Legal System

China’s legal system has improved significantly since opening up began in the late 1970s. When the People’s Republic of China was founded in 1949, its new government claimed to establish a new legal system for the whole people. However, the Chinese Communist Party’s internal political movement during the first 30 years of the PRC interrupted the drafting of new laws. For instance, during the Cultural Revolution from 1966 to 1976, there was a legal vacuum in China as its law enforcement agencies were smashed. Judges and lawyers either changed their professions or were sent to the countryside for ‘re-education’. Drafting of new laws and establishing the legal system were only re-started after the end of the Cultural Revolution.

China’s legal system is closer to a Civil Law System than a Common Law System as its creative law-marking is undertaken by legislature, not by judges. In the past few decades many pieces of law have been enacted covering contract, labor, intellectual property, foreign exchange control, customs, taxation, banking etc. Chinese people are relying more and more on laws to govern their civil and commercial activities as legal concepts become more understood. Before the economic and legal reforms, individual Chinese people were not allowed to engage in commercial activities such as opening their own business or selling their own hand made or home grown products directly in the market. Nowadays, enacted legislation, courts, arbitration commissions and private law firms play dominant roles in resolving civil and commercial disputes in China.