Law Commons^™

Judging China: The Chinese Legal System In U.S. Courts, Donald C. Clarke

GW Law Faculty Publications & Other Works

How should American courts understand China’s legal system? How do they understand it, and are they doing a good job? These questions have become important as economic and social ties between China and the United States have mushroomed since China’s days of Maoist isolation. The answers have implications not just for China-related cases, but for the way U.S. courts treat authoritarian and illiberal legal systems more generally.

This Article presents the first attempt to answer these questions empirically through an intensive study of all cases in which parties either sought dismissal to China on forum non conveniens grounds or sought …

Review Of Shucheng Wang, Law As An Instrument: Sources Of Chinese Law For Authoritarian Legality (Cambridge University Press 2022), Donald C. Clarke

GW Law Faculty Publications & Other Works

This brief note reviews Shucheng Wang’s Law as an Instrument: Sources of Chinese Law for Authoritarian Legality. It finds that the author provides a well-informed, in-depth exploration of the sources of Chinese law and offers rich food for thought on these and other questions in the world of Chinese legal studies. The author brings a good sense of the political realities of the Chinese legal system to his study.

China’S Legal System And The Fourth Plenum, Donald C. Clarke

GW Law Faculty Publications & Other Works

The Chinese Communist Party (CCP) Central Committee’s Fourth Plenum, held in October 2014, was its first meeting specifically devoted to the legal system, and as such attracted much from those interested in Chinese law. But the official Decision of the Fourth Plenum does not represent a conversion to the ideology of rule of law. Even if the leadership were to desire the system of accountability and institutionalized restraint on government that is generally understood by the term “rule of law,” it could not be accomplished any time soon and would require changes in entrenched features of the current political and …

The Peter Humphrey/Yu Yingzeng Case And Business Intelligence In China, Donald C. Clarke

GW Law Faculty Publications & Other Works

The case of Peter Humphrey and Yu Yingzeng, convicted in China on August 2014 on charges of unlawful acquisition of citizens’ personal information, raises important issues about Chinese law. A narrow but important issue is how Chinese law draws the line between lawful and unlawful acquisition of information, a practice routinely carried out by businesses and individuals. This article examines the trial transcript and judgment in the Humphrey/Yu case and finds that it sheds regrettably little light on what remains a murky question. A broader issue is whether the Chinese legal system can be counted on to operate in a …

The Bonding Effect In Cross-Listed Chinese Companies: Is It Real?, Donald C. Clarke

GW Law Faculty Publications & Other Works

A common explanation offered for PRC companies’ listing overseas is that they receive a price premium because listing overseas demonstrates a willingness to submit to the more shareholder-protective regulatory regime of the foreign jurisdiction and stock market. This explanation is commonly known as the bonding hypothesis. There is some empirical support for the proposition that listing overseas does indeed bring a price premium, although issues of causality are difficult to sort out. If it is true that investors view an overseas listing of a Chinese firm as something worth paying a premium for, the question remains, however, as to whether …

Mapping The Law Of Wto Accession, Steve Charnovitz

GW Law Faculty Publications & Other Works

The member countries of the World Trade Organization (WTO) joined either as original members or through the Article XII accession process. To date, over 20 members have joined through accession including most notably China in 2001. Recently, Vietnam completed its accession negotiations and Russia made do so sometime in 2007. Governments joining the WTO through accession have to abide by WTO rules, as all members do, but applicant governments are also often asked to accept individualized rules tailored for them through negotiations. These special rules have not received extensive examination in previous scholarship. The purpose of this article is to …

The Wto’S Revised Government Procurement Agreement - An Important Milestone Toward Greater Market Access And Transparency In Global Public Procurement Markets, Robert D. Anderson, Steven L. Schooner, Collin D. Swan

GW Law Faculty Publications & Other Works

In December of 2011, the Parties to the World Trade Organization Government Procurement Agreement (GPA) adopted significant revisions to the Agreement. The revised Agreement comprises (a) a much-needed modernization of the text of the Agreement, (b) an expansion of related market-access commitments by the Parties, and (c) a set of Future Work Programs intended to enhance transparency among the Parties and improve the administration of the Agreement. In these unstable economic times, the importance of the GPA and its improvements cannot be overstated.

This article also bemoans the media's misrepresentation of the ongoing process of China's negotiated accession into the …

Pathway To Minority Shareholder Protection: Derivative Actions In The People's Republic Of China, Donald C. Clarke

GW Law Faculty Publications & Other Works

Using a dataset of Chinese judicial opinions arising in over fifty cases, this paper analyses the development and current implementation of shareholder derivative actions in the courts of the People’s Republic of China (“PRC”), both before and after the derivative lawsuit was explicitly authorized in the PRC’s 2006 Company Law effective January 1, 2006. In addition, we describe the very unique ecology of enterprise organization and corporate governance in modern China, and critique the formal design of the derivative action and offer reform suggestions.

We find the design of the Chinese derivative lawsuit to be, in some respects, innovative and …

Reviewing Carbon Changes And Free Allowances Under Environmental Law, Steve Charnovitz

GW Law Faculty Publications & Other Works

This article analyzes the American Clean Energy and Security Act under international environmental law and standards. The Act requires that importers pay a fee if certain requirements regarding the country and sector are satisfied. The article presents general difficulties with enforcing international environmental law, namely, the absence of a unitary government. Next, the article describes the following sources of international law: custom, treaties, soft law, and non-binding declarations. I conclude that the carbon tariffs from the American Clean Energy and Security Act are inconsistent with both hard and soft international environmental law.

U.S. Convergence With International Competition Norms: Antitrust Law And Public Restraints On Competition, William E. Kovacic, James C. Cooper

GW Law Faculty Publications & Other Works

In this Article we focus upon an area in which greater convergence of U.S. policy with the practice of many foreign countries is long overdue: the treatment of public policies that suppress competition. Whereas the European Union (“EU”) and numerous other jurisdictions have taken strong measures to limit restraints imposed by national government authorities and political subdivisions, U.S. antitrust policy in many ways is more tolerant of public restraints upon business rivalry. Since the early twentieth century, Supreme Court doctrines have evolved to grant states and the federal government broad rights to enact laws that restrain competition. Further, individual groups …

The Ecology Of Corporate Governance In China, Donald C. Clarke

GW Law Faculty Publications & Other Works

The substantive norms of Chinese corporate governance have been studied extensively inside and outside China. Yet much less attention has been paid to the Chinese institutional environment that determines whether and how far those norms will be made meaningful. While complaints about general lack of enforcement are common, less common are analyzes that concretely tie institutional capacity to specific enforcement problems. This article aims to fill that gap. It surveys a number of state and non-state channels for the enforcement of corporate governance rules and standards in China, from markets to regulatory bodies, looking at the specific capacities of each. …

China: Creating A Legal System For A Market Economy, Donald C. Clarke

GW Law Faculty Publications & Other Works

Since the early 1990s, China has come a long way in legislating the foundational rules for its reformed economy. Virtually all of the important areas-contracts, business organizations, securities, bankruptcy, and secured transactions, to name a few - are now covered by national legislation as well as lower-level regulations. Yet an important feature of a legal structure suited to a market economy is missing: the ability of the system to generate from below solutions to problems not adequately dealt with by existing legislation. The top-down model that has dominated Chinese law reform efforts to date can only do so much. What …

Taiwan's Wto Membership And Its International Implications, Steve Charnovitz

GW Law Faculty Publications & Other Works

In contrast to other international organizations, the World Trade Organization does not require its members to be states. This constitutional feature has allowed Taiwan to join the WTO alongside China. As a result, the WTO is now the only major international organization in which Taiwan can participate as a full member. This article explores some implications of this unique situation for Taiwan, for the WTO, and for international law. The article contends that Taiwan's membership in the WTO is not itself a bilateral treaty with China and does not itself change the legal relationship between Taiwan and China. What Taiwan's …

The Independent Director In Chinese Corporate Governance, Donald C. Clarke

GW Law Faculty Publications & Other Works

Corporate governance (gongsi zhili) is a concept whose time has come in China, and the institution of the independent director is a major part of this concept. Policymakers in several countries such as the United Kingdom and Japan have turned to independent directors as an important element of legal and policy reform in the field of corporate governance. In August 2001, the China Securities Regulatory Commission (CSRC) issued its Guidance Opinion on the Establishment of an Independent Director System in Listed Companies. Covering all companies listed on Chinese stock exchanges (but not Chinese companies listed overseas), it constitutes the most …

How Do We Know When An Enterprise Exists? Unanswerable Questions And Legal Polycentricity In China, Donald C. Clarke

GW Law Faculty Publications & Other Works

One of the most perplexing aspects of Chinese enterprise law concerns the conditions under which state institutions will acknowledge and give effect to the existence of a business organization distinct from the natural or legal persons that participate in its operations. The answer might appear to be simple - they will do so whenever legally stipulated conditions are met - but this answer would be wrong. State institutions often give real and meaningful effect to the existence of entities with no apparent statutory basis, or whose legal basis dictates consequences that seem at odds with the consequences called for by …

The Enforcement Of United States Court Judgments In China: A Research Note, Donald C. Clarke

GW Law Faculty Publications & Other Works

Whether the judgments of United States courts can and will be enforced in China is a question that will be increasingly asked as economic ties grow between the two countries. At present, at least, the answer is straightforward: U.S. judgments will not be enforced. Chinese law requires the existence of a treaty or de facto reciprocity in order to enforce a foreign judgment; neither exists between the United States and China. Research reveals specific cases in which enforcement was refused and no cases in which enforcement was granted. Thus, the best alternative for litigants seeking the assistance of Chinese courts …

Empirical Research Into The Chinese Judicial System, Donald C. Clarke

GW Law Faculty Publications & Other Works

The last few years have seen a proliferation of programs by Western states and international agencies designed, in broad terms, to promote reforms in the Chinese judicial system. What is not clear, however, is whether there has been systematic thinking about the precise goals to be sought in these and other projects, whether these goals are appropriate, and indeed whether their achievement can even be ascertained in some measurable way. This paper is an attempt to think about what we know, what we might want to know, and what we can know about China's judicial system, broadly defined.

A key …

Puzzling Observations In Chinese Law: When Is A Riddle Just A Mistake?, Donald C. Clarke

GW Law Faculty Publications & Other Works

Understanding the Chinese legal system is not simple because it is (probably) very different from a Western one. The understanding of the Chinese legal system that results from any study will depend crucially on the selection of a paradigm with which to define what counts as an observation and against which to measure and assess the observations, either descriptively or normatively. This is not to say that the selection of a paradigm will make the difference between understanding and not understanding. It will, however, make a difference between understanding in one way and understanding in another way. Whether one of …

China's Legal System And The Wto: Prospects For Compliance, Donald C. Clarke

GW Law Faculty Publications & Other Works

The impact of WTO membership both on China and its trading partners, both for good and for ill, has been greatly overstated. WTO treaty obligations and Dispute Settlement Body rulings will not become part of Chinese domestic unless specifically incorporated by Chinese legislation. Moreover, the WTO does not require a perfect legal system of its members; instead, it requires a degree of transparency and fairness in certain limited areas. Although some of China's WTO commitments will be difficult for it to fulfill, even non-fulfillment will not result in the predicted flood of WTO dispute settlement proceedings, since such proceedings can …

Corporate Governance In China: An Overview, Donald C. Clarke

GW Law Faculty Publications & Other Works

Corporate governance (gongsi zhili) is a concept whose time seems definitely to have come in China. Chinese definitions of corporate governance in the abstract tend to cover the system regulating relationships among all parties with interests in a business organization, usually spelling out shareholders as a particularly important group (e.g., Liu, 1999; Yin, 1999). But Chinese corporate governance discourse in practice focuses almost exclusively on agency problems and within only two types of firms: state-owned enterprises (SOEs), particularly after their transformation into one of the corporate forms provided for under the Company Law,1 and listed companies, which must be companies …

Economic Development And The Rights Hypothesis: The China Problem, Donald C. Clarke

GW Law Faculty Publications & Other Works

An important school of thought in institutional economics (the "Rights Hypothesis") holds that economic growth requires a legal order offering stable and predictable rights of property and contract because the absence of such rights discourages investment and specialization. Without the security of expectations offered by such a legal order, according to the Rights Hypothesis, the risks of a great number of otherwise beneficial transactions far outweigh their expected return, and as a result such transactions simply do not occur. Society is mired in an economy of short-term deals between actors bound by non-legal ties such as family solidarity which by …

Taiwan And The Wt0, Steve Charnovitz

GW Law Faculty Publications & Other Works

This paper is about Taiwan and the World Trade Organization. It discusses the history of Taiwan's involvement in the world trading system and the accession to the WTO. The paper then notes some unique features of Taiwan's membership and discusses the current political tension with China in the WTO. The paper ends with a discussion of the implications of Taiwan's membership in the WTO for potential Taiwanese membership in other international organizations.