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Socialist Legality and Legal Culture in Shanghai: A Survey of Getihu

Published online by Cambridge University Press:  18 July 2014

Pitman B. Potter
Pitman B. Potter
Affiliation:
Faculty of Law, University of British Columbia
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Abstract

This paper presents an analysis of attitudes among independent business operators (getihu) in Shanghai toward basic tenets of legal reform in the People's Republic of China. Based on a survey questionnaire administered during the summer of 1993 with the assistance of the Law Institute of the Shanghai Academy of Social Sciences, this paper suggests that the getihu are generally receptive to official norms about equality, justice, and private law relations. Despite having doubts about the efficacy of these norms, the getihu seem motivated by factors of disenfranchisement to accept them as useful in their struggle to get ahead. This suggests that the linkage between legal reform and economic development in China is not automatic, but will depend on the particular conditions of legal and economic actors. This has implications generally for the importance of local conditions in causal links between forms of private law and economic development.

Résumé

Dans cet article, l'auteur analyse l'état d'esprit des entrepreneurs indépendants (getihu) de Shanghai face aux principes qui sous-tendent la réforme juridique que vit actuellement la République populaire de Chine. Se basant sur les réponses données à un questionnaire distribué à l'été de 1993 grâce à la collaboration de l'Institut de droit de l'Académie des sciences sociales de Shanghai, l'auteur soumet que les getihu sont généralement réceptifs aux normes officielles en matière d'égalité, de justice et de relations de droit privé. Quoiqu'ils entretiennent un certain scepticisme quant à l'efficacité de ces normes, le fait qu'ils soient privés de certains droits semblent les inciter à reconnaître l'utilité de celles-ci dans leur lutte pour être à l'avant-garde. Il semble qu'on ne peut d'emblée établir un lien entre la réforme juridique et le développement économique en Chine; ce lien dépend plutôt des conditions particulières des acteurs juridiques et économiques auxquels on se réfère. Ainsi en est-il de l'importance des conditions locales dans l'analyse des liens de causalité entre les diverses formes de droit privé et le développement économique.

Type
Research Article
Information
Canadian Journal of Law and Society / La Revue Canadienne Droit et Société , Volume 9 , Issue 2 , Fall/automne 1994 , pp. 41 - 72
Copyright
Copyright © Canadian Law and Society Association 1994

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References

1. Field research for this paper was carried out during my residency at the Shanghai Academy of Social Sciences (SASS) Law Institute during June-August 1993, as well as during numerous visits between 1990 and 1992. An earlier draft of this paper was presented to the Workshop on Chinese Capitalism and Globalization of Law and Legal Practice, Madison: University of Wisconsin, 1–2 October 1993Google Scholar. My thanks to the workshop participants, including John Davis, Yves Desalay, Tahirih Lee, and David Trubek for their comments. My thanks also to Donald Clarke for his thoughts and suggestions.

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5. For those who have not reviewed my earlier work, the following discussion presents an overview of my approach to understanding legal culture.

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28. Referring to the abbeviated approval process as the “one chop shop”, Shanghai introduced new regulations in 1990 aimed at shortening the processes for project approval. See Timothy Gelatt, “New Rules for Investors” China Business Review, supra note 23 at 30.

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38. See, e.g., Keith, supra note 2 at 8ff.

39. See, e.g., Shanghai shi fa gui guizhang huibian 1949-1985 (Collection of Laws, Regulations and Rules of Shanghai Municipality 1949–1985) (Shanghai: Shanghai People's Press, 1986)Google Scholar; and Difangxing fa gui xuanbian (Compilation of Local Laws and Regulations) (Beijing: China Economy Press, 1991)Google Scholar.

40. For a more detailed discussion of these doctrinal views, see Pitman B. Potter, “Riding the Tiger”, supra note*, p. 41.

41. See Economic Contract Law, art. 5. This principle was reiterated in the revisions to the Economic Contract Law that were issued in September 1993. See “Economic Contract Law 1993” (December 1993) China Law and Practice. Also see Pitman B. Potter, ibid.

42. For discussion of agricultural contracts, see, e.g., “Gongya xian fayuan caijue yi qi hetong jiufen” (The Gongya County Court Arbitrates a Contract Dispute) Sichuan Ribao (Sichuan Daily) (10 April 1984) 3Google Scholar; “Fayuan caijue peichang sunshi” (The Court Decides That Losses Should Be Compensated) Sichuan ribao (Sichuan Daily) (18 April 1984) 3Google Scholar. For discussion of commercial contracts, see, e.g., “Nanjing zhong ji fayuan renzhen zuo hao jingji shenpan gongzuo” (The Nanjing Middle Level Court Conscientiously Does a Good Job in Economic Adjudication Work) Renmin ribao (People's Daily) (24 June 1984) 4Google Scholar.

43. Constitution of the People's Republic of China, arts. 33–34. This provision had its origins in the 1954 Constitution. See Constitution of the People's Republic of China (1954), art. 85, in Documents of the First National Congress of the People's Republic of China (Beijing: Foreign Languages Press, 1955)Google Scholar. Also see Potter, Pitman B., “Peng Zhen: Evolving Views on Party Organization and Law” in Hamrin, Carol Lee & Cheek, Timothy, eds. China's Establishment Intellectuals (Armonk, N.Y.: M. E. Sharpe, 1986) 21Google Scholar.

44. See Zhen, Peng, Report on the Draft of the Revised Constitution of the People's Republic of China (Beijing: 1982)Google Scholar and “Guanyu shehui zhuyi fazhi de ji ge wenti” (On Various Questions Concerning the Socialist Legal System), in (1980) 9 Lilun dongtai (Theoretical Trends) 18 at 21Google Scholar.

45. See Constitution of the PRC (1982), supra note 43, art. 33.

46. See General Principles of Civil Law of the People's Republic of China, trans. Jones, William C., art. 3 in (1987) 4 Review of Socialist Law 357CrossRefGoogle Scholar.

47. See ibid., art. 3.

48. See, e.g., “Nongcun chengbao jingying hu qianding de chengbao jingying hetong, shou falu baohu” (A Task Management Contract Signed by a Rural Contractor Receives Legal Safeguard) case No. 70 in Youzun, Chen, ed., Minshi jingji jinan anli jiesi (Interpretation and analysis of difficult civil and economic cases) (Huhehaote: Inner Mongolia University Press, 1990) 119Google Scholar; “Hetong dangshiren yi fang you guocuo, bing zaocheng dui fang jingji sunshi de, yingdang chengdan minshi zeren” (Where One Contract Party Is at Fault and Also Causes Economic Losses to the Other Party, It Should Bear Civil Liability) case No. 106 in Chen Youzun, ed., ibid., 187; “Lishi shang yiliu xialai de qi, qie dui zhangfu de yichan xiangyou pingdeng de jicheng chuanli” (A Wife and Concubine Left Over From History Have Equal Inheritance Rights Regarding the Legacy of the Husband) in Shaofang, Shen, ed., Minfa anli xuanbian (Compilation of Civil Cases) (Beijing: People's University Press, 1989) 222Google Scholar; and “Hefa you xiao de lizhu shou falu baohu” (A Legally Effective Will Received the Protection of Law) in Shen Shaofan, ed., ibid., 226.

49. These rights are extended as well to legal persons and foreigners. See Potter, Pitman B., “The Administrative Litigation Law of the PRC: Judicial Review and Bureaucratic Reform”, in Potter, Pitman B., ed., Domestic Law Reforms in Post-Mao China (Armonk, N.Y. & London: M.E. Sharpe, 1994) 270Google Scholar.

50. For example, the constitutional grant of legal equality is qualified by the provision that the exercise of citizens's rights and freedoms cannot infringe on the interests of the state. See Constitution of the PRC (1982), supra note 43, art. 51.

51. The Four Basic Principles, which serve currently as the official political philosophy in Deng Xiaoping's China, include the duty to uphold the leadership of the Party. See Xiaoping, Deng, “Jianchi si xiang jiben yuanze” (Uphold the Four Basic Principles” in Deng Xiaoping wenxuan (Collected Writings of Deng Xiaoping) (Beijing: People's Press, 1983) 150Google Scholar.

52. The right to strike was deleted from the 1982 Chinese Constitution. Compare Constitution of the PRC (1978) (Beijing: New China News Agency, 1978), art. 45Google Scholar, with Constitution of the PRC (1982), supra, note 43. In addition, penalties including fines, dismissal, or even criminal punishments may be imposed for “violating labor discipline”. See “Qiye zhi gong jiang cheng tiaoli” (Regulations on Reward and Punishments for Enterprise Staff and Workers) art. 11 in Laodong Renshi Bu Zhengce Yanjiu Shi (Policy Research Office of the Ministry of Labor and Personnel), ed., Zhonghua renmin gongheguo laodong fagui xuanbian (Compilation of Labor Laws and Regulations of the PRC) (Beijing: Labor and Personnel Press, 1985) 310Google Scholar.

53. See Walder, Andrew G., Communist Neo-Traditionalism: Work and Authority in Chinese Industry (Berkeley, Los Angeles & London: University of California Press, 1986)Google Scholar. Also see Nelson, James A. & Reeder, John A., “Labor Relations in China” (1985) 27:4California Management Review 13CrossRefGoogle Scholar.

54. Legal formalism may be conceived of as an approach that emphasizes doctrinal consistency and gives absolute precedence to objective performance of legal rules, institutions and processes without concern for whether the results that ensue are fair or not. For discussion of the origins and pitfalls of legal formalism, see Grey, Thomas C., “Langdell's Orthodoxy” (1983) 45 University of Pittsburgh Law Review 1Google Scholar. A related problem of formalism concerns the tendency to treat the content of law as tantamount to performance in practice. See generally, James V. Feinerman, “Economic and Legal Reform in China, 1978-91,” supra note 2, and Lubman, Stanley B., “Emerging Functions of Formal Legal Institutions in China's Modernization” in Joint Economic Committee of U.S. Congress, ed., China Under the Four Modernizations (Washington, D.C.: U.S. Government Printing Office) 235Google Scholar.

55. See “Mou xian shuini chang su mou diqu wujiaju an” (A Case Involving a Suit by a Certain County Cement Factory Against a Certain District Price Bureau” in Songnian, Ying and Jiansen, Hu, eds., Zhong wai xingzheng anli xuanping (Beijing: University of Beijing Politics and Law Press, 1989) 133Google Scholar, where the court upheld penalties against a cement factory for violation of a price control regulation, despite the fact that the applicable regulation had been widely ignored and was to be retracted less than a year later. In another case, a court reviewing the validity of certain pricing arrangements focused mainly on the formal authority of the individuals involved rather than whether any substantive harm resulted from the pricing arrangments themselves. See “Mou fuzhuangchang bu fu Gong Shang wujia chufa an” (A Case Involving a Certain Clothing Factory Refusing to Comply With a Penalty Levied by the Price Penalty Imposed by the State Administration for Industry and Commerce) in Yusheng, Gan, Shi, Qiu and Kaimin, Yang, eds., Xingzheng susong anli xuanbian (Beijing: China Economy Press, 1990) 203Google Scholar. Similarly, in a case involving findings by the State Administration for Industry and Commerce (SAIC) that private enterprises were engaging in illegal speculation (tou ji dao ba), the court focused on whether the SAIC had applied the proper regulations, and declined to address whether the SAIC's intrusion in private business activities was fair or arbitrary. See, e.g., “Mou zhibu chang tou ji dao ba an” (A Speculation Case Involving a Certain Weaving Factory) in Gan Yusheng, Qiu Shi and Yang Kaimin, eds., ibid. at 173–77 and 181–83.

56. For example, the trial of “Lin Biao-Jiang Qing clique” was deemed just, simply becauser formal procedures were used, despite the existence of substantive biases against the defendants. See A Great Trial in Chinese History (Beijing: New World Press, 1981) at 1–11Google Scholar, in which Fei Xiaotong concludes that the defendants received a just trial despite the fact that several of the judges, including Fei himself, had been persecuted by the defendants. Following the Tiananmen massacre, a major element in the government condemnation of the demonstrators was that their actions were in violation of relevant laws and regulations. See, e.g., Xitong, Chen, ”Guanyu zhizhi dongluan he pingxi fangeming baoluan de qingkuang baogao”, (Report Concerning Suppressing the Chaos and Pacifying the Counter-Revolutionary Rebellion) in Renmin Ribao (People's Daily) (7 July 1989) 2Google Scholar.

57. See, generally, Guanghui, He, “Continue to Deepen Reform by Centering on Economic Improvement and Rectification” in (1990) 2 Zhongguo jingji tizhi gaigeGoogle Scholar (Reform of the Chinese Economic Structure) translated in FBIS Daily Report: China (23 March 1990) 21Google Scholar.

58. See, generally, Zheng, Henry R., China's Civil and Commercial Law (Singapore: Butterworths Asia, 1988) at 45ffGoogle Scholar. and Potter, Pitman B., The Economic Contract Law of China: Legitimation and Contract Autonomy in the PRC (Seattle & London: University of Washington Press, 1992)Google Scholar.

59. See Economic Contract Law of the PRC, arts 2 & 5.

60. See General Principles of Civil Law, c. 2 & 3 and art. 54 Also see Epstein, Edward, “Tortious Liability for Defective Products in the People's Republic of China” in (1988) 2 Journal of Chinese Law 285Google Scholar.

61. See Economic Contract Law of the PRC, arts. 1, 4 & 7; General Principles of Civil Law, art 6. Originally this principle extended to conflicts with the state plan, but references to the plan have been dropped of late in the course of accelerated reform. See “Final Version of 14th CPC National Congress Report” in FBIS Daily Report-China (21 October 1992) 1–21 at 8Google Scholar; and “Decision of the CPC Central Committee on Issues Concerning the Establishment of a Socialist Market Economic Structure” (14 November 1993) in China Economic News, 1993 Supplement No. 12 (29 November 1993) 6–9Google Scholar. In keeping with these changes, the revised text of the Economic Contract Law issued in 1993 deleted references to state planning and replaced with references to state policies. See Economic Contract Law of the PRC (1993).

62. See Ming, Gu, “Guanyu ‘Zhonghua renmin gongheguo jingji hetong fa caoan’ de shuoming” (Explanation of the “Draft Economic Contract Law of the PRC”) Zhongguo fazhi bao (Chinese Legal System Gazette) (13 December 1981) 4Google Scholar. Also see “Zuigao renmin fayuan guanyu shenli jingji jiufen anjian juti shiyong ‘Minshi susong fa (shixing)’ de ruogan wenti de jieda” (Responses to Questions by the Supreme People's Court Concerning Several Issues in the Specific Use of the “(Draft) Civil Procedure Law” in Handling Economic Disputes) (21 July 1987) in Shouqiang, Zhang, ed., Hetong fagui yu hetong shiyang huibian, (Harbin: Heilongjiang Science and Technology Press, 198 ) 959Google Scholar.

63. See “Zhonghua renmin gongheguo minshi susong fa (Civil Procedure Law of the PRC) c. 8 in Zhonghua renmin gongheguo xin fa gui huibian, vol. 2 (Compilation of New Laws and Regulations of the PRC) (Beijing: Law Publishers, 1991) at 22Google Scholar.

64. See “Shourangfang jieshou jishu fuzhu shishi, bu dei chaoyue ziji jing Gong Shang Xingzheng Guanli Bumen hezhun dengji de shengchan jingying fanwei” (The Transferee Receives Technical Input, and Should Not Overstep Its Own Registered Scope of Production Management Received Through Examination and Ratification By the Industrial and Commercial Administration Departments), in You, Dan, ed., Jingji fa anli xuan xi (Compilation and Analysis of Economic Law Cases) (Beijing: Law Publishers, 1990) 236Google Scholar, where the court held invalid a contract which was deemed to be outside the registered scope of business of one of the parties. Formalistic approaches to enforcement that focus on capacity also reinforce doctrinal requiremants that obligations not conflict with state policies. See Economic Contract Law of the PRC, arts. 4 & 7, and General Principles of Civil Law of the PRC, arts 55 & 58.

65. See Economic Contract Law, art. 35. Also see “Zui gao renmin fayuan guanyu guanche ‘Jingji hetong fa’ ruogan wenti de yijian”, supra note 62.

66. See Economic Contract Law, art. 27(b). Also see “Tantan dui jingji hetong jiufen anjian de shenli” (Discussion of Adjudication of Cases of Economic Contracts Disputes) (1982) 6 Faxue zazhi (Legal Studies Magazine) 39Google Scholar; “Shanghai gangjichang peikuan er shi wan” (The Shanghai Harbour Machinery Factory Pays Indemnity of 200,000) Jiefang ribao (Liberation Daily) (4 March 1983) 1Google Scholar; and “Jingji anjian zhong de luchi huodong” (The Activities of Lawyers in Economic Cases) (1983) 2 Faxue yanjiu (Studies in Law) 44Google Scholar.

67. For example, in a case involving an automobile sales contract, the court held that the seller lacked legal capacity, and imposed liability on two enterprises with which the contract seller was amalgamated in order to avoid losses to the purchaser. See “Faren chengli bixu fu hefa guiding de tiaojian” (The Creation of the Juridical Person Must Comply With the Conditions of Lawful Regulations) in Suiqi, Wanget al., eds., Shiyong anli shouce, (Beijing: China Youth Press, 1990) 20Google Scholar. This was seen as preferable to declaringthe contract void, as had been done under other circumstances where a party lacked proper capacity (See ”Gai faren maiyou zuzhuang he xiaoshou qiche de quanli nengli” (This Juridical Person Lacked the Authority and Capacity to Assemble and Sell Automobiles), in Wang et al., eds., ibid., 22.

68. See, e.g., “Nanjing shi jiangpu xian gongcheng suliao chang yu ben chang chengxing chejian chengbao hetong jiufen” (The Dispute Between the Engineering Plastics Factory of Jiangpu County in Nanjing Municipality and the Factory's Mould Shop Over a Responsibility Contract) (1985) 1 Zhonghua renmin gongheguo zui gao renmin fayuan gongbao (PRC Supreme People's Court Reports), 27Google Scholar.

69. See, e.g., “300 wan yuan ju'e susong an de shenli” (The Handling of a 3,000,000 Yuan Lawsuit), in Suiqi et al., eds., supra note 67 142 and “Jiagong bianyaqi jufu jiakuan, ding zuofang yifa chang fu weiyuejin” (Upon the Manufacture of Transformers There is a Refusal to Pay the Cost, Set the Penalty Payment to Be Made as Lawful Compensate By the Person Who Did So), in Wang et al., eds., ibid., 150.

70. See, e.g., “Bu dang de li yinggai tuihuan” (Unjust Enrichment Should be Returned) in Wang et al., eds., ibid. 103 and “Yinhang dui qi gongzuo renyuan yin guocuo zaocheng ta ren sunhai ying chengdan minshi zeren” (The Bank Should Bear Liability for Harm to a Third Person Caused by Mistake by Its Employee) in ibid., 127.

71. An English translation of the questionnaire is attached as Annex A.

72. See Dora Sanders Carney, Foreign Devils Had Light Eyes, supra note 15 at vi-vii (map).

73. See Ling, Pan, In Search of Old Shanghai, (Hong Kong: Joint Publishing, 1991) at 54ffGoogle Scholar.

74. See, generally, All About Shanghai, supra note 15 at 48ff.; Pan Ling, ibid at 54–58.

75. See Sanders Carney, supra note 15 at 17ff.; All About Shanghai, ibid. at 51ff.

76. The questionnaire was administered by Professor Lin Zhe, an experienced social scientist at the SASS Law Institute according to a prepared procedure.

77. While the official exchange rate during the Summer 1993 when the survey was taken was 5.67yuan: 1 US$, the semi-official Shanghai swap centre rate hovered around 8yuan: 1 US$. For the purposes of this paper, yuan are considered to be Renminbi (RMB), not foreign exchange certificates (FEC).

78. These results appear consistent with the views supporting ideals of equality discussed in Chu, Godwin C. & Ju, Yanan, The Great Wall in Ruins: Communication and Cultural Change in China (Albany: State University of New York Press, 1993) at 239ffGoogle Scholar.

79. See discussion of submission to authority in Chu & Ju, ibid. at 233ff.

80. See Economic Contract Law of the PRC, art. 3.

81. For general discussion of the relationship between increased complexity in social relations and the role of formal norms, see Eisenstadt, S. W. & Roniger, L., Patrons, Clients and Friends interpersonal Relations and the Structure of Trust in Society (Cambridge: Cambridge University Press, 1984)CrossRefGoogle Scholar. Also see Merton, Robert K., Social Theory and Social Structure, revised and enlarged ed. (New York: Free Press, 1965)Google Scholar.

82. For a discussion of dispute resolution in Taiwan which reaches similar conclusions, see Moser, Michael J., Law and Social Change in a Chinese Community: A Case Study From Rural Taiwan (New York: Oceana, 1982)Google Scholar.