An End to Chinese Inscrutability

By Laurence Zuckerman

An American lawyer in Beijing, Timothy Gelatt, met with Chinese officials earlier this month to discuss the taxes on a joint venture involving one of his U.S. clients. As the conversation progressed, an official suddenly - produced a document Gelatt had never seen. "I said, 'Oh, what's that?' " he recalls. The document was a ruling directly related to the taxing of joint ventures, but it had never been published openly. To foreign attorneys and many Chinese as well, the incident was typical. Says Gelatt: "We are constantly finding out by accident things that are relevant to what we're doing."

China's pragmatic leaders are taking steps to eliminate such surprises. The government announced last month that a welter of previously restricted "internal" regulations issued by the State Council, China's highest executive body, will henceforth be circulated publicly. "The publication of regulations signed by China's Premier will help people learn exactly what they are being asked to adjust to, follow or enforce," said Huang Shuhai, a deputy director of legislative affairs for the State Council. "Their legal rights and interests will also be made clearer."

The move is an important step in China's campaign to formalize the country's legal code and replace renzhi, the rule of men, with fazhi, the rule of law. Although the ancient Chinese developed a sophisticated civil service system, the prominence of law waxed and waned with the fortunes of China's Emperors. The Communists tried to install a Soviet-style system after the 1949 revolution, but the fledgling effort began to unravel during Chairman Mao's "anti-rightist" political campaign in the late 1950s. What little jurisprudence survived was virtually swept away during the tumultuous Cultural Revolution (1966-69), when lawyers were persecuted as members of "the stinking ninth category" and a Red Guard battle cry was "Smash laws into smithereens!"

Since 1978, when Deng Xiaoping came to power, instituting the rule of law has been a critical element in the drive to modernize China. The government has issued a plethora of statutes covering everything from murder to trademark infringement. The legal profession has finally regained its status. Indeed, the number of Chinese lawyers has soared from a scant 2,000 in 1980 to 25,000 today, and some 70 legal publications are in circulation.

Yet, despite guarantees in the country's 1982 constitution that "no organization or individual may enjoy the privilege of being above . . . the law," not even the Communist Party, due process is still applied capriciously. This is particularly vexing to foreign investors who, after being ardently wooed by the Chinese, arrive to discover intransigent bureaucrats and a host of previously undisclosed rules governing everything from wages to repatriation of profits. As once hidden regulations come to light, such snags should become a thing of the past, though the transition to openness may take some time. After all, says Gelatt, "freedom of information is not a hallmark of Chinese society."

With reporting by Jaime A. FlorCruz/Beijing