Archives: China's courts

By: Steve Dickinson

The PRC State Council Information Office just published  a White Paper on Judicial Reform in China. The purpose of the White Paper is to provide a snapshot view of the progress of legal reform in China over the past ten years. Readers who are interested in the current state of the Chinese legal system and the projection of future trends should take a look. Even for those who do not fully agree with the assessment will benefit by seeing what the top level of the Chinese government believes is important about China’s legal system and its future development.

Four issues raised in the White Paper are of particular interest to foreign investors in China:

1.  The number of lawyers and lawsuits is rapidly increasing. This is contrary to what many foreign investors believe and the implications of this must be understood. The White Paper provides the following basic statistics:

  • There are currently 18,200 law firms in China, up 31.6% from 2000
  • There are 210,000 lawyers registered in China.
  • In 2011, Chinese lawyers acted as counselors for 392,000 clients, up 24.6% from 2008.
  • Chinese lawyers handled 2.315 million litigation cases in 2011, up 17.7% from 2008.

The White Paper does not mention that the number of judges in China has remained static at about 200,000 over this same period.  This has meant an increasing workload for the judges and has negatively affected the quality of decisions. Nonetheless, Chinese people are still making active use of the court system to resolve disputes.

Most foreign business people are unaware of the large amount of litigation that occurs in China and tend to believe that they will never be sued. They therefore do not prepare for lawsuits and, when sued, they do not take the matter seriously and often do not respond promptly and effectively. This is a mistake. As the numbers above show, there are a lot of lawyers in China and they make their money suing people. When a dispute arises, the likelihood of being sued in China is actually quite high. Far higher for example than in Japan or in Korea.

2. China has made major progress in the administration of civil justice.

The improvements fall into four areas:

1) The functions of case filing, trial and execution have been clearly separated. The major change here is in the substantial improvements in executing on judgments. Though this may sound like a purely technical issue, it actually has important practical consequences for foreign companies doing business. Criticisms of the Chinese legal system often center on the difficulty in enforcing judgments. As a result of recent reforms, most Chinese courts have a created a department that focuses exclusively on enforcement. This has resulted in substantial improvement in the enforcement of monetary awards in most major jurisdictions. In addition, pre-judgment attachment of assets has become much more effective, adding a major tool for enforcing monetary awards. For foreign investors, this change cuts both ways. It has made litigation against Chinese companies more attractive since the Chinese company now has a real fear that any judgment will be enforced against it by seizure and sale of assets. On the other hand, it means that where the foreign party is a defendant, there is now a substantial risk that an adverse decision will have a strong negative impact. We are already seeing the impact of this in the willingness of Chinese companies to settle our clients claims against them.

2) The application of the law has been clarified through legal guidance. China is a civil law system, meaning that decided cases are not binding. This lack of case law precedent is often cited as a weakness of the Chinese system, since the laws are written in a sketchy and often vague manner. The Chinese themselves have recognized that weakness and have filled the gap in two ways. First, the Supreme People’s Court regularly issues binding guidelines on the interpretation of important statutes. Second, the SPC and local high courts regularly publish authoritative cases with extensive commentary. These measures have been well received by Chinese lawyers and judges and have substantially improved clarity in the interpretation of Chinese laws. This too has led to Chinese companies focusing on settling claims so as to avoid being sued and losing.

3) Standardization in awards.

The Supreme Court has worked to achieve greater certainty and predictability in damage awards in civil cases. This removes much uncertainty in the litigation process and it also decreases opportunities for local judges to engage in bribery or other unacceptable practices.

4). Case management has been improved.

China’s major courts have installed modern case management systems. Many courts now use an on-line management system that allow parties to independently monitor the progress of a case. In many jurisdictions, streamlined case systems have been adopted that allow for quickly resolving simple matters and small claim matters. The result of all this is that Chinese lawsuits proceed to trial much faster than is common elsewhere in the world. This speed can take foreign parties very much by surprise. A Chinese lawsuit can be filed and tried in the time it takes merely to provide an answer in North American and European courts. From my experience, Chinese courts are not concerned about the thorough preparation of a case. They are more concerned that a case be heard quickly. The Chinese court motto seems to be “Justice delayed is justice denied.” Foreign investors need to take this into account. When service of a lawsuit is received, the defendant must respond immediately. There is no room for delay.

In part two, we will discuss the impact of China’s legal reforms on criminal cases.

 

In the early years of this blog, when discussing China’s court system, I would make it a point to emphasize that I was limiting my comments to how the courts handle business law matters. I did this for two reasons. One, my sense is that the quality of court handling of business cases is very different from the quality of judging given to criminal matters. Two, I am not the least bit qualified to talk about how Chinese courts handle criminal matters as I never studied Chinese criminal procedure and my firm has never (and will never) represented a Chinese criminal defendant. Working in tandem with Chinese lawyers, we have represented a number of foreigners in criminal proceedings in China, but those cases do not qualify me to speak on China’s criminal justice system as a whole. For these same reasons, I always beg off whenever journalists contact me for my legal analysis on this or that high profile criminal case in China. 

I thought of all this today while reading a post by Stan Abrams, entitled, “Zhao Lianhai and Criticizing China’s Legal System.” Stan is all up in arms (and few people do better when up in arms than Stan) about a Peter Foster blog post, entitled, “Zhao Lianhai’s Apology Exposes the Utter Mess of China’s Legal System.” Grossly summarizing Stan’s ire, it stems from Foster’s conflating the Zhao Lianhai case into a claim that China’s entire court system is rotten to the core and utterly worthless.

Stan then makes the following case:

But to take the criticism to the next level, saying that China’s legal system is an “utter mess” or that it is functionally nonexistent, well, this is way over the top. Perhaps Foster falls into use of such hyperbolic language because the judicial cases he looks at are the “bad” ones, like that of Zhao Lianhai or perhaps Xue Feng, a US geologist sentenced to 8 years on a state secrets charge. 

One can criticize these cases on their merits, on the choice of the government to get involved in the first place, or on the resulting erosion of public confidence of the judiciary. But if you focus on these cases, you get a very skewed view of China’s legal system.

Lots of law professors have written entire books about this subject, so let me make some sweeping generalizations of my own here in the interest of brevity. China’s legal system is complicated and deals with a wide range of subjects. Highly-charged political cases involving whistleblowers and dissidents are important cases, but they represent a very tiny fraction of judicial activity.

China has a thriving court system, and the number of civil cases, for example, has skyrocketed in recent years along with economic growth. Obviously the public retains some confidence in parts of the legal system here.

Speaking for myself and my own experiences as a lawyer, I have seen tremendous strides made within the legal sector as successive waves of reform have targeted the way courts are run, cases are handled, and judges are selected and trained. China’s economy would not be where it is today without a functioning legal system, its many flaws notwithstanding.

I don’t think anyone would point to the Zhao Lianhai case as an example of China’s legal system at its best. On the other hand, it and other politically sensitive cases represent only one aspect, albeit a very significant one, of China’s judicial framework and its approach to Rule of Law.

Let’s not pretend that a functioning legal system doesn’t exist in this country or that it has not made tremendous progress to date. Whether it can ever reach a point where Westerners would be comfortable with China’s interpretation of Rule of Law, however, is a question for the future.

I completely agree with Stan and I expressed similar views in a 2006 post, entitled, “The Yin And Yang And The Apples And Oranges On Chinese Courts.

What do you think?

The Chinese Law and Society Blog just did an interesting post, entitled Court said no to government [link no longer exists]. The post describes how a Ningbo Intermediate court overturned a lower court to hold that a local government acted illegally in “forcefully demolishing a resident’s house.” The post concludes by calling for “Thunderous Applause!”

Thunderous applause is not warranted.

The post has this to say about China’s courts and its relationship to the government:

As we all know, Chinese court is actually an affiliate of the government because the latter funds the former and this is the case from the central government downward to the bottom local level. Courts have been viewed as an instrument by the government to enforce and implement governmental policies, as has been true from the establishment of the national institutions.

The post notes there have been some cases where courts have “boldly and courageously” said “no” to government misuse and abuse of power and these cases have attracted much media attention. According to the post, these anti-government rulings typically occur at the appellate level because that court is “hierarchically higher than the government” involved in the dispute.

In this particular case, the Yuyao municipal planning bureau ordered Zhu Lifeng to tear down an illegal structure he had erected “around his residential area.” Zhu’s lawyer argued that the municipality violated the PRC Municipal Planning Law which mandates court approval for a demolition if the party whose property is up for demolition seeks court intervention. In other words, the government cannot just go ahead and demolish the property with the case pending. The municipality ignored that rule here.

China Law and Society sees the Court’s decision as significant:

The court’s decision is of great significance. The whole nation is still on the heat and craze of land enclosure often leaving the farmers or urban citizens crying in grave grievance. The situation is especially acute in Zhejiang province to which Ningbo City belongs since this province has the most dynamic economy which has posed high demand for industrial land.  According to the report entitled “a great danger to lawyers” released by the Human Right Watch, there has constantly seen protests and clashes between the local farmers and the local government which often forcefully seizes the farmer’s lands without just compensation.

Given the situation described above, the court’s decision is definitely precious and valuable in that it may convey a signal to at least the local government that they can not use their power without constraint and they should really discharge their duties according to law.

Thunderous applause!

Though I agree this was a good decision and one that should inspire some optimism, I am not clapping.

I do not view the decision as terribly significant. First off, the problem with the relationship between the Chinese courts and the Chinese government goes way beyond funding. The problem is that the Chinese courts are the Chinese government. China’s local courts are essentially the local government and things just move up from there. Chinese courts are not autonomous and until they become autonomous, decisions against the government will be unlikely. Until anti-government court decisions do not require judges to act “boldly and courageously,” China’s legal system will always greatly favor the government.

Second, I see this decision as more procedural than substantive.  Near as I can tell (and this is strictly from reading Chinese Law and Society’s blog post), the decision said nothing about the legality of property demolitions or seizures. It merely said that if the government is going to engage in such actions it must follow the rules for doing so.

I am often posting on the fairness of China’s courts for business disputes. See The Yin And Yang And The Apples And Oranges On China’s CourtsChina Courts And Abuses Of PowerChina’s Courts Are Fair, and “China’s Courts are Fair, Part II. But at the same time, I do not believe that cases involving the Chinese government as a party can be fairly handled. Yes, no doubt, China has countless eminently fair judges. But until China’s courts become independent from its government I will withhold my applause.

I would also advice foreign companies doing business in China to take heed of this court decision and to realize how it can impact you. Our China Lawyers are always advising our clients not to violate Chinese law even if given permission/encouragement to do so by local government officials. We are always saying that higher levels of the Chinese government (like Beijing) can and often do audit what lower level governments are doing and when they find illegality, they typically void the transaction.

What this means for you is that if you are operating illegally in China (even if you are doing so at the behest or approval of a local government official) you can and probably eventually will be shut down by a more powerful governmental oversight body and you will have no recourse through the Chinese legal system. Our China attorneys have seen this happen to foreign companies many times.

In an article entitled, “China moves against local meddling in court cases,” The Peoples’ Daily reports that the Chinese government is increasing its efforts to prevent local party interference with Chinese courts.  A notice jointly issued by the Central Commission for Discipline Inspection of Communist Party of China, the Supreme People’s Court, and the Ministry of Supervision “orders” courts to “report swiftly any meddling by local cadres in the enforcement of court rulings.”

This is a good sign.

Though we often argue that China’s courts are fairer in their handling of commercial legal disputes than widely believed (see “China’s Courts Are Fair“) we readily admit they are not always fair and that local party interference is an impediment.  In the commercial context, local party interference usually manifests itself at one of two points in the judicial process: in influencing the decision itself and in the enforcement of any judgment or court order.  Or, as the People’s Daily so bluntly puts it:

Party officials have been found abusing their power to illegally meddle in or hinder the execution of court rulings, seeking to protect vested personal or departmental interests.

Some officials refuse to cooperate with local courts despite their legal obligations in the execution of court rulings, while others have been known to incite riots to resist the enforcement.

In other words, sometimes you can get a court order requiring a company to pay damages, but interference from local officials may prevent the prevailing party from ever actually being able to collect.  Fortunately, China is not completely monolithic and so it is often possible to circumvent local interference by taking the matter to a higher, less local, court, or by securing the assistance of some other, more powerful entity.

The article goes on to state that the joint notice calls for judicial officials “to build a report system, under which all local courts should report promptly all kinds of interference from local cadres to their party committees, or to courts of higher levels if necessary” and for “local courts to pass on allegations and evidence of illegal interference to discipline and supervision departments.”  The article concludes by cryptically stating that “officials involved in these cases should be held accountable, according to the system.”

I have always viewed China’s efforts to clean up the environment and to clean up its court system as similar in many ways.  Recently, in a post, entitled, “Is China Going Green, Part VIII? — Well The Wall Street Journal Says It Is So You’d Better Believe It,” I had this to say about Beijing’s efforts on the environmental front:

I am constantly blogging on how China is serious about improving its environment, most recently in this post, “Is China Going Green? — Part VI — So Green It Is Going To Hurt” a couple days ago.  China is serious about the environment for one simple reason.  It wants to keep its citizenry satisfied because satisfied citizens do not to take to the streets. Clean air and clean water are the basics citizens expect from their government.

I often add that the big question regarding China’s environment is whether Beijing will be able to get the local officials on board.

The same holds true for cleaning up China’s judicial system.  Beijing is serious about wanting a fair and effective court system (at least for business litigation matters) and most of the judges and the lawyers want that too.  The real question is whether Beijing will be able to get the local officials on board.

About a week ago, we did a post touting the fairness of China’s courts, entitled, “China’s Courts are Fair.”  That post was based on Professor Tseming Yang’s (hence the “Yang” in my title — groan!) post on his Citizen Yang blog, entitled “Local Governments Lose 30-50% of Administrative Lawsuits,” noting “local [Chinese] governments lose an astonishing 30-50% of law suits in China.”

We said we were not astonished by these numbers and we referred back to one of our previous posts, entitled, China Rises — The TV Show/”Food is Heaven,”where we noted the success rate small players had in their lawsuits in Chinese courts against big polluting companies.

We then went on to qualify my “China’s courts are fair” assertion by noting that Chinese courts virtually never rule against the government when central government policy is at issue and to further quality our statement by noting that we are ignoring criminal and political cases.  we also stated that “the chances of getting a fair trial are much greater in prosperous commercial cities like Shanghai, Tianjin, or Qingdao, than they are in a small city in Anhui Province.  We know too that a foreign company prevailing against a powerful local company in a Chinese court is always going to be less likely than if all parties are of the same strata:”

So China’s courts are not always fair.

But, they are fair way more often than credited by the western media and I am absolutely convinced (as are all of the Chinese lawyers with whom we work) that they are fair often enough to make it as ill-advised to do business in China without written contracts or Intellectual Property (IP) protections as to do business that way in the West.

Even if China’s courts are fair only 60% of the time, this is enough to cause the rational Chinese businessperson to make decisions based on legal ramifications.

Professor Yang posted a comment to our post (here), disagreeing with our assertions regarding China court fairness.  Before we respond to Professor Yang, however, we would like to thank him and all our readers who comment on our posts, particularly those who disagree with us.  China is a hugely complex place where the only constant seems to be change.  Your comments sharpen our knowledge and make for a more interesting blog, and for that, you have our heartfelt thanks.

Professor Yang states that the successes achieved by the environmental lawyer on “China Rises” were “unusual” and not due to Chinese courts “working well:”

I met “professor Wang Can-fa, the Beijing environmental lawyer featured in the “China Rises” documentary, last fall.  His success, by his own statements to me, has been unusual.  In that sense, I would not (and I think that he would agree with me) characterize his successes as proof of the courts working well; rather it indicates that it is still possible to prevail against the odds when one has a high-profile Beijing lawyer taking one’s case.

We have never talked to a good litigator who does not ascribe his victory solely to his own brilliance.  We have no doubt Wang Can-fa is a great litigator (We could tell that just by how thoroughly he prepares his cases), but even a great litigator cannot win if the case is fixed.  One simply cannot get away from the fact that Mr. Can-fa’s success rate is high enough to prove that, at least in the cases he tries, the fix is not always in.

Professor Yang then says we are comparing apples to oranges:

The reason why I think you are comparing apples to oranges is that judges act differently depending on the type of case.  When they have commercial disputes involving businesses or, for that matter, lawsuits between private individuals, I would expect them to act quite impartial, save for problems of direct bribes and corruption.  However, whenever one deals with lawsuits against state-owned enterprises or against local and provincial governments themselves, I think that judges act quite differently.

We agree with Professor Yang that Chinese judges do behave differently depending on the case, but I thought we said that very thing in our post by distinguishing between commercial and criminal cases, between cases in Shanghai and cases in Anhui, between cases involving local companies and those involving foreign companies, and when we placed cases involving Beijing government policy in their own separate sphere.

Professor Yang then talks about how there is no judicial independence in China:

I am sure that you are aware that under the Chinese governmental system, judges are subordinate to other governmental officials at that level of government.  So local judges are essentially subordinate to the top local official.  There is no judicial independence in China – or at least not as of yet.  (However, there are a number of Chinese constitutional law scholars and judges who advocate judicial independence.)  So the reality is that judicial outcomes are controlled, or at least strongly affected, by the desires of other local government officials.

Professor Yang’s description of China’s court system is correct, but we disagree if he is claiming this means China’s judges are always beholden to the local government. The lowest Chinese courts are usually controlled by the city (at least with respect to China’s bigger cities) in which they are located, with the higher courts usually controlled by the province.  But, to a certain extent, Beijing controls everything.  The government in Beijing directly controls China’s attorney generals and one of the jobs of the attorney generals is to make sure judges rule fairly.  If a citizen (or a company) has a complaint about a judge’s ruling, he can take it to the local Attorney General and if the Attorney General agrees the ruling was wrong, the Attorney General can take various steps to remedy the situation.  Another Beijing ministry monitors judges for corruption.  So though China’s judges are to a great extent controlled by the local governments, Beijing still wields ultimate authority.

United States Federal Judges are appointed for life so, to a large extent, they are not controlled by anyone but themselves. This is most emphatically not the case in China.  No judge in China is independent to the extent we think of judicial independence in the West. I once asked a couple of Chinese lawyers what would happen if a local, lower court judge were to issue a case ruling that contradicted a previous Supreme Court ruling.  It took these lawyers about five minutes to get their heads around my question (asked in perfect Chinese by Steve) because, as they eventually told us, this simply has never and would never happen.

But, this lack of judicial independence does not mean every Chinese judge takes orders on his or her cases directly from the government.  Beijing wants its citizens to resolve disputes in the courts, rather than with violence, protest, or local party hacks.  Beijing therefore wants its citizens to trust the courts.  The Citizens will not trust courts that are inherently biased and corrupt.  Beijing therefore gives give judges pretty free reign to rule on those cases that do not directly impact Beijing government policies and Beijing tries to monitor corruption.

Professor Yang then states that when a lawsuit is brought against a local government, the fix is in:

When a lawsuit is filed against the local government, as often occurs with land takings and environmental cases, the dynamics should be easy to figure out.  These dynamics are at the root of current social unrest about land takings in China and the many petitions that are filed in Beijing about local government misdeeds – because the courts do not provide a remedy for such complaints.

The problem with this argument is that it essentially refutes Professor Yang’s own post on how plaintiffs win these cases 30 to 50 percent of the time.  But Professor Yang now finds his own numbers suspect:  “I [Professor Yang] have some doubts as to whether they are in fact accurate.”

Professor Yang also ignores that the appeals of these cases are usually before Judges who are not so beholden to the local officials.  For example, if one loses a case at the Qingdao city level, one can appeal it to the appellate court in Jinan, Shandong Province’s provincial capital.

Theory is a Law Professor’s stock in trade.  In theory, because China’s courts lack judicial independence, they simply cannot be fair.  So if statistics say China’s courts are at least somewhat fair, a professor must be astonished.  And if astonishment is not convincing enough, then the statistics themselves must be wrong.

Businesses have to deal in reality and the reality is that China’s courts are fairer than is widely believed in the West. China’s courts are certainly fair often enough so those who conduct business in China must do so in a way so that if they end up in court, they can prevail.

Well not always, but more often than credited.

In a recent post on the Citizen Yang Blog, entitled “Local Governments Lose 30-50% of Administrative Lawsuits,Vermont Law School Professor Tseming Yang notes that “local governments lose an astonishing 30-50% of law suits in China.”  Most of these cases “involve land seizures, housing relocations, social security and state-owned-enterprise reform (in essence, folks getting laid off from their state company jobs).”  Professor Yang is “astonished” by this success rate, particularly when factoring in that many of these cases were outside Beijing and Shanghai:

The assertion that local governments oftentimes act contrary to the law and are sued as a result seems pretty unremarkable. However, I am astonished that the plaintiffs appear to win so often. From all the things I have heard, the plaintiffs most of the time come out on the losing end. My sense was that judges would not ordinarily rule against local government officials in such matters. Even if judges in large metropolitan areas like Beijing and Shanghai may be more professional, and so such a high loss rate seems likely in such regions, that is less the case in the rural areas and away from the coast.

I am not astonished by these numbers.  In a previous post, entitled, China Rises — The TV Show/”Food is Heaven,” I noted the success rate small players had in their lawsuits in Chinese courts against big polluting companies and I ascribed it to fair courts:

This episode did a story on fish farms wiped out by pollution emanating from an up river leather factory.  The story focused on a Beijing lawyer trying to determine whether he had enough evidence to sue the leather factory for damages on behalf of the fish farmers. This Beijing lawyer has won about half of his 70 environmental cases against Chinese companies.  The lawyer talked about how the leather factory was violating the law but corrupt local authorities were ignoring the violations.  This lawyer’s success rate bolsters my view and that the Chinese courts generally rule fairly in business disputes.  The Beijing central government controls China’s courts and Beijing generally wants corrupt local party hacks reigned in.

Every time I tout the fairness of China’s courts, however, I still feel called upon to make clear I am not a naif.  I fully realize that Chinese courts virtually never rule against the government when central government policy is at issue.  And, when I am talking about fairness, I am completely ignoring criminal and political cases.  I also recognize that even though China’s courts are controlled from Beijing, the chances of getting a fair trial are much greater in prosperous commercial cities like Shanghai, Tianjin, or Qingdao, than they are in a small city in Anhui Province.  I know too that a foreign company prevailing against a powerful local company in a Chinese court is always going to be less likely than if all parties are of the same strata.

So China’s courts are not always fair.

But, they are fair way more often than credited by the western media and I am absolutely convinced (as are all of the Chinese lawyers with whom we work) that they are fair often enough to make it as ill-advised to do business in China without written contracts or Intellectual Property (IP) protections as to do business that way in the West.

Even if China’s courts are fair only 60% of the time, this is enough to cause the rational Chinese businessperson to make decisions based on legal ramifications.

There is a commonality to judicial corruption worldwide.  Corrupting a judge is expensive.  The greater the amount at issue in the case, the more the judge will charge for a favorable decision.  The more publicly visible the case, the more the judge will charge.  The more the judge has to trample the law to reach the decision for which he or she is being paid, the bigger the bribe will need to be.  Local, trial court judges (who are most likely to know the lawyers and/or the parties) are more likely to be corrupt than appellate court judges.  Supreme Court Judges are the least likely to be corrupt.

All of this means that even in the most corrupt legal systems, the better your contract, the more it will cost your opponent to prevail and the better your chances will be as you climb each step of the court system and the more it will cost to change that.  When I tell clients this, their reaction is usually, something like, “great, all this means is that my opponent will need to pay the judges half a million dollars to beat me, rather than only $10,000. That still doesn’t help me.”

Oh yes it does.

If the other side is going to need to spend $500,000 to beat you, they should be willing to settle with you for even more than that.  They should be willing to pay you more than a judge because settling with you has a greater certainty of finality and outcome and because it has a much greater certainty of their not getting arrested for bribery.  If you have no contract or a lousy contract, the other side may be unwilling to pay you anything, figuring a small judicial bonus is all it will take to assure legal victory or that you will choose not to sue at all.

Chinese courts generally fairly resolve commercial disputes and they are continuing to improve.  China’s courts already are sufficiently fair that Chinese businesses for the most part do consider the legal ramifications of their actions and act accordingly.

Bottom Line:  There is no justification for failing to take legal precautions there (such as written contracts and IP protection) when doing business in or with China that you do when doing business in the West.  Those who justify their failure to do things by the legal book in China because “the courts don’t enforce the law there anyway” are both empirically wrong and foolish.

I just watched two more episodes of the highly publicized new four part TV series, “China Rises.”  I the episode, “Food is Heaven,” which focused on the centrality of both the quality of food in Chinese culture and on the difficulty so many in China still have in just getting enough to eat. I also watched “Party Games,” which focused on Beijing getting ready for the 2008 Olympics.  Both episodes were excellent.

The following two things from the “Food is Heaven” episode stood out for me:

1.   I often wondered how China could have so many great restaurants despite the Cultural Revolution.  How could there be so many great chefs and incredible restaurants in China when the Cultural Revolution (and even the entire period under Mao) looked so askance at anything as bourgeois as great food?  This episode answered this question for me.  Food is so much a part of Chinese culture that I now realize it was silly of me to have thought any government could have annihilated something so important and ingrained.

2.  This episode did a story on fish farms wiped out by pollution from a leather factory.  The story focused on a Beijing lawyer trying to determine whether he had enough evidence to sue the leather factory for damages on behalf of the fish farmers. This Beijing lawyer has won about half of his 70 environmental cases against Chinese companies.  The lawyer talked about how the leather factory was violating the law and of how corrupt local authorities were ignoring the violations.  This lawyer’s success rate bolsters my view and that the Chinese courts generally rule fairly in business disputes.  The Beijing central government controls China’s courts and Beijing generally wants corrupt local party hacks reigned in.

The lawyer used the same methods and case analysis one would expect a United States lawyer to use.  The lawyer was testing the water, interviewing witnesses, and making a video showing the factory’s discharge.  The lawyer talked again and again about the need for evidence.  One should conclude from this that Chinese courts, like those in the west, focus on the evidence in deciding how to rule in business cases.

The “Party Games” episode makes clear, however, that the Chinese courts work far less well (or not at all) in dealing with an overzealous government.  Chinese law and courts are of virtually no use when challenging the Beijing government and its policies.  This episode focused on a lawyer and his wife and her friend who had sued over the razing of a Shanghai apartment for development.  The plaintiffs lost their case (which by all rights they should have won) and the lawyer was imprisoned for three years and his wife and her friend were constantly followed and harassed for having brought it.

This series’ portrayal of China’s legal system jibes with my firm’s own experiences with business issues in Chinese courts.  The Chinese courts (in China’s business cities) are generally fairly thorough and fair in dealing with business disputes, even if those disputes involve a “connected” local factory and even if those disputes involve a foreign party.  Chinese judges are well paid and closely monitored from Beijing in an effort to avoid corruption.  Beijing uses the courts to extend its own powers and Chinese judges generally look to Beijing in determining how to rule. Beijing wants business in China to function smoothly and business functions smoothly when courts rule fairly in business disputes.

China’s courts, are however, of little use in cases involving the legality of Beijing government actions or policies.  The courts support the center or, at best, will not cross it.  The Communist Party takes priority over China’s constitution and the courts accede to this.  A few months ago, I asked a couple of top Qingdao lawyers what would happen if a Qingdao judge were to issue a ruling that went against a higher court decision out of Beijing. The lawyers told me they were unaware of that ever having happened and they could not even imagine it.  They found my question funny.

Bottom Line:  China’s courts are way better than you would think at handling routine business disputes, but you should not expect to use them against the government or its policies.