Annual Lecture 2003 : Development & Legal Evolution in China
His Excellency Mr Xiao Yang Chief Justice and President of the Supreme People’s Court, People’s Republic of China

The Honourable the Chief Justice Yong Pung How,
Distinguished guests, 
Ladies and Gentlemen:

1 How time flies. It was fifteen years ago that I first visited Singapore. At that time, the beauty and the prosperity of Singapore, and its strong legal and judicial system left an indelible impression on my mind. I am very pleased to meet up with my old friends in Singapore again. My colleagues and I extend our heartfelt gratitude and best wishes to the Honourable the Chief Justice Yong Pung How and all of you present today. 

2 As you all know, China is a developing country. We used to be very poor. As an ancient Chinese saying goes, “Change will be born out of the chaos of despair; prosperity will arise from the crucible of change; and stability will be secured by the endurance of prosperity." Ever since China adopted the policy of "reform and opening-up" in the late 1970s, our economy has expanded rapidly at an annual rate of over 7%. The economy has grown four times in size in the last 20 years. In 2002, the volume of China’s foreign trade reached US$620.8 billion, ranking the fifth in the world. Foreign direct investment to China exceeded US$52.7 billion, and China has replaced the United States to become the world’s largest foreign direct investment recipient for the first time. The overall economic strength of China has ascended in world ranking from the 11th place in the early 1990s to the 6th place. Our per capita GDP increased from about US$300 at the beginning of the 1980s to the current level of almost US$1,000. Most Chinese people have gotten out of poverty and are now leading a relatively well-off life. Although China still has a long way to go to reach the standards of the developed countries, we have already become one of the world’s biggest markets and boast one of the world’s most dynamic economies.

3 Today’s world is one of the rule of law. The prosperity of a nation, the integrity of its politics, the stability of its society, the development of its economy, the solidarity of its ethnic groups, the flourishing of its culture and the contentment and well-being of its people, all hinge upon the maintenance of law and order and the soundness of the legal system. China is no exception. The national strategy of a country determines its future and destiny. At the end of the 20th century, China, with our population of 1.2 billion, publicly proclaimed to the world that we would adopt the rule of law as our governance strategy. Over the years, China has made steady progress towards developing a socialist market economy and establishing the rule of law. We are in the process of honing our legal system to meet the needs and challenges of the socialist market economy; we are undertaking orderly government reforms to ensure a law-abiding administration; we are continually strengthening the reforms to our judicial system to ensure the maintenance of impartiality and efficiency; we are implementing an extensive social program in a sustainable and comprehensive manner to educate our people on the law.

4 As you know, the legal protection afforded by the Constitution is fundamental to the economic development of a country. In the early days after the founding of new China, public ownership became dominant as a result of the socialist restructuring of agriculture, the handicraft industry, capitalist industries, and commerce. Private ownership had no lawful status then. Under the planned economy, enterprises had no autonomy in respect of production and operation. Citizens were allocated salaries based on their work done with absolutely no other means of earning an income. Under such a system, China’s economy developed at a snail’s pace. In 1978, China introduced the policy of “reform and opening-up” and we gradually changed our ownership model, economic mechanisms and distribution system. In 1988, China amended the Constitution for the first time to legitimize private ownership. The Constitution was amended again in 1993 to expressly implement a socialist market economy system in China. In addition, while we kept the main distribution system of rewarding a person according to work done by him, we also allowed the introduction and co-existence of other means of income generation and wealth distribution. The evolution of China’s Constitution has boosted the development of both the public and private sectors of our economy. It has enhanced China’s economic strength, improved the lives of our people, and brought about profound changes to our political, economic and social sectors.

5 Since the "reform and opening up", the main emphasis of the work of the Chinese Government has shifted from one based on “class struggle” to one centred on “economic development.” The regulation of economic relations through law has become a major facilitator of economic development. The economic legislation process has accelerated over the years, in pace with the economy. In line with the requirements of the socialist market economy, the National People’s Congress of China and its standing committee have enacted a series of laws to promote the development of the market economy: the Company Law, Partnership Law and Sole Proprietorship Law have been promulgated to standardize and regulate the creation and dealings of business entities; the Contract Law, Law on Guarantees, Law on Negotiable Instruments, and Law on Bids and Tenders have been enacted to establish the ground rules for market transactions; the Law against Unfair Competition, Product Quality Law and Consumer Protection Law have been made to supervize and manage the market. We have also drawn up the Commercial Banking Law, Securities Law and Insurance Law in the fields of finance and insurance, and made amendments to our Patent Law, Trademark Law and Copyright Law to better protect intellectual property rights. To attract foreign investment and safeguard our economic reforms, we have enacted the Law on Chinese and Foreign Equity Joint Ventures, Law on Foreign Capital Enterprises, Maritime Law and Law on Foreign Trade. All these written laws constitute the basic legal framework for the Chinese socialist market economy. By 2010, China will have established a unique legal system for its market economy, which is compatible with the international economic order.

6 Undoubtedly, a just and fair judicial system is a major factor for economic growth. With the entrenchment of the policy of "reform and opening up", social and economic relations in China have become increasingly more complicated. In the past, Chinese courts had dealt mainly with the punishment of crimes. In the light of our economic reforms, the scope of our judicial functions has been greatly widened. The Chinese Courts now focus mainly on the regulation of civil and economic relations. The rule of law has penetrated into all areas of economic life. The justice system plays a very important role in promoting, managing, and regulating the market economy, eliminating unnecessary financial risks and safeguarding social stability.

7 In the past twenty odd years of "reform and opening up", the Chinese courts have had to deal with the constant emergence of new types of cases, and an ever-increasing number of criminal, civil and economic dispute cases. Despite this, the Chinese courts have maintained the goal of achieving equality and justice, adhered to the principles of impartiality and efficiency and upheld the principle of equality of all before the law. The courts have during this period protected the rights and interests of all litigants in the adjudication of over 50 million civil and economic dispute cases.

8 Since China’s accession to the WTO, the Supreme People’s Court of China has reviewed more than 1,200 judicial interpretations, applying the WTO principles of non-discrimination, transparency, and uniformity of the legal system. The review emphasized the openness, fairness and independence of the trial process, the existence of a comprehensive system of judicial review and the protection of the legitimate rights and interests of all parties regardless of their nationality. In addition, the administration is bound by the rules of law and local protectionism is not condoned. These measures have enhanced China’s economic development, and laid a solid foundation for our participation in international economic cooperation at a higher level, and on a wider scale.

9 Administration according to the rule of law and the enhancement of administrative law enforcement are essential to our economic development. Administrative institutions account for the lion’s share of Chinese state organs. They have the largest number of departments and the most extensive involvement in the market economy amongst all state organs. Administrative law enforcement forms the bulk of the law enforcement activities. Approximately over 80% of all laws and regulations in China are enforced by administrative institutions. Chinese administrative law has become more comprehensive with the establishment of a number of laws to regulate administrative rights. These include the Administrative Procedural Law, the Administrative Penalty Law, the Administrative Review Law and the State Compensation Law. An increasing number of administrative affairs are now handled in the context of the legal framework. Law has become the main vehicle of most Chinese government agencies to regulate and manage economic, cultural and social activities. Meanwhile, the reforms of administrative procedures, the administrative review system, administrative supervision and transparency in governance are being pursued in greater depth. Administrative law enforcement is now a major government responsibility.

10 China is a big country and suffers from frequent natural calamities. The tourism, food, transportation and many other industries of China experienced a huge setback in the first half of this year as a result of the SARS epidemic. “It never rains but pours.” Shortly after the SARS outbreak, the riparian areas along the Yangtze River and the Huaihe River incurred untold economic losses because of devastating floods. In order to tackle such natural disasters, and to ensure healthy and smooth economic development in spite of such disasters, an effective emergency management mechanism is vital. In this regard, the State Council of China issued the Provisions on Public Health Contingencies on the 9th of May, 2003, right after the SARS outbreak. The Provisions provided for the prevention and preparation, reporting and broadcasting of information, emergency procedures and legal responsibilities in relation to public health emergencies. They played a crucial role in controlling the SARS epidemic. As a result, the impact of SARS on the Chinese economy was contained at a relatively low level and China managed to achieve a comparatively high growth rate in the first half of the year despite the epidemic.

11 To promote economic growth, it is essential that the public abide by the rule of law and observe the “rules of the games” in the market place. Law, legal culture, and jurisprudence are all closely linked with economic development. It has been widely acknowledged that Singaporeans have a high level of legal awareness, as well as a strong concept of what the rule of law means. China has drawn upon the useful experience of countries throughout the world, including Singapore, and has spared no efforts in strengthening our legal education program. We aim to cultivate the awareness of democracy, and the concepts of law and rights of our citizens. We seek to foster the civic consciousness of our citizens, and to build an ethical and law-abiding society. Our people have been urged to undertake their responsibility as the masters of our society to supervize the government and civil servants in the performance of their duties and to ensure that civil servants act in accordance with the rules and characteristics of a market economy. Since 1985, China has had four five-year campaigns to bring legal education to the ordinary citizens. 750 million people have since received training on common legal knowledge regarding the market economy. These public education programs have played an invaluable role in raising awareness of the law, and protecting the legitimate rights and interests of our citizens. This has helped in the development, maintenance, and smooth functioning of the market economy.

12 To conclude, the development of the legal system of China is premised upon the basic principles that there must be a just and sound legal framework, where laws are obeyed and strictly enforced, and law-breakers are held accountable for their actions. A sound legislature, an impartial judiciary, a strict legal enforcement agency and a law-abiding public all contribute to the integrity of the legal system. They are the corner stone of the sustained and successful development of the market economy in China.

13 Ladies and gentlemen, I hope this brief introduction to China’s economic development and legal evolution has helped you to understand my country. Let me conclude by sincerely inviting all of you to visit China to witness, at first-hand, the vast changes that have swept—and which are continuing to sweep— my country and my people.

14 Thank you!