Foundations of the Chinese legal system: history, sources, the Constitution, the hierarchy of norms, the Party and the courts, and where foreigners stand

The imperial tradition. For two thousand years China had written penal codes issued by the emperor, culminating in the Tang Code of the seventh century and the Qing Code that ended with the dynasty. Two schools of thought shaped them. Confucianism held that society is ordered by moral conduct and hierarchy (*li*) and that rulers should govern by virtue. Legalism held that clear, harsh, published rules (*fa*) must bind everyone. The imperial codes combined both: they were mainly criminal and administrative, and private disputes were often settled by mediation within families, guilds and villages rather than by courts. That preference for mediation and harmony has survived into the modern system.

Reform and revolution. After military defeats in the nineteenth century, the late Qing government began to borrow foreign law, above all from Japan and Germany. The Republic of China (from 1912) enacted modern codes, the ‘Six Codes’, on the civil-law model. After the People’s Republic was founded in 1949, the new government abolished the Nationalist legal codes and, in the 1950s, followed the Soviet model. Law was then largely swept aside in the 1960s and the Cultural Revolution, and legal institutions were rebuilt only after 1978, when the policy of reform and opening up began. The first modern criminal and criminal procedure laws and the first law on foreign investment (the Sino-foreign Equity Joint Venture Law) date from 1979.

The Constitution of 1982. The Constitution declares China a socialist state under the people’s democratic dictatorship. Since the 2018 amendment, Article 1 also states that the leadership of the Communist Party is the defining feature of socialism with Chinese characteristics. It sets out the state structure (Module 2), lists the fundamental rights and duties of citizens, and has a preamble that records the Party’s role in China’s history. China is a unitary state: local governments exercise powers delegated by the centre, not powers of their own.

The hierarchy. The Legislation Law (first passed in 2000 and since amended) ranks the sources in the order above. A higher norm prevails over a lower one, and a lower norm that conflicts with a higher one is invalid. The NPC Standing Committee has a system of filing and review: regulations and rules are sent to it so that conflicts can be found and corrected. Where norms of the same level conflict, the newer norm generally prevails over the older one, and a special norm over a general one. Because many rules for foreigners (on visas, on registering a company, on foreign exchange) are found in departmental rules and local rules, a foreigner must always check the rule of the ministry and the city concerned.

Judicial interpretations and guiding cases. China has no doctrine of binding precedent as in the common law. But the Supreme People’s Court issues judicial interpretations, general explanations of how a law applies, and lower courts are bound by them in practice. It also publishes guiding cases, selected decisions that lower courts should refer to when deciding similar cases. These are not precedent in the English sense, but they make the application of the law more uniform. Legal scholarship is persuasive but not a source of law.

The Party and the state. The Communist Party of China leads the state: its leadership is written into the Constitution, and Party committees and the Political and Legal Commissions oversee the work of courts, procuratorates and the police. The Constitution says that courts exercise judicial power independently, according to law, free from interference by administrative bodies, social organisations and individuals, but it does not say ‘independent of the Party’. Judges are appointed by the people’s congress at their level, and the Supreme People’s Court is accountable to the NPC. For a foreigner the practical lesson is that law and policy are linked: the text of a law matters, and so do official policy, local practice and the attitude of the regulator.

Rule of law. Since 1999 the Constitution has said that China governs itself according to law, and since the 2010s official policy has stressed ‘law-based governance’. Foreigners should understand two things. First, the system has real, detailed and enforced rules that apply to foreign individuals and businesses, on visas, taxes, contracts, data and many other subjects, and they are applied more strictly in some fields than in others. Second, officials have wide discretion, and a process that works smoothly in one city may be slower or stricter in another. Good planning therefore means knowing the rule, the authority that applies it and the practice.

Where a foreigner stands. The law of China applies to everyone in its territory, foreigners included (the territorial principle), and to some conduct abroad. A foreigner has the same protection under the law as a citizen in most fields, but also faces special rules: on entry and residence (Module 3), on investment (Module 4), on work, on owning property and on data. A dispute is called foreign-related when, for example, a party is a foreign person or company, the subject matter is abroad, or the legal fact happened abroad. That label can change the choice of law, the court, the service of documents and the way a judgment is enforced (Module 7). A Chinese-qualified lawyer is needed whenever a matter requires the law of Mainland China to be applied or a party to appear in a Chinese court or authority; a foreign lawyer can explain the system but may not give opinions on Chinese law as a Chinese lawyer does.