Professor Donald C. Clarke of George Washington University Law School (of Chinese Law Prof Blog fame) recently had his paper published, entitled, China: Creating a Legal System for a Market Economy.
The abstract describes the paper as follows:
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 is needed now is a more welcoming attitude to market-generated solutions to the gaps and other problems that will invariably exist in legislation. The state’s distrust of civil-society institutions and other bottom-up initiatives suggests, however, that this different approach will not come easily.
Professor Clarke is absolutely right. China has come a long way by passing a whole slew of really well crafted business laws, but once these laws get enacted, Beijing often becomes paralyzed and cannot seem to come out with regulations fast enough to tell China lawyers how its clients can work within the “big laws.” So instead of businesses knowing exactly what they need to do to comply, they are oftentimes left wondering when the regulations will come out and what exactly they will say. This is absolutely typical of nearly every law referenced in the abstract above and is true of the China’s new employment law as well. In other words, “what is needed now is a more welcoming attitude to market-generated solutions to the gaps and other problems that will invariably exist in legislation.”