, judges and of-
ficials to Western legal institutions and values, and thereby to strengthen
their understanding of an autonomous legal system. In order to design ef-
fective programs it is desirable to understand their underlying assumptions,
their appropriateness to the country and situation in which they are applied,
and their real limitations. As William Alford has suggested, however, pro-
grams for the export of American legal and political institutions would
benefit from critical evaluation. 5 Suffice it to say here, programs of
training within China that focus on specific institutions ought to be pre-
ferred to the tourism that is often conducted in the name of cultural ex-
change, although in-country programs are expensive and difficult to run. At
the same time, it should be realized in the U.S. that although improving le-
gality generally ought to lead to improvement in China's performance in
human rights-related areas, this connection is not likely to appear very
quickly.
Do unto others. Many observers over the years have pointed out that
U.S. policy has been equivocal toward some of the most important interna-
tional covenants, the very ones that express the human rights that the United
States condemns China for denying to its citizens. It signed the Interna-
tional Covenant on Civil and Political Rights in 1992 only after insisting on
many reservations, and it has not signed the International Covenant on Eco-
nomic, Social and Cultural Rights (China has signed both). If the U.S. is to
be credible and not merely moralistic,
16 it should improve its own record and
sign the major UN agreements.
VTII. CONCLUSION
The foregoing analysis of Chinese legal reform suggests some impli-
cations for the orientation of U.S. policy and for the understanding of China
on which such policy should rest. U.S. policy-makers ought to be more
self-conscious about the manner in which the U.S. conducts its dialogue
" 4 U.S.-China Relations Act of 2000, Pub. L. No. 106-286, § 51 1(a), (b)(1), and (c), 114
Stat. 880 (2000).
115Alford, supra note 98.
" 6See Peter Van Ness, Addressing the Human Rights Issue in Sino-American Relations,
49 J. INT'L AFF. 309, 328-330 (1996).
with China and more aware of the images of American institutions and
history that color that dialogue.
Although my focus here has been on China's attempts to build legality
within its own borders, the international implications of these efforts are
both considerable and inescapable. I believe that because of the absence of
a unifying concept of law and a considerable fragmentation of authority,
China does not have a legal system. I would argue further, that the difficul-
ties of the courts in applying Chinese law and enforcing their judgments
display a weakness in the basic capacity of the Chinese state that presents
critical issues for the Chinese leadership and populace if they wish to con-
tinue economic reform and build strong and stable institutions. These is-
sues, moreover, are not China's alone, because they concern other nations
that would live with China peacefully and constructively.
The difficulties that beset Chinese litigants in the courts also impede
the enforcement of China's environmental laws, among examples of do-
mestic laws with international implications in addition to those discussed
above related to Chinese membership in the WTO. 1 7 The ineffectiveness
of Chinese legal institutions will impair China's ability to fulfill interna-
tional obligations, even after they have been freely undertaken by repre-
sentatives of the central government. This weakness promises to create
difficulties in China's international relations and will retard Chinese efforts
to participate constructively in the international community.
An understanding of the current state of Chinese legal institutions sug-
gests realistic perceptions of how Chinese society is governed, the
achievements of Chinese reforms and current limits on institutional change
in China. In domestic U.S. politics, debate over China policy has become
too narrowly focused on the dichotomy between trade and human rights,
which human rights activists have cast as a struggle between Greed and
Morality. There is more to China policy than issues related to either, but
successive administrations, including the Clinton administration, have
failed to present the full spectrum of issues in their complexity. Debate
within the U.S. has become both narrow and shrill and perspective on law-
related issues has been lost. Regardless of differences between the U.S. and
China on such issues, they must not obscure the need for the U.S. to engage
China in dialogue on strategic and other international issues of concern to
both nations. These include peaceful settlement of international boundary
disputes; control of carbon monoxide emissions that threaten the environ-
ment of all peoples, not only Americans; and resolution of strategic issues
such as those involved in keeping and assuring peace on the Korean Penin-
sula.
7
1 See ELIZABETH ECONOMY, CASE STUDY OF CHINA, REFORM AND RESOURCES: THE
IMPLICATIONS FOR STATE CAPACITY INTHE PRC (1997); William P. Alford & Yuanyuan Shen,
Limits of the Law in Addressing China's Environmental Dilemma, 16 STAN. ENVTL. L. J.
125, 139-143 (1997).
Bird in a Cage
20:383 (2000)
The tone of U.S. policy toward China merits more attention and sub-
tlety than it has received, although the two nations are unlikely to influence
each other's domestic institutions very much. Under these circumstances,
tone becomes substance. That is why the U.S. should not preach, but rather
it should attempt to persuade and to project quiet authoritativeness.
American impatience with the Chinese inability to tailor their institu-
tions to American standards could lead to further scolding by the U.S. and a
search for ways to punish China for failing to change its institutions as
quickly as we would like. Further deepening of U.S. disenchantment with
China could reinforce the cycle between excessive hopes and exaggerated
disappointments that has marked U.S.-China relations for many years. By
contrast, refocusing U.S. policy on law-related issues along the lines sug-
gested here would promote greater clarity of American perceptions, both of
the genuine transformations in Chinese society since 1979 and of the dis-
tance of the journey ahead that is needed to remove authoritarian obstacles
to further meaningful reform. The task of formulating a policy toward
China that draws on an understanding of its legal institutions is fearfully
complicated by the difficulty of clearly defining foreign perspectives on
China. Legal reforms even complicate the problem, because they seem to
make it possible to discuss law using a vocabulary that is common both in
the West and in China. That newly shared vocabulary conceals, however,
underlying differences in meanings that stem from profound contrasts be-
tween historical and current Chinese and Western notions about law and
governance.
When I wrote twenty years ago I was much concerned with the diffi-
culties of understanding Chinese law from the perspectives of the West, and
the recent development of Chinese legal institutions has increased rather
than allayed my concern. I expressed the self-evident notion that using our
intellectual and legal categories might distort such institutions as the Chi-
nese criminal process. I emphasized, too, that focusing on the current
situation might cause us to neglect the influence of the past. Now, the ex-
panded opportunities of foreigners to observe Chinese culture suggests that
many traditional attitudes toward life, not to mention law, have continued to
exist despite sustained Chinese Communist attempts to eradicate them.
One obvious implication of self-conscious questioning about Western
perspectives is that the domain considered "legal" and the boundaries be-
tween it and other areas of Chinese state, society and economy will inevita-
bly not with comparable Western concepts. Chinese will seek justice, as
they see it, in places and institutions that are not part of the formal legal ap-
paratus. Thus, some peasants have become aware of their rights under new
national policies and laws and have invoked them to defend themselves
against arbitrary cadres, but by protesting rather than going to court.118
"8 See Oi, supranote 82; see also Pearson, supra note 82.
Law, it seems, will not necessarily turn up in behavior and institutions that
are denominated as "legal," whether by foreigners or Chinese.
It is essential to remain mindful of the ease with which Americans in-
sist on comparing foreign institutions against oversimplified models of sup-
posed American counterparts. A student of Japanese law reminds us that it
is common in the United States to "exaggerate the importance of law and
neglect other means for social ordering."" 9 Americans, especially policy-
makers for whom the rule of law provides a rhetorical device with irresisti-
ble appeal, are not accustomed to expect that the functions performed by
formal legal institutions in the United States might be discharged by combi-
nations of institutions very unfamiliar to Americans. On Taiwan, for exam-
ple, where democratic institutions have matured in recent years, law has
been said to be "marginalized," because economic development has been
fostered by a combination of modem legal institutions,
120
networks of rela-
tionships, and enforcement by organized crime.
Foreign observers must continue to question and clarify their assump-
tions, especially those that rest on the notion that China will follow some al-
ready clear path of development that has already been followed in the West.
For example, some in the West assume that newly emerging groups and
strata in post-totalitarian Chinese society, such as lawyers, will advance le-
gality. At this juncture, however, "some among the PRC's burgeoning
corps of legal professionals, far from serving as a vanguard of legal and po-
litical reform, have much to gain from an economy that remains perched
between plan and market, subject to the discipline of neither."' 121 Chinese
lawyers and businessmen should not necessarily be expected to seek auton-
omy at the current early stage of the post-Deng history of China, and ex-
pectations for these institutions that are common in the West often
caricature Western history. 122 It is simply too early to predict the future
evolution of relations between China's state and its society, and the extent
to which their mutual relations will shape and be shaped by law. Notably,
the prospects for emergence of a civil society that could generate pressure
for greater legality are uncertain. The CCP is determined to control social
organizations, but "its capacity to realize this control is increasingly lim-
9
11 JOHN OWEN HALEY, AUTHORITY WITHOUT POWER: LAW AND THE JAPANESE PARADOX
15(1991).
0
12See Jane Kaufman Winn, Relational Practicesand the Marginalization of Law: In-
formal FinancialPracticeofSmall Businessesin Taiwan, 28 L. & Soc'Y. REV. 193 (1994).
121Alford, supra note 98, at 1707-08.
122"The ideology 'of the West'...always comes down to a political tradition of freedom
under law or the rule of law. The difficulty with this self-congratulatory view of the Western
past is that it flies in the face of the most obvious facts of history, there is no one Western
tradition....To say that a political tradition, 'freedom under law' ties all that together in a
neat pattern is an ideological abuse of the past. It falsifies the past, and renders the present
incomprehensible." JUDITH SHKLAR, LEGALISM: LAW, MORALS AND POLITICAL TRIALS 22
(1964).
Bird in a Cage
20:383 (2000)
ited,' '123 and social organizations that are permitted to exist may not neces-
sarily be as compliant with the state as they appear. One thoughtful ob-
server cautions that:
We need to develop explanations that allow for the shifting complexities
of the current system, and the institutional fluidity, ambiguity and messiness
that
level.operates
14 at all levels in China and that is most pronounced at the local
No single perspective on Chinese law can prevent uncritical judgments

based solely on Western development--or on myths about Western devel-
opment. China presents, and will continue to present, an unruly and con-
tinuing mix of Western concepts of legality with Chinese values and
institutions that are sometimes hostile to them. Moreover, the two decades
of reform are only a historical instant, and Chinese society is in the midst of
dramatic ongoing change. We should, therefore, attempt only restrained
interpretations of our disorderly impressions of China, all the while remem-
bering that we must understand ourselves as well.
Once again, as when I wrote in 1979, China is in transition.

China's accession to the WTO should prove to mark yet another important
stage in the continuing journey by symbolizing its deepening involvement
in the international community, and in a manner that will involve Chinese
legal institutions with other nations and their citizens more than ever before.
I have limited myself to the most cautious of predictions here, recognizing
all the same that China has the capacity to surprise. I will end by recalling
the metaphor in the title of this article: the bird may gain more space in
which it might fly, but its freedom is presently determined by political, eco-
nomic and social forces in China that vie outside its cage.
123Tony Saich, Negotiating the State: The Development of Social Organizations in

China, 161 CHINA Q. 124, 125 (2000).
124 1d. at 141.

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Northwestern Journal of International Law & Business

Bird in a Cage: Chinese Law Reform after Twenty

Follow this and additional works at: http://scholarlycommons.law.northwestern.edu/njilb

* Consulting Professor of Law, Stanford Law School

II. MAJOR ACCOMPLISHMENTS OF LAW REFORM

and that implementation be adjusted to reflect specific local conditions; its

4See Kenneth G. Lieberthal, Introduction: The "FragmentedAuthoritarianism" Model

B. Creation of the legal framework for a marketizing economy

C. Construction of the judicial system

1. The growing activity of the courts

1'See Departmentof Grass-Roots Work, Ministry ofJustice, in PEOPLE'S MEDIATION IN

1H1. CONTINUING PROBLEMS AND OBSTACLES TO FURTHER REFORM

authority also stems from a general rule-making power that is deemed to be

14See PETER HOWARD CORNE, FOREIGN INVESTMENT IN CHINA: THE ADMINISTRATIVE

B. Curbing bureaucratic discretion

pensation Law (effective in 1995) defines the situations in which govern-

and ministries, and thereby begin to impose limits on administrative arbi-

C. Continued politicization of the criminal process

D. Constraints on judicial autonomy

1. External influence on courts by the national-Partystate

2. Externalinfluences on cases by the local Party-state

(a) Adjudication with Chinese characteristics

E. Leadership ambivalence in policy toward law

obvious example is the use of criminal sanctions against any manifestations

IV. FORCES IN CHINESE SOCIETY AFFECTING LEGAL REFORM

A. A non-state economic sector emerging and in flux

The current configuration of institutions is transitional, and local gov-

B. The state sector remains backward

C. The decline of the power of the central party-state

D. The crisis of values in China and decline of communist ideology

are lacking. 71 Relations among Chinese are changing, as new networks of

V. CHINESE LEGAL CULTURE: CONTINUITY AND CHANGE

A. The continuing influence of traditional Chinese attitudes

73 US-China Business Council, China's Political Developments, in US-CHNA BUSINESS

to exert its influence. The traditionally dominant attitudes were reinforced

B. Changing popular attitudes toward law

tions to be protected by rules enforced meaningfully and consistently by the

VI. THE UNCERTAIN FUTURE OF CHINESE LAW REFORM

particularism unhealthy for the growth of national regulation and law-

continue the development of administrative law. 87 But even though Chi-

VII. IMPLICATIONS FOR U.S. POLICY

A. Some necessary basic assumptions

the moral strength of American exhortations about the superiority of the

such as due process, onto China,91 analysis derived from Anglo-American

2. The needfor restraintin urgingrights-basedpolicies on China

authority., 98 He argues that the "institutions, personnel and values needed

3. Promotingthe rule of law in China

98 WILLIAM P. ALFORD, To STEAL A BOOK IS AN ELEGANT OFFENSE: INTELLECTUAL

Chinese admission to the WTO will, however, be conditioned on Chi-

The draft Protocol of Accession also contained language in which China

No single perspective on Chinese law can prevent uncritical judgments

Once again, as when I wrote in 1979, China is in transition.

123Tony Saich, Negotiating the State: The Development of Social Organizations in

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