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FPC Briefing: Rule of Law in China: A priority for businesses and Western Governments

Article by David Lawrence and Johnny Patterson

September 24, 2018

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FPC Briefing: Rule of Law in China: A priority for businesses and Western Governments

On the eve of China’s ‘4th of May Day’ in 2017, President Xi Jinping announced that “the rule by law is our historical mission.” It is a sentence which harks back to a centuries old legal system which many Chinese have regarded with pride. And yet its utterance was only necessary because, even over 30 years after China began its journey towards a capitalist, rules-based economic system, rule of law is still a source of tension in China. Indeed, many Western commentators noted and mocked the phrase ‘rule by law’ as fundamentally missing the point of ‘rule of law’, even if in Mandarin they mean the same thing.

The central argument of this essay is that Western governments and businesses should take seriously rule of law in China and devote their diplomatic and lobbying powers to seek better Chinese legal institutions. Through examining China’s legal history and exploring recent interactions between foreign investors and China’s legal system, the authors argue that many historical and current diplomatic tensions between China and the West – including the trade war and disputes around intellectual property rights – are related to China’s poor legal infrastructure, which does not meet Western standards of rule of law. Looking to the future, this poses serious problems as China expands its geopolitical visions and looks to export its own values and institutions.

Ultimately, the authors argue that the rule of law has the potential to be an effective point of diplomatic engagement with China. There is an appetite within China and among foreign investors for change, and Xi Jinping’s Government should take advantage of the economic and diplomatic opportunities presented by reforming China’s legal system. Chapter 1 looks at China’s rich legal history and how rule of law has failed to take root in China, giving us the system we see in China today. Chapter 2 looks at contemporary disputes between Western businesses, governments and China, and argues that many of these are closely linked to issues around rule of law. Chapter 3 argues that the rule of law offers an excellent opportunity to engage productively with China and that the opportunity should be seized by Western governments and businesses.

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About authors:

Johnny Patterson works for a human rights NGO and is studying a Human Rights MSc at the London School of Economics. His research focuses on the rule of law in China.

David Lawrence is Senior Political Adviser at the Trade Justice Movement and previously worked in Parliament. He has an interest in China having grown up there, and previously studied at the London School of Economics and the University of Oxford.


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