China Law Update

• Pages: 375-412

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2011] CHINA LAW UPDATE 375

CHINA LAW UPDATE

I. EXPRESS

(1) On March 10, 2011, Wu Bangguo, Chairman of the Standing

Committee of China’s National People’s Congress, announced that

the socialist legal system with Chinese characteristics has been

established. By 2010, China has issued 237 laws, over 690

regulations and more than 8600 local regulations.

TCLR comments: The amount of laws and regulations is not

enough to prove the comprehensive legal system.

(2) In 2010, the number of Chinese lawyer increased by 30

thousand, made the total number 200 thousand. Last year 330

thousand people took the national judicial examination while 14.29%

of them passed.

(3) The principle of non bis in idem is almost doomed to

extinction because cases have increased too quickly in recent years

while the Court is not equipped to investigate them.

(4) The Department of Commerce issued the Interim Provisions

on Security Review System of Foreign Investors’ Merger and

Acquisition with Domestic Company1 on March 4, 2011. After the

establishment of this regulation, the government has the right to

examine and suspend any M&A.

(5) Housing prices have continued to rise. China has

promulgated the Notice of the General Office of the State Council on

some issues about Further Regulating the real estate market

2(hereinafter Guobatiao(国八条) to curb housing prices. Local

authorities have promulgated a variety of detailed regulations, among

which the Purchase Restriction Order of Beijing was the most

stringent. It requires that buyers with local Hukou ( 户口);

[registered residence] should complete a 60% down-payment when

purchasing their second house in Beijing, while first time buyers

1 Shang wubu Shishi Waiguo Touzizhe Binggou Jingnei Qiye Anquan Shencha Zhidu Youguan

Shixiang de Zanxing Guiding (商务部实施外国投资者并购境内企业安全审查制度有关事项的暂行

规定) [the Interim Provisions on Security Review System of Foreign Investors’ Merger and Acquisition

with Domestic Company],

http://www.mofcom.gov.cn/aarticle/b/f/201103/20110307432771.html?2669231318=1920291027 (last

visited Jun. 27,2011).

2 Guowuyuan Bangongting Guanyu Jinyibu Zuohao Fangdichan Shichang Tiaokong Gongzuo

Youguan Wenti de Tongzhi (国务院办公厅关于进一步做好房地产市场调控工作有关问题的通知)

[the Notice of the General Office of the State Council on some issues about Further Regulating the real

estate market], http://www.gov.cn/zwgk/2011-01/27/content_1793578.htm (last visited Jun. 27, 2011).

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376 TSINGHUA CHINA LAW REVIEW [Vol. 3:373

with Hukou of other Provinces are obligated to present a five-year

tax certificate in Beijing.

(6) Budget Law of the People’s Republic of China 3

faces substantial revision, attracting wide attention. Ministry of

Science and Technology was the first government department to

publish a governmental budget.

(7) Fifty famous writers jointly signed an open letter to protest the

Library of Baidu. The Library of Baidu had uploaded many literary

works without authorization claiming that the uploads were done by

users and asking for the safe harbor provisions. But writers insisted

that the contents in the Library of Baidu were too much to be

uploaded only by netizens.

(8) On October 20, 2010, Yao Jiaxin, a senior student of Xi’an

Music College, knocked down Zhang Miao, the victim, then killed

her with a sharp knife and escaped, keeping her from subsequent

compensation. Yao’s lawyer argued that the cause of the

defendant’s action was passion. Xi’an Intermediate People’s Court

refused this view and sentenced Yao to death but with only a

compensation of 45 thousand.

This case becomes a focus concerned by society that whether the

death penalty should be abolished.

Yao decided to appeal. TCLR will follow up on the case in

subsequent issues.

(9) The Railway Transportation Courts and the Railway

Transportation Procuratorates of China will be administrated by the

local government instead of the vertical management of the central

government. That means the railway system is no longer self-

governing and self-supervising.

(10) The Budget Law of the People’s Republic of China

(promulgated March 22, 1994, effective January 1, 1995) is facing

a thorough amendment. The legislation is asking advices from the

public. The threshold of the taxable income of individual income

taxes should be improved is the biggest concern. People believe the

cutoff point will raise from 2000 RMB from 3000 RMB or more.

But experts say the public should pay more attention to the reform of

tax categories such as changing sales taxes to value-added taxes.

(11) The KoGuan Chinese Rule of Law and Principle Studies

Center of Tsinghua University was established on March 24, 2011.

Professors from prestigious Chinese Law Schools attended the

opening ceremony of the center. The aim of the KoGuan Chinese

Rule of Law and Principle Studies Center is to do basic, systematic

3 Yusuan Fa (预算法) [Budget Law] (promulgated by the Standing Comm. Nat’l People’s Cong.,

Oct. 27, 2005, effective Jan. 1, 2006), http://www.legalinfo.gov.cn/zhuanti/content/2010-

09/26/content_2298875.htm?node=25857 (last visited Jun. 27, 2011).

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2011] CHINA LAW UPDATE 377

and rescuing studies in Chinese traditional legal culture and relate it

to current legal issues in China. A Seminar on the Contemporary

Values of Chinese Traditional Culture was held afterwards. During

the seminar, professors and scholars gave lectures on the origin of

Chinese legal culture, the relationship between the rule of law and

rule of principle, as well as the effects of the tradition of rule of law

and principle on the contemporary Chinese legal system.

II. LAWS & REGULATIONS

1. Amendments to the Regulations on the Management of

Publications (Passed and effective on March 16, 2011)

The original Regulations on the Management of Publications

became effective in 2001 (hereinafter “the 2001 regulations”), and

set forth the rules for the state to administer the publications and the

importation of the publications.

The ten year period since then was marked by great change in

Chinese foreign economic activities (particularly foreign trade).

China’s accession to the WTO in November 2001 also brought

critical challenges to the original Regulations.

On April 10, 2007, the United States requested consultations with

China pursuant to WTO Dispute Settlement Understanding.4 One

of the concerns raised by the United States was the 200l Regulations,

which the U.S. claimed restricted trading rights with respect to

books, magazines, and newspapers. China lost the case in this

aspect.

Given that the 2001 Regulations on the Management of

Publications was ruled by the WTO Panel and Appellate Body as

inconsist with China’s WTO commitments and obligations,5 the new

amendments were passed on March 16, 2011 at the 147th General

Meeting of the State Council (hereinafter “the 2011 Amendments” 6)

to reflect China’s effort to implement its commitments and

obligations to the WTO.

Amendment Highlights are as below:

4 See China - Measures Affecting Trading Rights and Distribution Services for Certain

Publications and Audiovisual Entertainment Products, Request for Consultations by the United States,

WT/DS363/1, Apr. 16, 2007.

5 In order to implement the recommendations and rulings of the WTO DSB, China has to bring the

2001 Regulations on the Management of Publications and other relevant measures into consistency with

its commitments to and obligations of the WTO by March 19, 2011. See China - Measures Affecting

Trading Rights and Distribution Services for Certain Publications and Audiovisual Entertainment

Products - Agreement under Article 21.3(b) of the DSU, WT/DS363/16, July 12, 2010.

6 GuowuyuanGuan yu Xiugai Chuban Guanli Tiaoli de Juding (国务院关于修改《出版管理条

例》的决定) [ Amendments to the Regulations on the Management of

Publications],http://www.gov.cn/flfg/2011-03/19/content_1828564.htm (last visited on Jun. 27, 2011)