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Laws on Paper vs. Law in Practice

Stanley Lubman, a long-time specialist on Chinese law, is a Distinguished Lecturer in Residence at the University of California, Berkeley, School of Law and is the author of “Bird in a Cage: Legal Reform in China After Mao,” (Stanford University Press, 1999). China has enacted 240 laws, 706 administrative regulations, and over 8,600 local regulations since August 2011, according to the latest official government review of China’s legal system. But what do these add up to in practice? A white paper issued by the State Council on last month pays too much attention to laws on paper, while slighting meaningful discussion of how the legal system actually works—or doesn’t. Tracing legislation since the People’s Republic was established, especially since 1978, the State Council’s lengthy review does reflect the extraordinary progress of post-Mao China. It cites successive Constitutions and important laws among the legislative flood that within the short span of 30 years has produced the framework for the “socialist market economy” and all the branches of the modern Chinese state. The document celebrates the creation of a ”socialist system of laws with Chinese characteristics,” which is hailed as having established the “legal foundation for economic, political, cultural and social development.” Knowledgeable observers will have difficulty recognizing some aspects of the system that is described. For example, the white paper claims that China has developed “a comparatively complete legal system to protect human rights” – a statement contradicted by the country’s continuing repression of dissent and heightened censorship of the media, and by an ongoing assault on lawyers who lawfully assert their clients’ rights. Rather than dissecting obviously questionable claims, however, a hard look at what the document omits yields useful insight into China’s legal system. One message that is conspicuously muted is the need to resist interference with the independence of decision-making by the courts and procuracy. The white paper states that the courts and procuracy exercise their power “independently,” which is flatly not the case. An editorial published in the state-run China Daily after the white paper was issued shares the celebratory tone of the document, but adds a note of caution: ….just as the white paper has observed, having laws alone does not mean rule of law. More needs to be done in order to add teeth to our laws. The judiciary must be divested from departmental and local interests. And those in positions of power, no matter institutions or individuals, must set the right example. None other than Wen Jiabao, China’s Premier, has called for an independent judiciary in stronger language than is used in the latest document. In an interview at the World Economic Forum in Geneva in September of this year, Premier Wen said: “We need to uphold judicial justice. Procuratorial and judicial authorities should keep their due independence and be free from interference by any administrative organ, social group or individual.” In a speech at the same conference, Wen elaborated further on the point. “The most important mission of a ruling party is to abide by and act in strict accordance with the Constitution and the laws,” he said. “The Party should not replace the government in governance, and problems of absolute power and overconcentration of power should be redressed.” This last statement was interpreted by one knowledgeable foreign observer, Elizabeth Economy, as meaning that “the Party does not act according to the Constitution; and the Party abuses its power.” The white paper also underemphasizes the endemic instances of poor law enforcement or nonenforcement of the very laws whose existence it celebrates, though it does acknowledge the issue: The vitality of laws lies in their enforcement. …Now, the problem of ensuring that laws are observed and strictly enforced and that lawbreakers are prosecuted has become more pronounced and pressing. Therefore, China will take active and effective steps to guarantee the effective enforcement of the Constitution and laws, and accelerate the advance of the rule of law and the building of a socialist country under the rule of law. One example of this problem appeared in a report on food safety in the China Daily the day before the white paper was published. The State Council cited the Food Safety Law as an example of laws enacted “to protect the people’s health and safety,” but the China Daily article, consistent with other reports of poor product safety that appear almost daily in the Chinese media, told of farmers adding a harmful chemical to food given to sheep. The report went on to quote a researcher at the China Animal Agricultural Association as saying that local officials “always try to conceal their malpractice when such food safety issues are exposed because it is their dereliction that partly caused such problems.” Conspicuously absent from the white paper is any discussion of conflicts between laws and the policies that force local governments to chose between them. For example, on the day the white paper was published, the China Daily carried a story about pressures on to “drive up” local GDP. It said that local governments may “gobble up land for economic development” resulting in “illegal land use” that “may become rampant.” Examples included “illegally permitting projects like golf courses, railways and industrial parks to attract investment.” (In 2004, the State Council issued a notice to suspend construction of new golf courses, but since then more than 400 golf courses have been constructed across the country.) The white paper is not completely devoid of comments on the relation between law and society, acknowledging in a passage near the bottom that law must evolve: Social practice is the foundation of laws, and laws encapsulate practical experience. Social practice is endless, and legislative work should also constantly move forward with the times. Building socialism with Chinese characteristics is a long-term historic task. Improving the socialist system of laws with Chinese characteristics is also a long-term and arduous historic task, and it must advance in tandem with the practice of socialism with Chinese characteristics. By preceding the change of leadership next year, this document could mark a pause in legislative activity. Since the next leaders have not yet been officially chosen, their agenda is unknown. Given the problems unmentioned in the white paper that have been noted here, more attention should be placed on how laws are implemented as on what they say. What is necessary – someday– is a shift from using law as a political tool to promoting it as a force in Chinese society more distinct from Party policy. That, however, depends on the leadership’s willingness to endow laws with greater significance than they have today. The task is challenging, but vital for China’s governance.

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Stanley Lubman, a long-time specialist on Chinese law, is a Distinguished Lecturer in Residence at the University of California, Berkeley, School of Law and is the author of “Bird in a Cage: Legal Reform in China After Mao,” (Stanford University Press, 1999). China has enacted 240 laws, 706 administrative regulations, and over 8,600 local regulations since August 2011, according to the latest official government review of China’s legal system. But what do these add up to in practice? A white paper issued by the State Council on last month pays too much attention to laws on paper, while slighting meaningful discussion of how the legal system actually works—or doesn’t. Tracing legislation since the People’s Republic was established, especially since 1978, the State Council’s lengthy review does reflect the extraordinary progress of post-Mao China. It cites successive Constitutions and important laws among the legislative flood that within the short span of 30 years has produced the framework for the “socialist market economy” and all the branches of the modern Chinese state. The document celebrates the creation of a ”socialist system of laws with Chinese characteristics,” which is hailed as having established the “legal foundation for economic, political, cultural and social development.” Knowledgeable observers will have difficulty recognizing some aspects of the system that is described. For example, the white paper claims that China has developed “a comparatively complete legal system to protect human rights” – a statement contradicted by the country’s continuing repression of dissent and heightened censorship of the media, and by an ongoing assault on lawyers who lawfully assert their clients’ rights. Rather than dissecting obviously questionable claims, however, a hard look at what the document omits yields useful insight into China’s legal system. One message that is conspicuously muted is the need to resist interference with the independence of decision-making by the courts and procuracy. The white paper states that the courts and procuracy exercise their power “independently,” which is flatly not the case. An editorial published in the state-run China Daily after the white paper was issued shares the celebratory tone of the document, but adds a note of caution: ….just as the white paper has observed, having laws alone does not mean rule of law. More needs to be done in order to add teeth to our laws. The judiciary must be divested from departmental and local interests. And those in positions of power, no matter institutions or individuals, must set the right example. None other than Wen Jiabao, China’s Premier, has called for an independent judiciary in stronger language than is used in the latest document. In an interview at the World Economic Forum in Geneva in September of this year, Premier Wen said: “We need to uphold judicial justice. Procuratorial and judicial authorities should keep their due independence and be free from interference by any administrative organ, social group or individual.” In a speech at the same conference, Wen elaborated further on the point. “The most important mission of a ruling party is to abide by and act in strict accordance with the Constitution and the laws,” he said. “The Party should not replace the government in governance, and problems of absolute power and overconcentration of power should be redressed.” This last statement was interpreted by one knowledgeable foreign observer, Elizabeth Economy, as meaning that “the Party does not act according to the Constitution; and the Party abuses its power.” The white paper also underemphasizes the endemic instances of poor law enforcement or nonenforcement of the very laws whose existence it celebrates, though it does acknowledge the issue: The vitality of laws lies in their enforcement. …Now, the problem of ensuring that laws are observed and strictly enforced and that lawbreakers are prosecuted has become more pronounced and pressing. Therefore, China will take active and effective steps to guarantee the effective enforcement of the Constitution and laws, and accelerate the advance of the rule of law and the building of a socialist country under the rule of law. One example of this problem appeared in a report on food safety in the China Daily the day before the white paper was published. The State Council cited the Food Safety Law as an example of laws enacted “to protect the people’s health and safety,” but the China Daily article, consistent with other reports of poor product safety that appear almost daily in the Chinese media, told of farmers adding a harmful chemical to food given to sheep. The report went on to quote a researcher at the China Animal Agricultural Association as saying that local officials “always try to conceal their malpractice when such food safety issues are exposed because it is their dereliction that partly caused such problems.” Conspicuously absent from the white paper is any discussion of conflicts between laws and the policies that force local governments to chose between them. For example, on the day the white paper was published, the China Daily carried a story about pressures on to “drive up” local GDP. It said that local governments may “gobble up land for economic development” resulting in “illegal land use” that “may become rampant.” Examples included “illegally permitting projects like golf courses, railways and industrial parks to attract investment.” (In 2004, the State Council issued a notice to suspend construction of new golf courses, but since then more than 400 golf courses have been constructed across the country.) The white paper is not completely devoid of comments on the relation between law and society, acknowledging in a passage near the bottom that law must evolve: Social practice is the foundation of laws, and laws encapsulate practical experience. Social practice is endless, and legislative work should also constantly move forward with the times. Building socialism with Chinese characteristics is a long-term historic task. Improving the socialist system of laws with Chinese characteristics is also a long-term and arduous historic task, and it must advance in tandem with the practice of socialism with Chinese characteristics. By preceding the change of leadership next year, this document could mark a pause in legislative activity. Since the next leaders have not yet been officially chosen, their agenda is unknown. Given the problems unmentioned in the white paper that have been noted here, more attention should be placed on how laws are implemented as on what they say. What is necessary – someday– is a shift from using law as a political tool to promoting it as a force in Chinese society more distinct from Party policy. That, however, depends on the leadership’s willingness to endow laws with greater significance than they have today. The task is challenging, but vital for China’s governance.

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Laws on Paper vs. Law in Practice

Business

China’s Golden Rooster Film Festival Kicks Off in Xiamen – Thailand Business News

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The 2024 China Golden Rooster Hundred Flowers Film Festival opens

The 2024 China Golden Rooster and Hundred Flowers Film Festival began in Xiamen on Nov 13, featuring awards, cultural projects worth 31.63 billion yuan, and fostering international film collaborations.


2024 China Golden Rooster and Hundred Flowers Film Festival Opens

The 2024 China Golden Rooster and Hundred Flowers Film Festival commenced in Xiamen, Fujian province, on November 13. This prestigious event showcases the top film awards in China and spans four days, concluding with the China Golden Rooster Awards ceremony on November 16.

The festival features various film exhibitions, including the Golden Rooster Mainland Film Section and the Golden Rooster International Film Section. These showcases aim to highlight the achievements of Chinese-language films and foster global cultural exchanges within the film industry.

On the festival’s opening day, a significant milestone was reached with the signing of 175 cultural and film projects, valued at 31.63 billion yuan ($4.36 billion). Additionally, the International Film and Television Copyright Service Platform was launched, furthering the globalization of Chinese film and television properties.

Source : China’s Golden Rooster film festival opens in Xiamen – Thailand Business News

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China

Italy and China New DTA Set to Take Effect in 2025: Important Changes and Implications

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Italy ratified an upgraded Double Tax Agreement (DTA) with China, effective in 2025, to reduce tax burdens, prevent evasion, and enhance investment. The DTA introduces modern provisions aligned with international standards, targeting tax avoidance and improving dispute resolution for Italian businesses.


Italy recently ratified the upgraded Double Tax Agreement (DTA), which will finally take effect in 2025. This agreement was signed in 2019 and was designed to reduce tax burdens, prevent tax evasion, and promote Italian investment in China.

On November 5, 2024, Italy’s Chamber of Deputies gave final approval to the ratification of the 2019 Double Tax Agreement (DTA) between Italy and China (hereinafter, referred to as the “new DTA”).

Set to take effect in 2025, the new DTA is aimed at eliminating double taxation on income, preventing tax evasion, and creating a more favorable environment for Italian businesses operating in China.

The ratification bill for the new DTA consists of four articles, with Article 3 detailing the financial provisions. Starting in 2025, the implementation costs of the agreement are estimated at €10.86 million (US$11.49 million) annually. These costs will be covered by a reduction in the special current expenditure fund allocated in the Italian Ministry of Economy’s 2024 budget, partially drawing from the reserve for the Italian Ministry of Foreign Affairs.

During the parliamentary debate, Deputy Foreign Minister Edmondo Cirielli emphasized the new DTA’s strategic importance, noting that the agreement redefines Italy’s economic and financial framework with China. Cirielli highlighted that the DTA not only strengthens relations with the Chinese government but also supports Italian businesses, which face increasing competition as other European countries have already established double taxation agreements with China. This ratification, therefore, is part of a broader series of diplomatic and economic engagements, leading up to a forthcoming visit by the President of the Italian Republic to China, underscoring Italy’s commitment to fostering bilateral relations and supporting its businesses in China’s complex market landscape.

The newly signed DTA between Italy and China, introduces several modernized provisions aligned with international tax frameworks. Replacing the 1986 DTA, the agreement adopts measures from the OECD/G20 Base Erosion and Profit Shifting (BEPS) Project and the OECD Multilateral Instrument (MLI), targeting tax avoidance and improving dispute resolution.

The Principal Purpose Test (PPT) clause, inspired by BEPS, is one of the central updates in the new DTA, working to prevent treaty abuse. This clause allows tax benefits to be denied if one of the primary purposes of a transaction or arrangement was to gain a tax advantage, a move to counter tax evasion through treaty-shopping.


This article was first published by China Briefing , which is produced by Dezan Shira & Associates. The firm assists foreign investors throughout Asia from offices across the world, including in in ChinaHong KongVietnamSingapore, and India . Readers may write to info@dezshira.com for more support.

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Business

China’s New Home Prices Stabilize After 17-Month Decline Following Support Measures

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China’s new home prices fell for the 17th month in October, declining 0.5% from September, but slowing, indicating potential market stabilization amid supportive measures. Second-hand home prices showed mixed trends.


Decline in China’s Home Prices Stabilizes

China’s new home prices continued to decline in October for the 17th consecutive month, although the drop showed signs of slowing. Recent support measures from Beijing appear to be inching the market toward stabilization, as evidenced by a lighter decline compared to earlier months.

Monthly and Yearly Comparisons

According to the latest data from the National Bureau of Statistics, new home prices across 70 mainland cities fell by 0.5% from September, marking the smallest decrease in seven months. Year-on-year, prices dropped by 6.2%, slightly worse than the September decline of 6.1%. In tier-1 cities like Beijing and Shanghai, prices decreased by 0.2%, a smaller fall than 0.5% in the previous month.

Second-Hand Home Market Trends

Second-hand home prices in tier-1 cities experienced a 0.4% increase in October, reversing a 13-month downward trend. Conversely, tier-2 cities observed a 0.4% drop in second-hand prices, while tier-3 cities faced a similar 0.5% decline. Overall, recent trends indicate a potential stabilization in China’s property market.

Source : China’s new home prices slow 17-month decline after support measures kick in

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