THE FUNCTION OF LEGAL TRANSPLANT IN CHINESE SOCIAL TRANSITION & LEGAL DEVELOPMENT

1. THE FUNCTION OF LEGAL TRANSPLANT IN CHINESE SOCIAL TRANSITION & LEGAL DEVELOPMENT WANG, CHENGUANG TSINGHUA UNIVERSITY LAW SCHOOL Sept., 2011

2. CONTENTS • Legal Transplant: A Question for China • Legal Transplant: A Common Pattern of Legal Development • Types and Basic Conditions of Legal Transplant • Traits and Functions of Legal Transplant in China

3. I. Legal Transplant: A Question for China It seems plausible that China, in its process of profound social transition, has used legal transplant as a powerful means to restructure and upgrade its legal system. The reasons are: • As China has a long history of its own, its legal system is deemed one of the “originals”. • China has adopted a different social and political system, insisting on “Chinese Socialist Characteristics”. • China values its sovereignty dearly.

4. I. Legal Transplant: A Question for China The practice of the past 30 years tells us that despite these doubts, legal transplant has been one of the major vehicles for China’s legal development, and has played a significant but often overlooked role in its social transition. Legal transplant—— an effective means for legal construction: • In the early 80s, after reaching the decision to set up a new legal framework for foreign investment, the Central Government ordered the embassies in major foreign countries to collect the joint venture laws from their respective domiciles. • Senior officials, such as the late Vice-Premier Li Lanqing went to Beijing University to attend the courses on foreign investment taught by foreign lawyers and professors.

5. I. Legal Transplant: A Question for China The reasons for such practices are: • The “original system” no longer exists at the institutional level, and the modern system has been introduced since the reform of the late Qing Dynasty; • Before the reform, China had an incomplete legal system; • Despite social and political differences, leaders recognized the practical need for reform and the value of the rule of law; • Using “the rule of law” to replace “rule of man”, and “governance of law” to “governance of policy”.

6. II. Legal Transplant: A Common Pattern of Legal Development A. From A Historical Perspective: • Solon and Aristotle in ancient Greece; • Law of the Twelve Tables in ancient Rome; • Transplants of Roman law and ecclesiastical law; • Legal transplant in colonial times； • Three waves of legal transplant by “law and Development” movement; • Collapse of the “socialist block”, and the pressure of economic development, globalization, and social reform further promoted the transmission of the western legal system, which is based on market economics and democracy. The UN, World Bank and Western governments delineate the rule of law as a precondition for economic aid.

7. II. Legal Transplant: A Common • Pattern of Legal Development B. From A Theoretical Perspective： • The Institutes of Justinian: Law of Nations provided the early theory of a common law for all; • Allan Watson, Rodolfo Sacco, & Esin Orucu advocate legal transplant, and consider it a common means for legal development, while recognizing “legal formant” and small impacts on the law by other social factors； • Montesquieu regards legal transplant as a coincidence. • Savigny ,Kahn-Freund and Pierre Legrand deny the feasibility of legal transplant. • Currently, more scholars recognize the function and effects of legal transplant, but subject it to the impact of other social factors as well.

8. III. Types and Basic Conditions of Legal Transplant A. Types of Legal Transplant Allan Watson: • Transplant through massive immigration into a new uncultivated territory; • Transplant through massive immigration into another society by bringing in native systems; • Voluntary acceptation of a foreign legal system. • Other forms such as imposed acceptation, selective acceptation, intrusion, filtration, etc.

9. III. Types and Basic Conditions of Legal Transplant Jonathan Miller: • The Cost-Saving Transplant: China’s foreign investment laws, CISG, intellectual property laws, accounting standards and many other technical standards. • The Externally-Dictated Transplant: In contemporary time, globalization is the powerful engine for externally dictated transplant, such as WTO, WHO, other international treaties and even bilateral treaties.

10. III. Types and Basic Conditions of Legal Transplant Jonathan Miller: • The Entrepreneurial Transplant; Voluntary acceptance by business circles. Listed companies are subject to the rules of foreign securities rules, voluntary adoption of foreign labor, technical or environmental standards, etc. • The Legitimacy-Generating Transplant; Rational transplant of foreign laws by the legislators based on the reputation and effectiveness of foreign laws and their historical impacts, such as securities law and financial law. • Mixed Types in practice. In practice, the above types never work purely in their respective frameworks.

11. III. Types and Basic Conditions of Legal Transplant B. Basic Conditions for Successful Transplant: Legal transplant has no ready guaranty for its success, but subject to certain basic conditions or creation of such conditions. • Internal motives: popular consensus by the leading elite, government, other organizations and citizens. In China the consensus is formed by the strong desire for modernization and economic and social development. • External conditions such as institutions, social behaviors, morality, economic situation, etc. If they are absent, defective or incompatible, the new system will not work as desired or will bear different results.

12. IV. Traits and Functions of Legal Transplant in China • Adaptation of the transplanted into Chinese soil; • Cannot transplant a full and unmodified system, • Insistence on Chinese characteristics and socialist system and taking transplant as a sovereign issue, • Taking a functional and practical approach, with a clear vision of solving Chinese problems, • Coordination of the transplanted with the social reality. • Selective transplant according to China’s social needs; • Pitman Potter’s concept of “selective adaptation”, • Practical & incremental method of transplant, such as: rejection of separation of powers but willingness to set up mechanics of power control, the dilemma in judicial reform (accepting judicial independence but often diluting it), etc.

13. IV. Traits and Functions of Legal Transplant in China • Open attitudes to and tolerance in legal transplant; • Deng’s view of audacious attitude and permission of failure; • Abandonment of the leftist and the cold war mentality; • Introduction of foreign concepts, such as limited government, administrative litigation, exclusion of illegal evidence, etc., while rejecting the “western political system”. • Making sure the transplanted rules and systems are compatible with the current rules and systems in promoting social development. • By way of selective and progressive transplant, • By way of creating a social environment, such as SEZs.

14. IV. Traits and Functions of Legal Transplant in China Effects of Legal Transplant in China: • As an impetus for the quick development of a brand new legal system; • Selection of the best from different systems and the creation of a mixed system; • Relatively successful reduction of the tension between the transplanted laws and the original ones; • Effective promotion of social transition and economic development through using the legal vehicle.

15. Thank You