Rule of Law, Chinese Style

Chan Koonchung’s acerbic 2009 novel The Fat Years describes a country so engorged on its rising prosperity and wealth that it is in danger of simply sinking under the weight of self-satisfaction. The novel was set in 2011, a year that has now come and gone. Still, as in many fictions trading in prophecy, the writer did pick up on one larger truth: China’s years of pumping out material wealth without much thought for the future are now ending. The Hu Jintao years were truly “the fat years,” where pretty much anyone, anywhere (and that includes a fair number of foreigners) could make easy money in or through China. Now things are harder. Five years after the developed world fell into recession, China is entering an age of austerity with Chinese characteristics.

Austerity hovered above the Third Plenum outcomes in 2013. The plenum pledged to tame China’s bloated state-owned enterprises (SOEs) by unleashing market forces on them and taking away their subsidies – all in the hopes of unlocking new sources of growth. Beijing also proposed accelerating China’s journey toward service sector domination by building an indigenous finance sector as quickly as possible. There were even hints that powers might now be decentralized in some fiscal areas, though Beijing would continue to hold the political strings. In today’s China, expectations are higher than ever, but the low-hanging fruit is all but gone. The search for efficiency in the face of slowing growth was evident in all of the 60 points in the 2013 plenum statement.

If last year was about efficient economics, then the 2014 plenum was about the Party’s vision for efficient politics. Of course, such a crude statement does not appear in the text of the Plenum summary. In the statement, politics takes the garb of “law,” but in this context they boil down to the same thing. The “rule of law with socialist characteristics” must create a more predictable environment where officials serve better, put their government duties above personal gain, and are fully engaged in the great mission to deliver a moderately prosperous country by 2021, when the Communist Party of China celebrates its hundredth anniversary.

The fundamental task of the Party now is to construct a more sustainable, balanced economy, where service sector activity rises, consumption increases, and the new urban middle class is kept happy. To achieve these goals, law is key. Law helps mediate between contesting interests and groups in society. The law also helps placate a more rights-conscious citizenry, who need to be kept satisfied not just as economic actors but as property owners, non-state employers and employees, and innovators. Law provides security for personal property and financial assets, including intangibles like intellectual property, which has been exposed in China to illegal plunder and almost total lawlessness. Entrepreneurial China needs the law now so that its most important asset – the intellectual capacity of its vast population and their hunger for a better future – can fully grow and develop. Law matters to politicians in particular because it delivers a sense of security to people. They invest materially as well as emotionally in the future of the system. The rule of law is the ultimate win-win.

These ambitions are all very laudable. Basing legal development on the 1982 Chinese constitution is logical. Having a division of responsibilities between courts and a better training and funding structure for the justice system in China is also good. Since the 1980s, no country has done more to try to build, almost from scratch, a modern legal system than China.

But China’s legal system is still very much a work in progress. Beyond the overarching political narrative outlined above, the Fourth Plenum also had to face up to the more basic issue of capacity. Nicely written laws are of no use without a robust system that provides legal interpretation and implementation, along with well-trained people who are able to undertake this responsibility. Judges are crucial here; their pronouncements and performance will deliver the confidence in the system that China has lacked until now. But nobody really believes that this sort of change can happen overnight, for the simple reason that it requires not just administrative and procedural reforms but cultural change – the internalization of legal understanding and respect for the law that the Plenum refers to as “public awareness of the law” and the “building of a law based society.”

It is in this cultural area that we find the conundrum. As in almost every other major recent Party pronouncement, the plenum statement works from the assumption that China needs to protect the unique role of the Party. For the Fourth Plenum, this means that the rule of (or by) law exists in a context where the Party itself remains the ultimate legal arbitrator.

You will not find this stated in the current Chinese constitution. But in practice the highest court in China is not the entity that carries the name “Chinese People’s Supreme Court” boldly carved outside its building in Beijing. That court is in fact answerable (in ways that are well known but little understood) to a higher authority: the Standing Committee of the Politburo (PBSC). These seven men are the supreme legal decision makers. They might not set the details of the law, but they certainly draw its parameters. This makes the PBSC the final crucible of law; it is China’s real “supreme court.” In this context, the Party transcends legal restraint and gives itself the power to act in super-judicial ways. The driving motive for this is not legal, however, but political – a pragmatic acceptance that China’s current phase of development needs the Party’s guidance. The CCP believes China will not develop further if it uses another system, one which might be less unified. 

And this is the key point. The plenum vividly illustrates a vast fault line between multi-party democratic countries and China. The key difference is China’s privileging of political imperatives over legal ones. The U.S. or EU understanding is that the law and politics need to sit side by side, contesting, improving and challenging each other. The Chinese approach at the moment is to place politics above the law. That might make for quicker, more unified, and more operational decision making in some areas. But does this system really produce justice? That is the vast question underlying the Fourth Plenum.

We now know what sort of law the Party wants. We will have to wait and see whether it really manages to convince its key constituency that under this arrangement it can actually deliver. Success or failure will ultimately be judged by the Chinese people, for whom the Party claims to act and who will be the chief recipients of the justice it is trying to deliver through legal reforms.