Chinese Legal Reform: The Case of Foreign Investment Law

Chinese Legal Reform: The Case of Foreign Investment Law

Chinese Legal Reform: The Case of Foreign Investment Law

Chinese Legal Reform: The Case of Foreign Investment Law

Synopsis

Featuring an extensive case study of foreign investment law, this work discusses China's achievements in building a new legal system and identifies the theoretical and institutional limitations of China's legal reform.

Excerpt

This is a study in legal development. It attempts to make an assessment of China's legal reform over the past two decades. By choosing foreign investment law as a case study, it examines how progress towards the rule of law is impeded. The book begins with a discussion of some main features of China's new legal system. With this as a background, it examines four important areas of foreign investment law. By taking into consideration a wide-ranging set of the interconnecting variables in China's changing social context, the book analyzes the gap between the laws in the text and their actual practice. The analysis is made in the context of the experiences of various foreign-invested enterprises that have encountered different problems in practice. It shows that, although China has created more market-oriented laws for foreign investors, they are often not effectively implemented and fail to provide the kind of protection and predictability associated with conventional rule of law. Different cultural and social forces often render law a secondary authority. The book points out that, if an enforceable legal system is to develop, China has to overcome its ambivalent attitude towards reform. While many Western legal concepts have been introduced, certain underlying fundamentals have been rejected to accommodate the existing ideologies and institutions. As a result, the law in China still lacks autonomy. True economic development requires long-term, multi-party investment transactions. Such transactions are going to suffer most if the legal system fails to function. This is shown by the different problems encountered by foreign investors and the subsequent impact on the patterns of foreign business activities. If China wants to attract foreign investment aiming for long-term development, a stable and functioning legal infrastructure is necessary. The absence of a tradition of respect for law among the populace and lack of a culture of legal professionalism will make the task of the reformers more challenging over the next decade. However, to promote new values in building a legal culture, policy will have to become unequivocal about the goal of the legal reform.

I learned very much by being Ms Wang's supervisor during her work on this doctoral dissertation. I gained a general deeper understanding of law, since the comparison of the underlying structures of Western and Chinese societies clearly illustrates how the implementation of law is very dependent on the people's notion of the function of law. Although the book addresses fundamental theoretical issues

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