10.6092/issn.2531-6133/6308
application/pdf
2531-6133
6308
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en
Xianchu Zhang
University of Bologna Law Review
Commercial Law
The New Round of Civil Law Codification in China
Text.Serial.Journal
https://bolognalawreview.unibo.it/
1
Articles & Essays
2016-08-31
2016-08-31
2016-07-19
2018-12-14
106-137
UBLR
Xianchu Zhang
2016/08/31
10.6092/issn.2531-6133/6308
106
University of Hong Kong
2531-6133
1
Commercial Law
en
137
The New Round of Civil Law Codification in China
https://bolognalawreview.unibo.it/article/download/6308/6082
1
ARTICLES & ESSAYS                                                                    DOI 10.6092/issn.2531-6133/6308




                The New Round of Civil Law Codification in China


                                             XIANCHU ZHANG†




TABLE OF CONTENTS: 1. An Introduction; 2. Path of Civil Law Codification in China; 3.
Political Difficulties; 4. Doctrinal Debates Over Civil Law Codification; 5. Further
Implications of the Civil Law Codification; 6. Conclusion.



ABSTRACT: Despite a long unsuccessful history, civil law codification has entered into a
new stage in China in 2014 when the Central Committee of the Communist Party
(CCP) made its call for this compilation in its Decisions on Major Issues Concerning
Comprehensively Moving Governing the Country According to the Law Forward (2014
Decisions) for the first time since the establishment of the People’s Republic of China
(PRC).1 Although the political promotion may be welcomed as an encouraging sign of
the Party-State’s commitment to the rule of law development in China’s social and
market transition, the codification is still facing a wide range of challenges, ranging
from political ideology to technical controversies. This article critically examines the
background of the new round of codification, the progress made thus far and some
major issues that have been heatedly debated. It is argued that in terms of the path
for civil and private law development China may take no exception to other developed
market economies with profound political and institutional reform.


KEYWORDS: China; Civil Code; Institutional Reform; German Code; Commercial Law.




†
 Professor of Law at the University of Hong Kong, Faculty of Law. He served as an associate
dean of the Faculty of Law from 2002-2014. Currently he is a director of the Hong Kong Legal
Education Fund, a council member of Chinese Judicial Studies Association of the Supreme
People’s Court, a member of the Expert Committee of Foreign Related Trials Studies of China
Law Society, and an arbitrator of CIETAC, Shanghai and Shenzhen Arbitration Commissions.
1
  The CCP Decision was adopted on 30 Oct. 2014 by the Fourth Plenary Session of the 18 th
Communist Party of China Central Committee. An English translation is available at
https://chinacopyrightandmedia.wordpress.com/2014/10/29/explanation-concerning-the-ccp-
central-committee-decision-concerning-some-major-questions-in-comprehensively-moving-
governing-the-country-according-to-the-law-forward/.


                                           UNIVERSITY OF BOLOGNA LAW REVIEW

                                                   ISSN 2531-6133

                                                    [VOL.1:1 2016]

          This article is released under the terms of Creative Commons Attribution 4.0 International License


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    1. AN INTRODUCTION

A historical economic reform with an open-door policy began in China in the
late 1970s and has changed the country significantly. China has become the
second largest economy in the world and is expected to surpass the United
States within a short period. With per capita GDP of $8018 reached in 2015,
China is entering into a middle class society. The rise of China has become a
phenomenon in the new century and has had a profound implication on the
entire world. 2

         Although today China is still a socialist country economic reform and
opening policy have dramatically weakened and reduced the Party-State
control, particularly in respect of growth and the quality of economic life.
Since the Constitutional Amendment in 1993 where the traditional planned
economy was officially replaced with the so-called “socialist market
economy,”3 a legal status of private economy as its important part has
eventually been recognized.4                China’s accession to the World Trade
Organization (hereinafter WTO) in 2001 further improved the market access
and competition conditions. In terms of business ownership structure,
according to a recent statistical survey, by the end of 2013 private enterprises
and commercial households reached 12.53 million and 44.36 million
respectively making their contribution to more than 60% of the national
GDP.5 On the contrary, the number of the state-owned enterprises
(hereinafter SOEs) has dropped to approximately 155,000, although they are
still very powerful in terms of scale and in holding their monopolistic
positions in all the key business sectors of the country.6

         Meanwhile, more and more private and civil rights have been
recognized in legislation and judicial practice in rapid social and economic


2
   The World Bank [WBG], China 2030: building a modern, harmonious and creative society,
(Washington,DC:WorldBank,2013);http://www.worldbank.org/content/dam/Worldbank/documen
t/China-2030-complete.pdf; and Andrew Soergel, “America's Days Are Numbered as the World's
Top Economy”, US News and World Report, (Dec. 28, 2015).
3
  The Constitutional Amendments of 1993, Art. 7.
4
  The Constitutional Amendments of 1999, Art. 16.
5
  Private Sector’s Contribution to More Than 60% of the National GDP in 2013, XINHUA SHE (Feb. 28,
2014).
6
  Disclosure of State Owned Enterprises: Less Than 1% in Number with More Than 30% of Total National
Assets, ZHONGGUO CHABJING XINWEN BAO [INDUSTRIAL AND ECONOMIC JOURNAL OF CHINA], July 31, 2014.




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developments. At the legislative level, the Chinese Government declared in
2011 that after the reform for more than 30 years a new legal system with
Chinese characteristics had been established with civil and commercial law
as one of its major components where more than 33 national laws and
numerous government regulations had been adopted in this regard. 7

         With respect to the judicial practice beyond the traditional civil law,
many new types of litigation have reached the People’s Court even prior to
the relevant laws being enacted or updated, such as disputes related to e-
commerce, corporate social responsibility, shareholders’ derivative actions,
use of computer software, telecommunication services, right to education,
damages        to     mental       health      and      personality        rights,       employment
discrimination, antimonopoly and consumer protection, land requisition, and
production rights. In order to the streamline handling of civil cases, the
Supreme People’s Court (hereinafter SPC) promulgated its first Provisions on
Causes of Civil Actions (on trial basis) in 2000 with 300 types of civil cases
stipulated in four categories. The Provisions were further revised and
dramatically expanded in 2008. The current version promulgated in 2011
includes 424 causes of civil action classified into ten categories, which are
further divided into forty-three sub-categories. Contract related disputes
alone (which include intellectual property contracts) count for seventy-five
different types of claims.8

         Moreover,        the    SPC     has     issued      a   large     number          of     judicial
interpretations and policies in order to remedy the situations where the laws
were either lacking, or not clear and detailed enough. 9 Since 2011 the SPC has
further developed its guiding case system, where cases with guiding value
are selected by the SPC and promulgated for the lower courts to follow in



7
  Info. Office of the State Council of the China, The Socialist Legal System with Chinese Characteristics
(Oct. 27, 2011), http://www.china.org.cn/government/whitepaper/node_7137666.htm.
8
  Ten major categories of the Provisions on Causes of Civil Actions of 2011 include cases related
to personality rights, marriage and family rights, property rights, contract rights, intellectual
property rights, labor rights, maritime disputes, enterprises disputes, tort claims, and civil
capacity and litigation rights. See, for an English translation and comments, YILIANG DONG,
HONGYAN LIU, KNUT B. PIßLER, THE 2011 REGULATION ON THE CAUSES OF CIVIL ACTION OF THE SUPREME
PEOPLE'S COURT OF THE PEOPLE'S REPUBLIC OF CHINA (2011).
9
   See Law on Legislation (promulgated by the Standing Comm. Nat'l People's Cong., Mar. 15,
2015, effective Mar. 15, 2015) (amending Law on Legislation (2000)), ch. 6, art. 104, 2015
STANDING COMM. NAT’L PEOPLE’S CONG. GAZ. (China).




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their adjudications. By the end of 2015, fifty-six guiding cases have been
adopted with more than half being civil or commercial decisions. 10

         To a large extent, such developments are much needed in order to
respond to the rapid social and economic changes taking place in China and
the increasingly intensified conflicts in this transition. As the largest
developing and socialist country in the world, China’s social and economic
transition to a rule of law society and a market economy is susceptible to
large scale and tempestuous clashes between different interest groups, social
classes and old and new institutions. Such conflicts have not only made
China become “one of the most litigious” societies in the world, 11 but
produced a large number of “mass incidents” referring to planned or
impromptu gatherings in forms of public speeches, demonstrations, public
airings of grievances, or even violent attacks on government organs,
factories or other property as means to protest against the abuse of power,
corruption, an underdeveloped social welfare system, and a lack of applicable
legal remedies that are seen as disrupting social stability and direct
challenges to the current Party-State regime.12 According to some academic
surveys, the number of reported “mass incidents” rose from 8,700 in 1993 to
more than 90,000 in 2006, and further up to 180,000 in 2010. 13

         From this reflection it has become evident that the existing laws and
their enforcement cannot really keep up with the country’s social and
economic development and effectively prevent and settle the rapidly
increasing number of civil disputes and social conflicts. Against this
background, codification of civil law has become a hot topic in China again

10
   For a detailed analysis of the guiding case practice see MEL GECHLIK, China Guiding Cases
Project, Issue No. 4, CGC.LAW.STANFORD.EDU (May 1, 2015), https://cgc.law.stanford.edu/guiding-
cases-analytics/issue-4/.
11
   Tom Phillips, China Will Be 'One of the Most Litigious' Countries in the World, INTELL. PROP. MAG.,
Dec. 6, 2013. According to the latest working report of the Supreme People’s Court, the judiciary
of China at all the levels received more than 15.51 million lawsuits in 2015, or more than 20%
increase from the previous year, with over 75 % being civil and commercial cases. Report,
Takeaways from the Supreme People’s Court 2015 Work Report, Supreme People’s Court Monitor
(Mar. 15, 2016), https://supremepeoplescourtmonitor.com/2016/03/15/takeaways-from-the-
supreme-peoples-court-2015-work-report/.
12
   Tao Ran, China’s Land Grab Is Undermining Grassroots Democracy, THE GUARDIAN (London, Dec. 16,
2011)https://www.theguardian.com/commentisfree/2011/dec/16/china-land-grab-undermining-
democracy; and Austin Strange, Mass Incidents in Central China: Causes, Historical Factors, and
Implications to the PAP, 17 THE MONITOR 32 (2012).
13
   Barbara Demick, Protests in China over Local Grievances Surge, and Get a Hearing, L.A. TIMES (Oct.
8, 2011) http://articles.latimes.com/2011/oct/08/world/la-fg-china-protests-20111009.




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since 2014 due to the direct promotion of the CCP made for the first time in
the history of the PRC.             Although the political decision has provided the
codification with new momentum, the enactment in China as a socialist
market economy is still facing some major political challenges and doctrinal
uncertainties.




     2. PATH OF CIVIL LAW CODIFICATION IN CHINA

In terms of legal tradition China has long belonged to the civil law family
with embodiment of legal principles and rules into codes as the most reliable
sources of law. Historically, the practice to codify legal rules through a public
way can be traceable to Spring and Autumn and the Warring States Periods
(BC 770–221) and codification in Tang Dynasty was considered “the
foundation on which the Chinese legal system was built from the 7th till the
beginning of the twentieth century.”14 However, it should be noted that in
the long feudal history almost all the laws were of public nature resulting in
punishment if commercial activities were obstructed. As a result, “[t]he
concept of ‘civil’ or ‘private’ law did not exist.” 15

         In the reformation period of Qing Dynasty some basic laws were
introduced from the West and eventually became the first attempt of modern
legislation in China, which included both Draft Civil Law and Commercial
Law modeled after the codes of Germany and Japan. After the 1911 Revolution
the Nationalist Government promulgated the first Civil Code in China’s
history in 1930, which also followed the style of the German Civil Code
(Bürgerliches Gesetzbuch, BGB) due to the influence from Japan. However, a
controversy emerged in the legislative process on the system design of civil
and commercial law codification. Finally, a decision was made by the Central
Political Committee of Kuomintang (Chinese Nationalist Party) to combine
general rules of civil and commercial laws into a unified code with


14
   Ping-Sheung Foo, Introduction to THE CIVIL CODE OF THE REPUBLIC OF CHINA, at iv (Ching-Lin Hsia,
James L. E. Chow, Yukon Chang trans., 1930).
15
   Edward Epstein, Codification of Civil Law in the People’s Republic of China: Form and Substance in the
Reception of Concepts and Elements of Western Private Law, 32 U.B.C. L. REV. 153, 162 (1998); and Max
Weber, Economy of Law or Sociology of Law, in 2 ECONOMY AND SOCIOLOGY: AN OUTLINE OF INTERPRETIVE
SOCIOLOGY (Claus Wittich ed., 1978).




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subordinate supplementary laws, such as Company Law, Commercial Paper
Law, Insurance Law, and Bankruptcy Law, to deal with specific fields. 16

         The establishment of a socialist government in 1949 led to not only
complete abolition of the legal system of the Nationalist Government, but
also to a domination of the Soviet style planned economy for more than three
decades. Since then although it has been a long desire of the top leaders and
scholars to eventually develop a comprehensive civil code on a grand scale in
China, four rounds of civil law codification have failed so far. The attempts to
develop a civil code with some preliminary drafts in the 1950s (1954-1956)
and 1960s (1962-1964) were short lived because of the political conditions at
the time. The planned economy and class struggle apparently did not allow
any chance for a civil code to come to frutition.17 Although the efforts
produced some progress, including two drafts of Civil Law being completed
in 1956 and 1964 modeled after the former Soviet Union Civil Code of 1922,
legislative process was disrupted due to the hostile political movements and
ideology against private rights and autonomy. Despite the political hostility,
from an academic perspective Roman law and Pandektenrecht continued to be
modeled in certain legal studies and legislation. 18

         The third round of codification was not initiated until the late 1970s
after economic reform and open door policy were implemented. Although
two drafts with more than 460 articles were worked out, the political
uncertainties in the early years of reform and insufficient experience and
theoretic preparation rendered the further progress impossible. As a result,
the drafting group was dissolved by the Standing Committee of the National
People’s Congress (hereinafter NPC) as the top national legislature in 1981.
Instead, the General Principles of Civil Law (hereinafter GPCL) was
eventually promulgated in 1986 as an interim solution to meet the urgent
needs of social and market development of the time. One the one hand, the
GPCL laid down an important foundation for private law development in
China with its explicit stipulation for the first time in the PRC history that
16
    Tsung-Fu Chen, Transplant of Civil Code in Japan, Taiwan, and China: With the Focus of Legal
Evolution, 6 NAT'L TAIWAN UNIV. L. REV. 389, 398-401 (2011).
17
   Liming Wang, The Systematization of the Chinese Civil Code, in TOWARDS A CHINESE CIVIL CODE:
COMPARATIVE AND HISTORICAL PERSPECTIVES 21, 24 (Lei Chen, Cornelis Hendrik Van Rhee eds., 2012).
18
   Id. For some detailed discussion on the drafts made in this period see Epstein, supra note 15, at
153-198.




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the law shall govern property relations among the subjects with equal legal
status.19 It has not only provided the economic reform and market
development with urgently needed rules and guidelines, but also laid a
foundation to develop a civil and commercial law system in China. As
Professor Wang Liming of the People’s University pointed out, promulgation
of the GPCL marked a new stage of developing and systematizing civil and
commercial legislation in China.20

        On the other hand, it was an immature product where the drafting
process was guided by the principle of “general rather than detailed” to deal
with urgent practical demands without sufficient experience and doctrinal
preparation immediately after the ten year disastrous “Cultural Revolution”.
As Peng Zhen, then Vice Chairman of the NPC, stated, “It is impossible to
adopt a civil law within a short period. This is not because we are not
working hard enough, but the issues concerned are so complicated and many
problems have not been settled in the economic reform.” 21

        As a result, the current civil and commercial system has been
developed on the basis of the GPCL of 1986, which includes nine chapters and
156 articles covering the general principles, citizens (natural persons), legal
persons, civil juristic acts and agency, civil rights, civil liability, statutory
limitation, application of law in foreign related civil relations, and
miscellaneous provisions. Two main features reflected in the structure and
contents of the GPCL are that (1) it follows the German Pandekten or Roman
Digest System, where general principles are set out first followed by separate
provisions applicable to specific legal areas; and (2) it combines civil and
commercial rules in a single legislation. In addition to general rules to deal
with civil law matters, the GPCL stipulates provisions governing individual
commercial households, enterprise legal persons, business joint operation,
contract, intellectual property rights, civil liabilities including damages




19
   General Principles of the Civil Law of the People’s Republic of China (promulgated by the
Standing Comm. Nat'l People's Cong., Apr. 12, 1986, effective Jan. 1, 1987), ch. 1, art.2 (1986).
20
   Wang, supra note 17.
21
   Quoted from Liang Hui Xing, Professor of Inst. of Law of Chinese Acad. of Soc. Sci., Revisited
Certain Issues in Civil Law Codification with Response to De-codification (Mar. 24, 2015),
http://www.aisixiang.com/data/90909.html.




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arising from tortious conducts, product liability and breach of contract, and
foreign related disputes.22

         Although from today’s view the GPCL may not be considered
consummate, as the first comprehensive private law enactment in the PRC
its significance should not be underestimated. Thus far major civil/private
laws adopted on the basis of the GPCL include Marriage Law (as amended in
2001), Tort Liability Law (2009), Contract Law (1999), Law on Right in rem
(2007), Company Law (as amended in 2013), Partnership Enterprises Law (as
amended in 2006), Sole-proprietor Enterprises Law (1999), Commercial
Bank Law (as amended in 2015), Commercial Bank Supervision Law (2006);
Security Law (1995), Securities Law (as amended in 2014), Securities
Investment Fund Law (as amended in 2012), Trust Law (2001), Maritime Law
(1992), Commercial Paper Law (as amended in 2004), Insurance Law (as
amended in 2015), Patent Law (as amended in 2008), Trade Mark Law (as
amended in 2013), Copyright Law (as amended in 2010), Enterprises
Bankruptcy Law (2006), Sino-Foreign Equity Joint Venture Law (as amended
in 2000), Sino-Foreign Cooperative Joint Venture Law (as amended in 2001),
Wholly Foreign Owned Enterprises Laws (as amended in 2001), and
Governing Law Applicable to Foreign Related Civil Relations (2010). Many
laws have borrowed rules from international treaties and experiences of
developed economies. Some of them have been amended two or three times
since their first adoption in order to deal with the new developments and
catch up with worldwide competition.23 As such a legislative pattern to
include civil and commercial laws in one category on the basis of the GPCL,
have been followed in the past thirty years.

         The fourth round of codification was resumed in late 1998 after the
historical Constitutional Amendments where the planned economy was
officially given up and replaced with the “socialist market economy” in
1993.24 According to the working plan, a civil code would be developed by
three steps: first, adopt a uniform contract law by 1999; second, adopt a

22
    An English translation of the GPCL is available at the NPC’s website, at
http://www.npc.gov.cn/englishnpc/Law/2007-12/12/content_1383941.htm.
23
   Shiyuan Han, Civil Law Codification in China: Its Characteristics, Social Function and Future, in
CODIFICATION IN EAST ASIA 201, 210-211 (Wen-Yeu Wang ed., 2014).
24
   Art. 7 of the Constitutional Amendments of 1993.




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uniform property law; and finally, complete enactment of the Civil Code by
2010. China’s accession to the WTO in 2001 provided the legislative process
with new momentum and pressure as the top leaders of the NPC asked the
drafting group to accelerate its work and to complete its first draft Civil Code
in 2002. Although the first draft indeed managed to be submitted to the
national legislature for review on 17 December 2002 (2002 Draft Code), 25 the
acceleration      was     apparently       hindered      with     difficulties        and        poor
draftsmanship.

        The 2002 Draft Code included more than 1200 articles in nine parts,
including the General Principles, Property Law, Contract Law, Rights of
Personality, Marriage, Adoption, Succession, Tort Liabilities, and Governing
Law Applicable to Foreign Related Civil Relations. 26 As some scholars
observed, under the time pressure the 2002 Draft Code was not a fine work at
all, but just a rough product to piece together existing legislations without
decent digestion. Since the legislators could not find a good basis to carry out
their deliberation to build up any legislative consensus, the first reading of
the Draft Civil Code triggered extensive controversies, even among the key
members of the drafting group.27 Such premature promotion has left negative
impacts on the legislative process. Since 2002 the drafting of the civil code
fell to a standstill until a new call was made by the CCP recently.

        Unlike the previous rounds where the enactment efforts were initiated
by the legislature subject to the CCP’s political approval, the current
codification is directly launched by the CCP itself. The new leadership, after
being appointed in late 2012, unleashed a campaign to deepen institutional
reforms in order to deal with the country’s economic upgrading and
challenges in its transition toward a moderately prosperous society. On the
12th of November 2013 the CCP adopted its Decision on Major Issues
Concerning Comprehensively Deepening Reforms with a pledge to “let the



25
   China’s First Draft Civil Code Submitted for Review, PEOPLE’S DAILY (Beijing, Dec. 24, 2002)
http://en.people.cn/200212/23/eng20021223_108978.shtml.
26
   An English translation of the draft code is available at THE LEGISLATIVE RESEARCH GROUP OF THE
CHINESE ACADEMY OF SOCIAL SCIENCES, THE DRAFT CIVIL CODE OF THE PEOPLE’S REPUBLIC OF CHINA
(Huixing Liang ed., 2010).
27
   Qingyu Zhu, The Code Rationale and General Principles of Civil Law: Thoughts on Civil Law
Codification in Mainland China, 22 PEKING U. LAW J. 485 (2010).




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market play a decisive role”.28 Soon after the CCP promulgated the 2014
Decisions where civil law codification was explicitly called as part of efforts
to better protect citizens’ rights and safeguard market development. 29

         The Standing Committee of the NPC quickly made its response to the
CCP assignment by including the civil law codification into its amended five
year legislative plan for 2013-18.30 Under the plan, the codification will be
divided into two stages with the first one to formulate the general principles
of the civil code, followed by comprehensive integration of all the
civil/commercial legislations into the code.

         According to a report published by the Hong Kong Commercial Daily a
Draft of General Principles with 186 articles as the first book of the Civil Code
(hereinafter Draft Principles) has been completed31 and submitted to the
Standing Committee of the NPC for its first deliberation on 27 June 2016,
followed by a public consultation period of one month. The target was set
with the intention of adopting the General Principles in March 2017 and
completing the entire compilation by March 2020.32




     3. POLITICAL DIFFICULTIES

The renewed efforts for civil law codification should certainly be welcome as
a positive sign of further modernization of the national legal system.
However, given China’s present political foundation, the legislation may
have to first deal with some political obstacles.

         In China the Constitution as the supreme law of the country does not
stipulate a basis for the equal right entitlement because public ownership
and the state economy have been provided with the constitutional guarantee



28
        An       English        translation    of     the      Decision     is     available     at
http://www.china.org.cn/china/third_plenary_session/2014-01/16/content_31212602.htm.
29
   CCP Decision (2014), supra note 1, part 2(4).
30
   China Includes Civil Law Codification in Legislation Plan, GLOBAL TIMES (Beijing, Aug. 5, 2015)
http//www.globaltimes.cn/content/935674.shtml.
31
     China      Drafting     Civil  Code:   Spokeswoman,     XINHUA     SHE    (Mar.   4,    2016),
http://news.xinhuanet.com/english/2016-03/04/c_135155512.htm. The Proposed Draft is
available at http://www.civillaw.com.cn/zt/t/?30198 (in Chinese).
32
   The Civil Code Is Taking Shape by 2020, HONG KONG COM. DAILY, June 28, 2016.




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for their sacred and inviolable status as the leading positions, 33 whereas the
private sector may only be an important component of the socialist market
economy subject to government administration and supervision.34 Although
the Constitution finally recognized private property inviolable in 2004 under
strong demands, it has still refused to grant it the same legal status of
sacredness.35 As a result, codification of civil law may not advance equal right
protection further unless some breakthroughs can be made at the
Constitutional level.

        Such a political environment has directly affected private law
development. In 2005 the national legislature was stunned in its intended
final round deliberation of the Law on Rights in rem by more than 11,000
submissions       nationwide      and     in   particular,    an    open      letter       from        a
constitutional law professor of Peking University with supports from 700
officials and scholars to question the constitutionality of the enactment in
violation of the fundamental principles of socialism. The political debate
rendered a long delay of the legislation until it was finally passed in March
2007 with an explicit provision for safeguarding the country’s fundamental
economic system.36 In a more recent incident, the State-Owned Assets
Supervision and Administration Commission (hereinafter SASAC) as a state
department and the mega-shareholder in charge of SOEs’ operation strongly
opposed the further SOE reform proposals urged by the World Bank in its
study report by accusing them of being in violation of the Constitutional
principles on public ownership guarantee with an attempt to overturn the
socialist system in China.37 In the new round of SOE reform initiated by the
CCP in 2013, the major theme has been changed from breaking the SOE




33
   See Art. 6,7 and 12 of the Constitution of PRC.
34
   Id. art. 11.
35
   See Art. 22 of the Constitutional Amendments of 2004.
36
   See Law on Rights In Rem (promulgated by the Nat'l People's Cong., Mar. 16, 2007, effective
Oct. 1, 2007), pt. I, ch. 1, art. 1, 2007 STANDING COMM. NAT’L PEOPLE’S CONG. GAZ. (China). For a
more detailed discussion see JIANFU CHEN, CHINESE LAW: CONTEXT AND TRANSFORMATION 375-377
(2008).
37
   The World Bank [WBG], supra note 2. For a comment on the SASAC’s behavior and approach
see Barry Naughton, Leadership Transition and the ‘Top-Level Design’ of Economic Reform,
China              Leadership           Monitor,          (N.           2012-37,           2012),
http://www.hoover.org/sites/default/files/uploads/documents/CLM37BN.pdf.




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monopoly and improving the level playing field to making SOEs “larger and
stronger”.38

        Such legal inequality has been widely reflected in practice. For
instance, in recent years as many as 570,000 violent demolition cases were
reported to the state authorities with many casualties in government-led real
property development nationwide, even after the State Council tried to stop
the violations with its regulation on land taking in 2011 mandating fair
compensation and judicial intervention.39

        Against this backdrop, some scholars have raised the question
whether the Civil Code should be established on the basis of the current
Constitution. In a normal logic such legal hierarchy may not be ever doubted;
but in China the linkage and reliance would mean the extension of the
political ideology of the Constitution to the equal footing arena of civil law.
Professor Long Weiqiu of Beijing Aviation University recently argued that
according to legal history civil law was developed before the evolution of the
constitution. Despite its higher status, the Constitution, in addition to
political right stipulation, should also respect the civil law demands. This has
been evident from the development of Civil Codes in France, Germany and
Switzerland as the leading civil law jurisdictions where the Constitution is
not necessarily relied on because the political and civil rights should be
treated relatively separately.40 Some scholars disagreed. For instance,
Professor Wang Yi of the People’s University held that the Constitution
should be the legal basis of the Civil Code, although it may not be the direct
source of private law and adjudication. He further advocated reflection of the
Marxist philosophy in the civil codification. 41




38
   See WANG LAN, What the Constitution Says about the SOE Reform, ENGLISH.CAIXIN.COM (Sept. 21,
2015), http://english.caixin.com/2015-09-21/100853814.html; and EAST ASIA FORUM, SOE Reforms
in China Go the Communist Party's Way, ECONOMYWATCH.ORG (Oct. 28, 2015),
http://www.economywatch.com/features/SOE-Reforms-in-China-Go-the-Communist-Partys-
Way1028.html.
39
   Fang Chen, Libin Wang, and Junhui Ling, High Incidence of Land Disputes: Huge Profits behind
Violent Demolition, JINGHUA SHIBAO (BEIJING DAILY), Aug. 4, 2014.
40
    LONG WEI QIU, Civil Codification Should Be Alert on the Trap to Base on the Constitution,
AISIXIANG.COM (Mar. 22, 2016), http://www.aisixiang.com/data/98003.html.
41
   Wang Yi, Professor, Jinan Univ. Sch. of Law, Talk on Civil Codification (Jun. 5, 2015),
http://law.jnu.edu.cn/Show.asp?C-1-1309.html.




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Another serious debate reflecting the ideological struggle is on personality
rights. One school led by Professor Wang Liming of People’s University, a key
member of the national legislature, has enthusiastically advocated for setting
out a special book in the Civil Code to be developed for protection of such
rights, including rights to life, health, name, fame, creditability, portraiture
image, privacy, personal information and personal freedoms. The Civil Law
Study Association of China as an academic group has completed its Draft
Principles for consultation and discussion. 42 According to Wang, the special
book is needed for better protection of human rights and other fundamental
citizens’ rights, particularly in the electronic era as a reflection of the trend
of civil law development to remedy the defective structure of traditional civil
law with much more emphasis on property rights protection over personal
rights.43

         This view has been met with strong opposition. For example,
Professor Yin Tian of Peking University believes that such expansion of
personality rights may lead to a lot of legal uncertainties whereas tort law
should be able to provide sufficient legal remedies to personality right
violations. As a result, the special book is of no practical value as long as the
relevant rights are recognized in the general provisions of the Civil Code to
be adopted.44 Many more others have also raised their concerns from a
technical perspective, such as optimal structural arrangement and rational
coordination with other provisions of the civil code.45

         Thus far the fiercest criticism has come from Professor Liang Huixing
of China Social Science Academy who took the debate to a political level.
According to him, the Ukrainian civil codification in 2003 where personality
rights was set out in a special book is the only case thus far worldwide.
Besides the academic controversies, he further blamed the personality rights
codification for country’s color revolution, national division, and domestic


42
   See XINHUA SHE, supra note 31.
43
   See Wang, supra note 17, at 25-26.
44
   Tian Yin, More Criticism to a Special Section on Personality Rights in Civil Codification of Personality
Rights in Civil Codification: Scope of Civil Law Protection, BIJIAOFA YANJIU [J. OF COMP. LAW], no. 6, 2015,
at 1-7.
45
   Discussion Summary of the Conference on Civil Codification of Personality Rights at Zhongnan
University of Economics and Law (Aug. 2, 2015),
http://www.privatelaw.com.cn/Web_P/N_Show/?PID=10619.




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disorder by allowing too much civil rights. He even made a call for not
following the Ukrainian experience for more social liberalization. 46 The latest
incidents with significant impacts on the civil codification and challenges to
the current legal regime are the renewal of land use right after the original
term has expired. In China, since all the urban lands are owned by the state,
housing owners may only be entitled to the right to use the land concerned
for a certain period of time.47 However, the existing laws conflict on the
renewal of land use rights. According to the Law on Rights in rem of 2007 as
the later legislation with higher legal authority, “the right of land use shall
be automatically renewed upon the expiration of the original term.”48
However, Art. 22 of the Urban Real Estate Administration Law, which was
originally adopted in 1994 by the Standing Committee of the NPC, stipulates
that an application must be filed at least one year before the term expiration
for the government approval with payment of new fees, if the user wants to
continue to use the land; otherwise the land use right shall be returned to the
State without any compensation. In April 2016 some local governments’
demand for payments of high fees to renew the land use rights by the land
rights holders has triggered a fierce debate nationwide. Some scholars argue
that “automatic renewal” not only means renewal without any conditions
from legal interpretation, but more importantly matters with citizens’ basic
rights guaranteed by the law.49 Apparently this type of problems may not be
settled soon and may complicate the civil codification with both legal and
political implications.

         Directly related to these political controversies, scholars are further
divided on the progress of the codification. Some experts held their opinions


46
   Liang H. X., Professor, Inst. of Law of Chinese Acad. of Soc. Sci., Certain Legislative and
Theoretical Issues Concerning General Principles of Civil Law (Oct. 15, 2015),
http://m.aisixiang.com/data/93139.html.
47
   See Art. 10 of the Constitution of the PRC. See also Urban Real Estate Administration Law
(promulgated by the Standing Comm. Nat'l People's Cong., Sep. 23, 2012, effective Sep. 23, 2012)
(amending Urban Real Estate Administration Law (1994)), ch. 2.1, art. 8, 2012 STANDING COMM.
NAT’L PEOPLE’S CONG. GAZ. (China).
48
   See Law on Rights in rem (promulgated by the Nat'l People's Cong., Mar. 16, 2007, effective
Oct. 1, 2007), pt. III, ch. 12, art. 149, 2007 STANDING COMM. NAT’L PEOPLE’S CONG. GAZ. (China). The
Law has higher legal authority because it is one of the basic laws of the country adopted the full
session of the NPC rather than its Standing Committee as its executive organ.
49
   Yu Ji , Yuan Bo, Any More Fees to Pay by Residents upon the Term Expiration?, RENMIN WANG
[PEOPLE’S          DAILY          ONLINE],                 (Beijing,        Apr.    19,       2016),
http://politics.people.com.cn/n1/2016/0419/c1001-28288644.html.




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firmly to idolize civil code and advocated for avoiding “unnecessary debates”
in order to complete the codification within a time not too long” because civil
code represents the highest level of legislative achievement and maturity of a
legal system. To them, the CCP’s decision has provided the course with “a
strong political guarantee.”50 Other scholars took a much more cautious view
by pointing to the lessons from the previous failed attempts and the fact that
half of the 156 provisions of the current GPCL alone have been either
outdated, or replaced by other legislations. As a result, the institutional
evolution to be needed will inevitably make “the codification a very difficult
process.” To them, whether the legislative condition is ripe remains a
question.51 Some even predicted the need of at least from five to eight years
to complete the compilation.52 Long further pointed out, in a sense civil
codification is a political process; but thus far unlike the civil codifications in
rise of Germany and France with unambiguous political aspiration to build
up a civil society, the CCP has not clearly defined the political ideal of the
legislation, except just one sentence call.53




     4. DOCTRINAL DEBATES OVER CIVIL LAW CODIFICATION

Against the political complexity reflected above, the limited space of this
article would not be a suitable place to examine all the issues that have been
raised and debated in the course of civil codification in China. Instead, some
major concerns will be summarized and reflected in a sketch way.

         (1) Path of civil law codification. In general, there are four major
schools debating on the path of civil codification. Liang holds that China
should stick to the traditional style and structure of the BGB with necessary
adaptation according to the Chinese conditions. He places great emphasis on
China’s civil law development path to follow the German BGB and its logic


50
   Jingwei Liu, Discussion on Certain Issues Concerning the Civil Codification in China, ZHONGGUO
GAOXIAO SHEHUI KEXUE [SOCIAL SCIENCE OF HIGHER EDUCATION OF CHINA], no. 2, 2015, at 145-155.
51
   Wei Xiao, Is the Civil Codification Ready This Time?, BEIJING SHANGABAO [BEIJING BUSINESS TODAY],
Dec.19, 2014.
52
   The General Principles Shall Not Miss ‘The Objects of Rights’, FAZHI RIBAO [LEGAL DAILY], Mar. 22,
2016.
53
   LONG W. Q., Dean & Professor, Beihang Univ. Law Sch., Key Issues in Civil Codification in China
(Oct. 26, 2015), http://www.cnchinese.com/html/redian/201510265824.html.




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system.54 Other scholars even claimed that the German style had become a
tradition of Chinese civil law jurisprudence and thus “we have to adopt the
system of German Civil Code.”55 Professor Jiang Ping of China University of
Political Science and Law, a leading authority of civil and commercial law in
China, prefers a more liberal and pragmatic approach. According to him,
legal relations today have been rapidly developed to a level so complex that it
would be impossible to effectively regulate them by the traditional civil law.
As a result, civil law codification should not be exclusively based on the
German Code and others’ good experiences, including common law
jurisdictions, should also be accommodated as much as possible. He argues
for a breakthrough of China’s traditional path with heavy reliance on the
German model.56

         A school led by Wang seems to try to find a midway but with a higher
goal. He agreed with Professor Jiang on the breakthrough position, but has
advocated for an approach to codify civil laws principally on the basis of the
structure and experience of BGB with structural modifications to reflect
Chinese characteristics and to develop a Chinese civil law with important
impacts on the world, or even surpass the BGB and Code Napoléon. 57 In this
regard, Wang has vigorously advocated for enhancement of protection of
personality rights in China’s civil codification by proposing a new book on
personality rights in addition to the BGB structure. 58 In addition to the GBG-
centered debates Professor Xu Guodong of Xiamen University advocates for a
more French style codification with a primary stress on person and personal
relations in the code to be adopted. He even labels his legislative approach




54
   Huixing Liang, Three Thinking Paths on Civil Codification, LVSHI SHIJIE [LAWYERS’ WORLD], no. 4,
2003, at 4-5.
55
   Jing-Wei Liu, Two Basic Problems Need to Be Settled in Civil Law Codification, in MAIRU 21 SHIJI DE
LIANGAN SIFA [APPROACHING TO CROSS STRAIT PRIVATE LAW IN THE 21ST CENTURY] 125-146 (2004).
56
   Ping Jiang, Adopting An Open Civil Code, ZHENGFA LUNTAN [TRIBUNE OF POLITICAL SCIENCE AND LAW],
no. 2, 2003, at 115-116); and Ping Jiang, Civil Law: Retrospective and Prospective, BIJIAOFA YANJIU
[JOURNAL OF COMPARATIVE LAW], no. 2, 2006, at 1.
57
   Lihong Zhang, The Latest Developments in the Codification of Chinese Civil Law, 83 TULANE L. REV.,
999, 1015 (2009).
58
   Wang, supra note 17, at 25-29.




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“the new humanism” as opposed to the property centered German
tradition.59

         (2) The degree of codification. The global trend of de-codification in
recent years has been noticed and discussed among Chinese scholars. In an
extreme end, some scholars believed that by taking the de-codification trend
in Europe into consideration China would not need a comprehensive civil
code and the process should be abandoned. 60 With a more modest approach
Jiang and some other drafters held that the civil code to be adopted does not
have to be “big and complete” and a “loosely structured code” would serve
China the best.61 In April 2005 an international conference on codification
and de-codification was held in Shanghai where Professor Natalino Irti, a
leading advocator for de-codification, with an open letter cautioned Chinese
colleagues to adopt a civil code with a limited scope in line with the recent
developments of civil law legislation in the world. According to him, the
practice in China to develop detailed rules in subordinate special laws under
some general abstract principles might represent a legislative trend in the
civil law jurisdictions.62 Some Chinese scholars also argue that it is still
premature now to adopt a very comprehensive code with strict logic of the
German style and such formulation may even seriously hinder the
development of civil law in China. Thus, a moderate degree of civil law
codification would be more appropriate. 63 But some scholars apparently want
to pursue different approaches. For example, Wang argues that civil
legislative system must be code-centered, which will not only ensure the
unity of the system, but also exclude other sources. As such, civil law
codification must first surmount the development of many self-developed



59
   Guodong Xu, The Basic Structure of the Draft Civil Code, FAXUE YANJIU [CASS J. OF L.], no.1, 2000, at
37–55; see also see also GUODONG XU, MINFA DE RENWEN JINGSHEN (HUMANISM SPIRITS OF CIVIL LAW)
(2008).
60
    Xue Lu Xu & Peng Liang, On Decodification, SHIDAI FAXUE [PRESENT DAY LEGAL SCIENCE], no.4,
2005, at 71.
61
   Jiang, supra note 56.
62
    Natalino Irti, De-codification in Europe and the Future of Civil Code of China: To Our Chinese
Colleagues., in INTERNATIONAL CONFERENCE PAPER COLLECTION ON CODIFICATION AND DE-CODIFICATION,
Vol. 2, 43 (2005); see also Zhang, supra note 57, at 1017.
63
   Lihong Zhang, The Phenomenon of Civil De-codification and Formulation of Chinese Civil Law Code,
FAXUE [LEGAL SCIENCE], 2006, at 48-60; see also Xianchu Zhang, Civil De-codification and Sensible
Choice of China’s Civil Legislation: Modest Degree Codification, TANSUO YU ZHENGMING [EXPLORATION
AND CONTENTION], no. 5, 2011, at 85–89.




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“micro-systems” within the current framework and avoid chaos caused by
de-codification.64

         (3) Based on the positions and approaches taken by different schools
different structures and contents of the Civil Code have been put forward,
which has become a major source of controversy. For instance, Liang has
proposed his seven parts structure, including General Principles, Real Rights,
General Provision on Obligations, Contract, Torts, Family Law, and
Succession;65 whereas Wang has insisted on the addition of a separate part on
personality rights.66 Some other experts have also developed a code draft
with only four major component parts, including General Provisions,
Personal Relationships, Property relations, and Supplementary Provisions. 67

         Rights of Intellectual property (hereinafter IP) are another battle field,
since the 2002 Draft Code did not include IP rights, some scholars advocated
for their inclusion in order to ensure a thorough and complete legal system
of property rights for equal protection, although the legal sources, right
contents and liability basis of IP law may be quite different from the
traditional civil law.68 However, Professor Wu Handong of Zhongnan
University of Economics and Law disagreed. He questioned whether the
paradigm for such inclusion had been established in civil enactments in
major European countries. According to him, the Civil Code may just set out a
couple of general provisions, leaving IP law relatively independent from civil
law legislations for the sake of its own jurisprudence.69

         A newly emerged controversy is on objects of civil rights. Although
thus far, a consensus seems reached to include some provisions in this
regard in the codification as a necessary measure to correct the ignorance of
the Soviet ideology to the civil rights and the overconcentration of the BGB
on properties rights. However, with respect to how to define and stipulate

64
   Liming Wang, The Code Centered Approach and Systemizing Civil Legislation in China, YUNNAN
DAXUE XUEBAO [JOURNAL OF YUNNAN UNIVERSITY - LAW EDITION], no. 2, 2009, at 2–9.
65
   THE LEGISLATIVE RESEARCH GROUP OF THE CHINESE ACADEMY OF SOCIAL SCIENCES, supra note 26.
66
   Wang, supra note 17, at 25-29.
67
   Guodong Xu, The Basic Structure of the Future Chinese Civil Code, FAXUE YANJIU (CHINESE JOURNAL OF
LAW), no. 2, 2000, at 45.
68
   Qiying Wang, Thoughts on Inclusion of Intellectual Property Rights into the Civil Code, ZHISHI
CHANQUAN [INTELLECTUAL PROPERTY], no. 2, 2000, at 45.
69
   Handong Wu, Inclusion of IP Law into the Civil Code and General Provisions on Property Rights, FAZHI
YU SHEHUI FAZHAN [LAW AND SOCIAL DEVELOPMENT], 2015, at 58-67.




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these provisions, Professor Sun Xianzhong of the Social Academy of China
insists to set them in the General Principles as a special chapter, as a
deviation from the focus of the BGB General Principles merely in rem, to
cover, inter alia, environment, animal, innovation protections. 70 However,
Professor Yin is of the opinion that these rights should not be provided in the
General Principles, but just subordinate chapters concerned to avoid
confusion simply because the nature of these rights and their protection
means are varied and different. He took enterprise rights as an example to
question whether they should be provided as object of rights or subject of
rights.71

         (4) Civil codification and commercial legislation. As reflected above,
by following the European tradition since the 1920s commercial law has been
treated as a special part of civil law in China. After the formation of the PRC
in 1949 the practice of the planned economy and rigid political ideology for
three decades did not allow any room for market development as well as
commercial law making. Once the GPCL was adopted as the first batch of
comprehensive private law enactments in 1986, the model of combining civil
and commercial rule enactment came back and has since been followed.

         However, rapid development of a market economy in China has never
stopped its demands for a separate set of commercial law rules. 72 Some
scholars argue for the merits of such separation simply because commercial
acts have their own characteristics, such as status of merchants, their
business operation for profit and special concerns for formalities and safety
of transactions. Moreover, unlike civil law, commercial law is an area subject
to more public law intervention and regulation. Thus, as far as the civil and
commercial law relation is concerned, commercial law should be applied first
in practice due to its specialty.73 On this basis some experts take Uniform



70
   FAZHI RIBAO [LEGAL DAILY], supra note 52.
71
   Tian Yin, On the Structure of the General Principles of Chinese Civil Code, BIJIAOFA YANJIU [JOURNAL OF
COMPARATIVE LAW], no. 3, 2007, at 44-54.
72
   Kaixiang Liu, “On Nature, Basis and Characters of Commercial Law”, Zhongping Wang [China
Review Net], (March 2009), at http://www.china-review.com/sao.asp?id=21255; see also Xue Lu
Xu, On Integration of Commercial Law, GUOJIA JIANCHAGUAN XUEYUAN XUEBAO [J. OF NATIONAL
PROCURATORATE COLLEGE], no. 4, 2004, at 77-82; see also SHAOXIA SHI, SHANGFA SIKAO DE YINJI
[MARKING OF COMMERCIAL LAW CONSIDERATIONS] (2008).
73
   BAOSHU WANG, SHANGFA ZONGLUN [GENERAL PRINCIPLES OF COMMERCIAL LAW] 27,28 (2007).




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Commercial Code of the United States (UCC) as an example to support their
position.74

         In recent years an alternative way has been advocated by some
scholars led by Jiang and the late Professor Wang Baohu of Tsinghua
University.75 As a practical approach to deal with the dominant civil law
tradition, the new strategy no longer insists on a separate commercial code,
but a separate set of general principles within the current legal framework to
govern commercial conducts and transactions, commercial subjects and their
rights and to coordinate the existing commercial legislations. In this way, the
controversy of civil-commercial law combination or separation could be
avoided to a large extent.76

         On this basis, some versions of general principles of commercial law
have been worked out.77 The most noticeable one among them is the Draft
General Principles of Commercial Law developed by the Commercial Law
Society of China in 2004–2009 with ten chapters on general principles,
merchants, commercial conducts, commercial registration, commercial
establishment, business transfer, commercial accounts, management and
employee, agency and miscellaneous provisions. 78 However, the civil law
school has openly disagreed with this approach. Professor Yang Lixin of the
People’s University, for example, states that under a civil code it is




74
   Xinrong Guan, Exploring the New Open Path towards Enactment of General Principles of Commercial
Law, FAXUE [LEGAL SCIENCE], no. 8, 2010, at 27-28.
75
   Ping Jiang, Some Macro-considerations on Civil Codification, FAXUE [LEGAL SCIENCE], no. 2, 2002, at
41-42; see also Baoshu Wang, Commercial Law Principles: Beyond Civil-Commercial Combination and
Civil-Commercial Separation, FAXUE YANJU [CASS J. OF L.], no. 1, 2005, at 32.
76
   As a matter of fact, with Wang as the leading drafter Shenzhen as a Special Economic Zone
and a trial field of reform measures in China, promulgated its Commercial Ordinance in 1999
and further amended in 2004 with 65 articles in eight chapters. However, it was repealed in Dec.
2014 due to its limited use after the national legal framework has been established. An English
translation         of       this        Ordinance            can         be      available         at
http://www.lawinfochina.com/display.aspx?lib=law&id=1658.
77
   YAN BO MIAO, SHANGFA TONGZE LIFA YANJIU [LEGISLATIVE STUDY ON GENERAL COMMERCIAL PRINCIPLES]
249-260 (2008); see also TAO FAN ET AL., SHANGSHI ZEREN YU ZHUISU JIZHI YANJIU [ON COMMERCIAL
RESPONSIBILITY AND PROSECUTION MECHANISM] 177-188 (2008).
78
        A       report      of      the       drafting         process        is    available       at
http://www.bhtlaw.cn/Introduction/Discussion/2009-12-16/287.html (in Chinese); and XR
Guan, New Path to Decoding the Puzzle of General Commercial Principles, FAXUE [LEGAL SCIENCE], no. 8,
2010, at 23-30.




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unnecessary to adopt either a separate commercial code or general principles
of commercial law.79

         Although the Commercial law school suffered a heavy loss after
Professor Wang passed away in 2015, more scholars stood up                               to express
their support for the separation arrangement in the new round of civil law
codification with even stronger tones. Professor Wang Yong of China
University of Political Science and Law argued for “making a civil code with
commercial law characters”.80 Professor Shi Tiantao of Tsinghua University
even stated that it would be “ignorant and presumptuous” to attempt to
include all civil and commercial laws into a uniform code. 81

         (5) Redefining the boundary of public and private law. Unlike
capitalist countries, China today is still a socialist country practicing a
“socialist market economy” with public ownership and state economy being
guaranteed as the foundation of the economic system and the leading force
of the country.82 As such despite the dynamic marketization the notion made
by Vladimir Lenin, the paramount leader of the former Soviet Union while
adopting its Civil Code of 1922, that everything in economic areas should
belong to governance of public law rather than private law 83 still sees its
influences on civil and commercial legislation in China today. For instance,
although equal protection has been stipulated as a basic principle of the Law
on Rights in rem,84 the existing enactments apparently provide the
government with strong power to demolish houses and relocate the
inhabitants with compulsory measures since unclearly defined “public
interest” and government power have enjoyed superiority over private rights
almost all the time. The right of private parties to challenge the government


79
    The Debates between Civil and Commercial Law Circles on Adoption of General Principles of
Commercial Law Comes Back, SHIJI JINGJI BAODAO [21ST CENTURY BUSINESS HEALD] (Guangdong, Jan.
13, 2009) http://finance.sina.com.cn/roll/20090113/02585751273.shtml.
80
   Yong Wang, China Needs a Civil Code with Commercial Characters, ZHONGGUO FALV PINGLUN [CHINA
L. REV.], no. 4, 2015, at 30.
81
   Tiantao Shi, Can Civil Codification Achieve Civil-Commercial Law Unification?, ZHONGGUO FALV
PINGLUN [CHINA L. REV.] no. 4, 2015, at 33.
82
   See Art. 7 of the Constitutional Amendments of 1993 and Art. 6 and 7 of the Constitutional
amendeds in 2004.
83
   Quoted from Yimei Wu, Exploring the Different Legislative Paths of Civil Codification in China and
Russia, QIUSHI [SEEKING TRUTH], no. 2, 2010, at 66; see also Epstein, supra note 15, at 162.
84
   See Law on Rights in rem (promulgated by the Nat'l People's Cong., Mar. 16, 2007, effective
Oct. 1, 2007), pt. I, ch. 1, art. 3-4, 2007 STANDING COMM. NAT’L PEOPLE’S CONG. GAZ. (China).




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demolition decisions in the People’s Court was not allowed until early 2011
under the pressure of a large number of fatal incidents in brutal demolitions
nationwide.85 Even under the new Regulation the rights and interest of
lessee/tenants of the land to be taken is virtually ignored and the judicial
remedy may be allowed only against the government decision concerning
demolition and monetary compensation for the premises concerned, but not
available for any equity claims for the land use right. According to a recent
survey based on the government statistics, in 2010-2014 approximately
800,000 cases were filed against the government with more than 46% of
which where land property related, and with only a 10% success rate. 86

         Apparently the codification may not progress well unless the
boundary of public and private laws can be better defined. In                                 current
legislations, to a large extent the political ideology and public policy are still
intermingled with private laws. For instance, the Law on State-Owned Assets
of Enterprises sets out a legal duty to make the value of state investment
“maintained and increasing” and to obtain the government approval of
major company decisions before the shareholders’ meeting.                       87
                                                                                     Other similar
examples may include legal mandates for not only establishment of grass-
root organizations of the Communist Party in companies, but also provision
of “necessary conditions” for their activities;88 different standards to vitiate
contracts against private and public interests in favor of state protection; 89
and prohibition of state owned enterprises from becoming a general partner
of a partner firm.90 In the most recent SOE reform, the Party-State demanded




85
   The State Council promulgated the Regulation on the Expropriation of Buildings on State-
owned Land and Compensation on Jan 21, 2011 to replace the previous regulation adopted in
2001.
86
   Report, 800000 Lawsuits against the Government in Five Years with Only 10% Winning Rate,
Wangyi [Net Ease] (Jan. 21, 2016).
87
   See Law on State-Owned Assets of Enterprises (promulgated by the Standing Comm. Nat'l
People's Cong., Oct. 28, 2008, effective May 1, 2009), ch. 1, art. 8 and ch. 5.1, art. 34, 2008
STANDING COMM. NAT’L PEOPLE’S CONG. GAZ. (China).
88
   See Company Law (promulgated by the Standing Comm. Nat'l People's Cong., Dec. 28, 2013,
effective Mar. 1, 2014) (originally adopted as Company Law of the PRC (1993)), ch. 1, art. 19, 2013
STANDING COMM. NAT’L PEOPLE’S CONG. GAZ. (China).
89
   See Contract Law (promulgated by the Standing Comm. Nat'l People's Cong., Mar. 15, 1999,
effective Oct. 1, 1999), ch. 3, arts. 52, 54, 1999 STANDING COMM. NAT’L PEOPLE’S CONG. GAZ. (China).
90
   See Partnership Enterprise Law (promulgated by the Standing Comm. Nat'l People's Cong.,
Aug. 27, 2006, effective Jun. 1, 2007) (amending Partnership Enterprise Law (1997)), ch. 1, art. 3,
2006 STANDING COMM. NAT’L PEOPLE’S CONG. GAZ. (China).




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to clarify the legal status of the Party leadership in companies and
incorporate it into corporate governance in Chinese enterprises system. 91

         In more recent years a new debate has emerged on the legislative goal
of civil and commercial laws. Some scholars, following the political policy of
the CCP argue that “(development) efficiency first with attention to social
justice” should still be the guiding principle in China’s civil legislation;92
whereas some others believe that in the legal field, the right goal should be
social justice first with adequate attention to efficiency of the economic
development.93 In this regard, apparently the private law will lose its entire
value if it becomes subordinate to the government policy, regardless of its
political attraction and pride.

         Despite the heated debates and innovative suggestions, the Draft
Principles of the Civil Code submitted to the national legislature in June 2016
have apparently achieved limited doctrinal success. In terms of structure
they have still followed the GPCL and maintained the chapters on contract,
properties, torts, family relations and succession. Although some notable
changes have occurred, such as to include the stipulation of entitlements of
unborn fetus, reduction of limited civil capacity age from ten to six,
recognition of virtual property, introduction of ecological restoration as a
new civil liability and extension of statutory limitation from two to three
years, were made, the Draft Principles are far from being adoptable. For
instance, the failure to stipulate the principle of “absence of legal prohibition
meaning freedom” in civil activities, omission of the personal information
rights and unclear distinction of business and non-profitable juridical
persons are pointed by the scholars as apparent defects. 94




91
   See The CCP and the State Council, The Guiding Opinions on Deepening the SOE Reform, para.
24 (Aug. 24, 2015).
92
   The view was endorsed by the Central Committee of the Communist Party of China in 1994 in
its Decision on Certain Issues to Establish a Socialist Market Economy in China. For a recent
article that continues to support the goal: see Li Li, Conflicts and Choices of Value Goals in China’s
Civil Legislation, FAXUE LUNTAN [LEGAL FORUM], no. 3, 2010, at 82.
93
   See QIU BEN, Scientific Development and Legal System Construction, IOLAW.ORG.CN (2005),
http://www.iolaw.org.cn/showArticle.asp?id=1395.
94
    Report, “Consultation of the Draft Principles of Civil Law”, Canxin Net, 6 July 2016, at.
http://china.caixin.com/2016-07-06/100962883.html (in Chinese).




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     5. FURTHER IMPLICATIONS OF THE CIVIL LAW CODIFICATION

The new round of codification, although is an encouraging move on the right
direction, will also be a serious test to the Party-State’s commitment to
private right protection and development of the rule of law and civil society,
or more specifically, as the first step to eliminate the ideology of the
Leninism against private rights for a long time. Even after reform of almost
forty years, “private” in many circles is still a dirty word. For instance, in all
the official documents “non-public economy” has been used in order to
avoid the term of private economy. The top leaders have routinely made their
declaration firmly against privatization. 95 This in fact is just a reflection of
the continued influence of the Soviet ideology where the term “private
property” could not be used in the Soviet Constitution. 96

         In this context, given          that freedom and civil society               are the very
foundations of civil law the codification itself will inevitably be a process to
liberalize the people and the market from                    government control. In other
words, to what extent the spirits of civil society embodied in civil law, such
as individuals’ freedom and autonomy, equal entitlement and protection, and
empowering citizens to fight against the government intrusion, can be
recognized in the codification will pose sensitive political challenges first to
the Party-State and the test to measure the success of the codification. 97 This
is echoed in the thesis of Professor Lawrence Friedman of Stanford
University that codification may have great political meaning in a society. 98
Professor Yeong-Chin Su, a leading legal authority and Vice President of
Judicial Yuan of Taiwan, also pointed out that civil legislation in mainland
China has to compromise with the political ideology and as a result, whether




95
   See China Says Western-style democracy impossible for CCP Dinasty, CHINA DAILY MAIL (Beijing, Mar.
13, 2013) https://chinadailymail.com/2013/03/13/china-says-western-style-democracy
impossible-for-ccp-dynasty/.
96
   See Epstein, supra note 15, at 168.
97
   See Xianchu Zhang, Level Playing Field as an Institutional Challenge to China as a Socialist Market
Economy, in FINANCE, RULE OF LAW AND DEVELOPMENT IN ASIA 76 (Jiaxing Hu, Matthias
Vanhullebush, Andrew Harding eds., 2016).
98
   Cf. LAWRENCE M. FRIEDMAN, THE LEGAL SYSTEM 271 (1975).




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the    legislation     will    lead      to   more      institutional     reform       or     enhanced
instrumentalism need to be observed with uncertainty for a longer time. 99

          Despite heated debate on the direction, structure and content of civil
law codification, it has been generally agreed that research and study on the
fundamental theories and rules of civil/commercial laws and local conditions
of transplantation of foreign institutions are still far from sufficient and
thorough.100 Particularly, some scholars argue that civil codification in China
needs to breakthe yoke of not only political ideology, but also technical logic
and structural patterns, otherwise the rules borrowed from the western
world may not be effectively used to deal with the problems facing China as a
transitional economy, such as equal competition, business autonomy and
private     property      right     protection.      They      have     further       criticized         the
codification movement to pursue more in form than the real spirit of civil
law.101

          Indeed, although currently all of the major components of civil law
codification, including the Contract Law, the Law of Rights in rem, the Tort
Liability Law and the Governing Law Applicable to Foreign Related Civil
Relations, have been promulgated given the intense academic controversies
reflected above the enactment progress is still facing a great deal of
uncertainties. Moreover, the approach taken in the past 30 years to give way
to comprehensive codification with a piecemeal enactment in order to deal
with dynamic and rapid market developments in China has in turn
significantly      increased       the    difficulty      to   sort    out    the     conflicts         and
inconsistencies in the existing legislation and digest them in a rational
structure.

          Although there have been serious debate on civil law codification and
diversified transplantation of legal rules, fundamentally speaking, China has


99
    Compare Yeong-Chin Su, System Orientation and Construction Rules of Modern Civil Code—
Suggestions to Civil Codification of Mainland China, JIAODA FAXUE [L. J. OF JIAOTONG U.], no. 1, 2010, at
92.
100
    See Zuo Zuo Shen & Xiao Geng Zhao, Ten Academic Years of Civil Codification: 1997-2007, HENAN
ZHENGFA GANBU GUANLI XUEYUAN XUEBAO [JOURNAL OF HENAN ADMINISTRATIVE INSTITUTE OF POLITICS
AND LAW], no. 4, 2011, at 116; and Jiang Yu, Centenary Notes on Civil Codification in China Since 1911,
ZHENGFA LUNTAN [TRIBUNE OF POL. SCIENCE AND L.], no. 4, 2011, at 116.
101
    See Yiyong Su, Form at the Expenses of True Significance: From the Tang Lu Complex to Civil Code
Complex, ZHONGGUO SHEHUI KEXUE [SOC. SCIENCES IN CHINA], Summer 2005, at 123.




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maintained its civil law tradition. As Professor Christiane C. Wendehorst of
Vienna University observed, “I have never seen any scholars who support the
Pandekten system as strong as I saw in China. Many of them favor the
German law even more than myself.”102 Codification in China has long been
viewed as a crucial benchmark of maturity of a legal system, the highest
stage    of   legal    systematization        and     the full     display      of    institutional
civilization.103 As such, despite uncertainties and difficulties civil law
codification will continue to be the goal of the national legislature.

         As reflected above, the relationship between civil and commercial
legislation must be further sorted out in the course of civil law codification.
In fact, the approach to combine civil and commercial legislation has led to
some irrational results in dealing with civil and commercial disputes. For
instance, Art. 121 of Contract Law of 1999 has introduced strict liability to
deal with any breach regardless of civil or commercial contracts. This is
considered an example of “over-commercialized legislation”.104 By the same
token, Art. 410 of the Contract Law provides that both the principal and the
agent may terminate a mandate contract any time without differentiating the
nature of contracts concerned, which is identified an example of “under-
commercialized legislation”.105

         Despite the enthusiasm on the German Pandekten system, the
legislation with the piecemeal, pragmatic and extensive transplanting
approach since the 1970s have also made the legal system suffer from lack of
internal coordinated synergy. Rationalization and harmonization of the
entire system are further complicated with the transplantation of many
private law rules from not only civil, but also common law jurisdictions
extensively      for    many      years,     such     as    floating     charge,106          business


102
    Christiane Wendehorst, Exploring Uniformed Civil Code: A Comparative Study of EU and China,
QUINGHUA FAXUE [TSINGHUA L. J.], no. 4, 2010, at 13.
103
    See Liming Wong, Formulation of Civil Code in China: Review and Prospective, FAXUE LUNTAN [LEGAL
FORUM], no. 5, 2008, at 5); and Tian Yin, On Civil Law Codification in China, ZHENGZHI YU FALV [POL.
SCIENCE AND L.] , no. 2, 2006, at 60-66.
104
     Gu Zhang, Commercial Law as a Hermit Crab – on Independece and Special Characteristics of
Commercial Law, QINGHUA FAZHI LUNHENG [TSINGHUA J. OF RULE OF L.], 2005, at 25.
105
     Yan Chuan Wang, Types of Commercial Conducts and DIversified Legislation, DANGDAI FAXUE
[CONTEMPORARY L. REV.], no. 4, 2011, at 67, 74.
106
    See Law on Rights in rem (promulgated by the Nat'l People's Cong., Mar. 16, 2007, effective
Oct. 1, 2007), pt. IV, ch. 17.2, art. 223, 2007 STANDING COMM. NAT’L PEOPLE’S CONG. GAZ. (China).




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reorganization with debtor in possession, 107 derivative action,108 independent
directors,109 punitive damages,110 limited liability partnership111 and a trust
system.112 It seems the trend now that although the civil law tradition may
still dominate legislation on civil matters, commercial enactments are
increasingly subject to heavy influence of common law rules and doctrines.

        Heated academic debate will no doubt deepen understanding of the
key issues concerned and facilitate progress of the civil law codification,
however, the irrational division of teaching and research work leading to a
variety of schools and study associations with sectarian bias has complicated
the situation. Thus far the national Civil Law Association and Commercial
Law Association as well as Economic Law Association have been established
separately with their annual conferences and research agendas. In the debate
over how to define the borderline of different subjects, some scholars have
even denied the necessity to have any separate department of commercial
law. According to them, combination of civil and commercial laws and
expansion of public law into private areas have left no basis for independence
of commercial law.113 Such quarrel seems to aim more at increasing influence
of certain schools than at promoting academic comprehension.

        Civil and commercial law enactments in China offer some interesting
experiences not only to diversification of law, but also comparative law
theories on legal transplantation or transformation. According to Professor
Pitman Potter of University of British Columbia, China has taken a dynamic


107
     See Enterprise Bankruptcy Law (promulgated by the Standing Comm. Nat'l People's Cong.,
Aug. 27, 2006, effective Jun. 1, 2007), ch. 8.1, art. 73, 2006 STANDING COMM. NAT’L PEOPLE’S CONG.
GAZ. (China).
(See Art. 73 of the Enterprise Bankruptcy Law of 2006.)
108
     See Company Law (promulgated by the Standing Comm. Nat'l People's Cong., Dec. 28, 2013,
effective Mar. 1, 2014) (originally adopted as Company Law of the PRC (1993)), ch. 6, art. 151,
2013 STANDING COMM. NAT’L PEOPLE’S CONG. GAZ. (China).
109
    Id. ch. 4.5, art. 122.
110
    See Tort Liability Law (promulgated by the Standing Comm. Nat'l People's Cong., Dec. 26,
2009, effective Jul. 1, 2010), Ch.5, art. 47, 2009 STANDING COMM. NAT’L PEOPLE’S CONG. GAZ.
(China).
111
    See Partnership Enterprise Law (promulgated by the Standing Comm. Nat'l People's Cong.,
Aug. 27, 2006, effective Jun. 1, 2007) (amending Partnership Enterprise Law (1997)), ch. 2.6,
2006 STANDING COMM. NAT’L PEOPLE’S CONG. GAZ. (China).
112
    See Trust Law (promulgated by the Standing Comm. Nat'l People's Cong., Apr. 29, 2001,
effective Oct. 1, 2001), 2001 STANDING COMM. NAT’L PEOPLE’S CONG. GAZ. (China).
113
    See Jichun Shi & Yueqin Chen, On Commercial Law, ZHONGGUO FAXUE [CHINESE LEGAL SCIENCE], no.
4, 2001, at 91-104 (2001); see also Jichun Shi & Haifang Yao, On Commercial Law Again, BEIJING
SHIFAN DAXUE XUEBAO [J. OF BEIJING NORMAL U. - SOC. SCIENCE EDITION], no.1,2003, at 45-48.




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strategy of selective adaptation to balance local needs with external
conditions.114     Although       the    important        role    of   civil    and       commercial
legislations in promoting China’s opening and modernization should be fully
recognized, certain side-effects should also be noted. However, a jigsaw
puzzle situation of the Chinese private laws with the combination of the
Party-State ideology, international borrowing from both civil and common
law jurisdictions, the transitional needs and local characteristics have thus
far rendered the system confusing, inconsistent, and poorly functioned. It
has been openly admitted that “The vitality of laws lies in their
enforcement” is a challenge facing China’s rule of law development. 115 From
this perspective, the new round of codification should be best used as an
opportunity to not only systemize, but more importantly rationalize and
harmonize the current legislations.

         In addition to the compilation of legal rules, the new round of civil
codification will inevitably have implications on reorientation of legal culture
in China. As some experts pointed out, unlike Roman private law with a
formally rational system of applying law to factual problems,116 the German
pandectists are more difficult to borrow since a part of general principles for
the whole system is added. As a result, transplantation may have to be made
on a wholesale basis.117 However, this approach has not worked coherently
with other cultural force in China, such as the Confucianism with emphasis
on social norms and the former Soviet Union ideology subordinating private
rights to the Party-State interest. For example, some scholars have argued
for shifting the paradigm from Western analyzing approach to Eastern
synthesizing approach with due attention to not only the system of civil law,
but also internal logic relations of the rules and the inner structure as well as
relations of different values.118

         The legislative and academic debates have also reflected in the judicial
practice. The first independent unit within the People’s Court responsible for

114
     See Pitman B. Potter, Globalization and Economic Regulation in China: Selective Adaptation of
Globalized Norms and Practices, 2 WASH. U. GLOBAL STUD. L. REV. 119 (2013).
115
    Info. Office of the State Council, China, The Socialist System of Laws with Chinese Characteristics
(Oct., 2011), http://www.scio.gov.cn/zfbps/ndhf/2011/Document/1036756/1036756.htm.
116
    See Weber, supra note 15.
117
    See Epstein, supra note 15.
118
    See Han, supra note 23, at 210.




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handling cases of commercial nature was named “economic trial division”
and first established at the local level in 1979, parallel with the division of
civil trials. Such practice was soon expanded to the entire judicial system,
including the Supreme People’s Court. Under the Preliminary Opinion of the
Supreme People’s Court on the Scope of Jurisdiction of Economic Trial
Division of 1980, the newly established division was empowered to hear
disputes concerning contract, finance, insurance and intellectual property
rights between enterprises. In 1980s jurisdiction of the economic trial
division was further expanded to hear disputes on trade, transportation,
bankruptcy, commercial paper, financial lease, competition, securities and
tort liabilities concerning enterprises.119 Such development clearly reflected a
practice to separate economic/commercial case handling from traditional
civil trials.

         The direction, however, was changed in 2000 when the entire
people’s court system was restructured as part of preparation work for
China’s accession to the WTO. With the approval of the CCP, a larger civil
trial division was established with commercial trial as one of the subdivision.
The new civil trial division includes four sub-divisions with roughly divided
jurisdiction to deal with traditional civil cases, commercial cases, intellectual
property right cases and foreign related cases respectively.120 However, the
division of the jurisdiction seemed to be based on an irrational foundation.
For instance, the first trial division is empowered to hear not only family and
tort cases, but also labor, real property development and security, and
construction disputes. As a result, although the reform in a sense further
promoted private rights protection with more judicial attention and resource
and streamlined the functions of judicial branches, inclusion of the
commercial trials into the larger civil law system has been pretty
controversial since the philosophical age and valued to settle commercial
cases, such as market efficiency, safety of transaction, and business
autonomy, may be different from those of civil cases handling and such
blending may hinder development of commercial trials according to its own

119
    See Supreme People’s Court, National Conference of Economic Trials (May 6, 1993) (transcript
available in China Investment Website).
120
    See The SPC Implements at the Full Scale Institutional Reform, RENMIN RIBAO HAIWAI BAN [PEOPLE’S
DAILY-OVERSEAS EDITION], (Beijing, Aug. 9, 2000).




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norms and logics. Such difference is well illustrated in a recent case study
survey conducted by two Beijing judges. While facing a dispute concerning
the enforcement of a liquidated damage provision of a contract, most of the
thirty civil judges involved in the study opined that excessive freedom of
contract has led to an unfair result, whereas almost all of the thirty
commercial judges held that the parties’ autonomy and bargain should be
respected.121

         Furthermore, as indicated above, in the past forty years a very large
number of judicial circulars and interpretations have been promulgated to
guide the judicial practice with the legal weight as the law. 122 Most of these
rules have been adopted according to the practical needs with a pragmatic
approach with the judicial activism, such as an insurance company being
held to have effectively waived its rights to deny the validity of an insurance
contract where it was entered with the company’s knowledge that the
insured failed to carry out her duty of full disclosure. 123 Sometimes these
judicial rules may not be even read together with the enactments concerned.
For example, Art. 51 of the Contract Law provides that a contract concluded
by a party without disposition right shall be invalid (e.g. the contract not
formed), unless the transaction is ratified by the right owner, or the
contracting party obtained the right after the conclusion of the contract
concerned; but Art. 3 of the SPC Interpretation on Dealing with Sales Contract
Disputes dated 10 May 2012 stipulates that the People’s Court shall not
support the claim to invalidate a contract made by a buyer on the ground that
the seller does not have the ownership or disposition right over the subject
matter at the time of contracting, although he may be entitled to damages
and rescission (e.g. the contract formed already).124


121
    See Chun Peng & Guorong Sun, Considerations and Practice of Commercial Trials under the Larger
Civil Division Framework, FAÒV SHIYONG [J. OF THE NAT’L JUDGES COLLEGE OF THE SPC], no. 12, 2012, at
68-69 .
122
     See Law on Legislation (promulgated by the Standing Comm. Nat'l People's Cong., Mar. 15,
2015, effective Mar. 15, 2015) (amending Law on Legislation (2000)), ch. 6, art. 104, 2015
STANDING COMM. NAT’L PEOPLE’S CONG. GAZ. (China).
123
    See He Lihong v. Shunde Sub-branch and Foshan Branch of China Life Insurance Co., decided
by the Intermediate People’s Court of Foshan on 10 Jan. 2006; see also endorsed by the SPC, in
Zuigao Renmin Fayuan Gongbao [The SPC Gazette], vol. 2008, at 142 (in Chinese).
124
    See Interpretation of the Supreme People’s Court on Issues Concerning the Application of Law
for the Trial of Cases of Disputes over Sales Contracts, Supreme People’s Court (2012),
http://lawinfochina.com/display.aspx?lib=law&id=10976&EncodingName=gb2312.




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Apparently, as compared with the courts in Germany where precedents may
just play a limited role for persuasion and treated as a “source of soft law”,125
the Supreme People’s Court has been playing a much more active role in
law-making. However, thus far not much attention has been paid to sorting
out and incorporating the judicial contributions to civil/commercial law
developments in the civil codification as a crucial part of the legislation. As a
result, its legal status, relationship with the civil code and necessary
consolidation to a large extent are still left untouched. Professor Xue Jun of
Peking University has warned that the civil law codification has strayed from
the right path to rationalize the legal rules, sources and structures. Without
necessary correction, the codification will have no substantial sense, but add
more disarray in the legal practice.126

         Last, but not least, increasing influence of legal experts and scholars
in civil and commercial law codification should be recognized as an
important contribution to the rule of law development in China. For a long
time, legislative process has been dominated by government departments
and officials, where rules are often adopted not for promoting social justice,
but safeguarding bureaucrats’ interest and power. Such practice has become
a source of social conflicts.127 In civil law codification and enactment of other
basic civil and commercial laws, the academic complexity and professional
technicality have to a large extent prevented bureaucrats from overstepping
into the legislative process. As reflected above, it has become a practice that
the top national legislature would entrust the drafting of these laws to a
jurist group to set out the legislative basis. This has been praised as not only
a better way to improve legislative quality, but also an important means to
develop democratic enactment.128


125
    Vincy Fon & Francesco Parisi, Judicial Precedents in Civil Law Systems: A Dynamic Analysis, 26
INTL. REV. OF L. AND ECON. 519 (2006).
126
    See Jun Xue, How Judicial Interpretation Be Treated in Civil Law Codification?, ZHONGGUO FAÒV
PINGLUN [CHINA L. REV.], no. 4, 2015, at 48.
127
    See LI YIA BIAO , Interest Expansion Behind Bureaucratic Legislation: Respecting People’s Will or
Bureaucrat’s Interest?, NEWS.XINHUANET.COM (Mar. 12, 2006),
http://news.xinhuanet.com/misc/2006-03/12/content_4294131.htm. See also Qiu, F, Towards
Democratic Legislation, Zhongguo Xinwen Zhoukan [China News Weekly] (Mar. 7, 2005),
http://finance.qq.com/a/20050307/000105.htm.
128
    See Jihong Mo, “Expert Participation in Law-Making: An Important Way of Democratic
Legislation”, Zhongguo Zhengxie Bao [Journal of China Political Consultative Conference], 9 Nov.
2009.




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      6. CONCLUSION

Economic reform and opening the door for almost forty years have changed
China greatly and prepared conditions for its development toward a civil
society with basic civil and commercial laws having been promulgated on the
basis of the GPCL. On this basis, the new round of civil law codification will
certainly provide new momentum with China’s market development and
legal    modernization.        However,      the      codification    is   still    facing        great
uncertainties from political, cultural, doctrinal aspects known as Chinese
characteristics. As Professor Hein Kötz of Max-Planck-Institute pointed out,
“In language, method, structure and concept the Draft (Civil) Code (of China)
is a ‘learned’ code clearly based on what is sometimes called the civil law
tradition.”129 However, amongst all the challenges, changing f the traditional
political ideology and transferring powers from the Party-State to more
respect private rights and the rule of law will be the most daunting one. In
this regard the development path of China may be no exception to those of
other market oriented jurisdictions.130




129
    See Hein Kötz, Foreword to THE LEGISLATIVE RESEARCH GROUP OF THE CHINESE ACADEMY OF SOCIAL
SCIENCES, supra note 26, at XXVI.
130
    See Tom Ginsburg, Does Law Matters for Economic Development? Evidence from East Asia, 34 L. &
SOC’Y R. 829; and Chenggang Xu, China’s Political Economic Institutions and Development, 35 CATO. J.
525 (2015).




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