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Bringing the Law up to Code

After decades of attempts, China has finally signed off on its first comprehensive Civil Code, which aims at better protecting private property and interests

By NewsChina Updated Aug.1

On May 28, the National People’s Congress (NPC), China’s legislature, approved the country’s first comprehensive Civil Code during its annual session. The Civil Code is aimed at strengthening legal protection for Chinese citizens, especially in the areas of private property and privacy rights, as well as shoring up private sector confidence.  

Seen by many Chinese legal experts as a cornerstone for legal reform, the new Civil Code has 1,260 articles and seven chapters. These cover general provisions, and six sections on property, contracts, personality rights, marriage and family, as well as inheritance and tort liability.  

Considered as an “encyclopedia of people’s lives,” a civil code is a law covering the private sphere which, after a nation’s constitution, is a key component of a modern legal system. China’s efforts to enact a civil code can be traced back to the mid-1950s, a few years after the People’s Republic of China was established in 1949.  

Using the civil code of the former Soviet Union enacted in 1922 as a model, a draft was finished in late 1956. But political turmoil in the late 1950s soon put the legislation on the backburner. Although another draft of a civil code was made in 1964, it was abandoned when China descended into chaos and unrest during the Cultural Revolution (1966-1976). 

According to Wang Liming, an expert in civil law and the Vice President of the Renmin University of China in Beijing, the absence of a civil code during the pre-reform era of the planned economy was because there was no market economy. “Back then, people simply didn’t have much private property, so a civil code was irrelevant,” Wang said.  

Reform Push
When China started its reform and opening-up policy in the late 1970s, civil code legislation was back on the agenda. As the work to draft the code dragged on from 1979 to 1982, it met strong resistance from conservatives. “As China tried to transform from a planned economy to a market economy, every step was difficult,” said Meng Qiang, a law professor at the Beijing Institute of Technology.  

Eventually, a compromise was struck. Instead of launching a civil code package, authorities took a piecemeal approach to first enact separate legislation on specific issues. “The rationale was the same as the overall approach China took regarding its reform and opening-up policy, known as ‘wading the river by groping for stones,’” said Jiang Ping, a well-known jurist, who served as vice-director of the Standing Committee and the Legal Committee of the NPC during the period. 

Under this approach, Chinese lawmakers enacted the General Principles of the Civil Law in 1986, which laid the rudimentary foundations for protecting civil rights. In the following years, other laws were enacted on individual issues, including a product quality law in 1993, a contract law in 1999, an intellectual property protection law in 2003 and a property rights law in 2007.  

During this period, civil law was discussed in 2002, but once again went nowhere. It was not until 2014, when China’s current leadership assumed power and highlighted the importance of establishing a complete legal system, that enacting a civil law was once again listed as a priority. In 2017, lawmakers approved the General Provisions of the Civil Law, paving the way for a full-fledged civil code. Then, in December 2019, a civil code draft was finally submitted to the NPC.  

Significant Step  
Those unfamiliar with the historical development of China’s legal system may find it hard to grasp the significance of the Civil Code, especially as it appears to be an amalgamation of existing law.  

According to Sun Xianzhong, a civil law scholar and an NPC deputy who participated in the drafting of the Civil Code, it is a significant development in both the symbolic and empirical sense.  

Symbolically, it marks the end of an era, before which China had no comprehensive civil law, which is deemed the “civil constitution” of a modern society. Empirically, the Civil Code will improve the protection of people’s civil rights, Sun said. 

“China’s existing civil laws are not only fragmented, but were enacted in different periods and follow different approaches which can conflict with each other,” said Wang Liming.  

Wang told NewsChina that in practice, a business dispute can be subject to the jurisdiction of different laws at the same time. A dispute on a retail purchase can be subject to the law on protection of consumer rights and interests, contract law and tort law at the same time.  

“Different courts can apply different laws to similar cases, which led to completely different rulings. This led to confusion among consumers and business owners,” Wang said. With the new Civil Code, which incorporates existing civil laws, courts now finally have the same legal document on which to base their rulings. 

Better Protection
Besides streamlining existing laws, the new Civil Code also clarifies other major legal issues of public concern. On the relationship between the private and the State economy, the Civil Code clearly states that there is equal protection of the rights of the State, collectives, private persons, and other rights figures.  

It is the first time the principle of equal protection has been written into national legislation, which experts believe reflects a strong political will coming from the top of the need to protect private property rights.  

Regarding land rights for urban residents, the law explicitly stipulates that homeowners’ rights to the land under their residences will be automatically extended after the lease of the land expires, a guarantee that China’s new generation of property owners had been waiting for. 
Under China’s law, all land designated as urban is owned by the State. Homeowners in China own their actual dwellings, but the land underneath is only leased to developers and homeowners, typically for 70 years.  

As the leases of some of homes developed in the early years are about to expire, there was speculation that homeowners would be required to pay a hefty fee to extend the lease on their own home. The new Civil Code has provided peace of mind for millions of homeowners.  

Regarding rural land rights, the new Civil Code clarifies that farmers have the right to transfer land use rights to other people. Under Chinese law, rural land is owned collectively by a rural community, which are then contracted to individual rural households, typically for 30 years.  

Given the demographic changes in rural regions as many rural dwellers have moved to cities for work, China allowed farmers to trade land use rights without transferring the land ownership to promote agricultural development. Experts believe that the new Civil Code marks the official legal recognition of the separation of the ownership rights, contract rights and management rights, paving the way to free up the rural land market. 

Other than land rights, the new Civil Code devotes a whole chapter to the issue of personality rights, sometimes known as the right of publicity, a move applauded by many legal experts as a major breakthrough.  

The law outlines that people have the rights to their name, title, portrait, reputation and privacy. It also adds new articles on protecting personal information, including personal emails, travel history and biometric information.  

Other major highlights of the Civil Code include the recognition of fetal rights, a 30-day cooling-off period after a couple files for divorce, and the separation of the rights of property occupation and ownership to protect the rights of renters, the elderly and vulnerable people. In the environmental sphere, it states that those causing suspected ecological destruction, in addition to environmental pollution, are liable to be sued.  

According to Wang Liming, the Civil Code, which comes into effect on January 1, 2021, will be significant in responding to the rapid changes China has encountered in recent decades.