Chinese Law Prof Blog

Editor: Donald C. Clarke
George Washington University Law School

Friday, April 22, 2016

White Paper on Judicial Reform

Last March, the Supreme People's Court posted on its website an English version of its White Paper on Judicial Reform, but for some reason did not make the original Chinese version available online. I now have a scanned version of the original Chinese text; it's available here.

April 22, 2016 in Books, Commentary, News - Chinese Law | Permalink | Comments (0)

Friday, March 25, 2016

China-related jobs with PILnet (Global Network for Public Interest Law)

I have received the following announcement (slightly edited):

PILnet is hiring!  We’re currently seeking applications for a China-based Program Manager, located in either Beijing or Hong Kong, and a Program Assistant in Beijing. While legal training and experience is preferred, given that we work across sectors and are increasingly engaging in supply chain interventions (a.k.a. developing new models of CSR that involve law and community stakeholders), applications from professionals of varied backgrounds is encouraged. 

Links to both positions are copied below. 

Program Manager:

http://www.chinadevelopmentbrief.org.cn/hire-20640.html (updated version here)

Program and Administrative Assistant:

http://www.chinadevelopmentbrief.org.cn/hire-20422.html?from=timeline&isappinstalled=0

 

 

March 25, 2016 in Internships/Employment Opportunities | Permalink | Comments (0)

Tuesday, March 22, 2016

Again on China's acquittal rate

Here’s an interesting piece from the Dui Hua Foundation on China’s acquittal rate (previously discussed on this blog here). I’m not sure it’s accurate in saying that China’s acquittal rate rose, though. It gives a figure of 1039 acquittals in 2015, which is the number provided in the SPC Work Report, but says this yields an acquittal rate of 0.075%. There are two problems with this:

  1. The SPC Work Report lists a total of 1.232 million people convicted in the first instance. That would yield an acquittal rate of 0.084%. Of course, 1.232 million first-instance convictions + acquittals is not really the right denominator here; we want to know all final convictions + acquittals, but the SPC Work Report doesn’t seem to have that number. An acquittal rate of 0.075% implies an overall number of final convictions + acquittals of 1,384,294, implying total final convictions of 1,384,294 – 1039 = 1,383,255. But I don’t see where this number or an approximation of it appears in the Work Report. Did I miss it?
  2. More than a third of the total acquittals were on self-prosecuted cases. There is every reason to believe that the acquittal rate for cases brought by the procuracy would be way lower, so they shouldn’t be mixed together.
  3. To know whether the acquittal rate rose, we’d have to (a) figure out the answers to the above questions, (b) figure them out for previous years, and (c) satisfy ourselves that any change, given the extremely small numbers, is more than a meaningless statistical blip.

March 22, 2016 in Commentary | Permalink | Comments (0)

Monday, March 7, 2016

Position available at Amnesty International, Hong Kong (deadline: March 13th)

Amnesty International has an opening for an IAR (Individuals At Risk) Campaigner in their Hong Kong office. Presumably this position is mainly about China. According to my friend at AI, "it's a great job, in Hong Kong, playing to Amnesty's core strength and unique role: campaigning on behalf of individuals. It's also reasonably well-paid, includes a good health insurance and pension plan." The salary is HKD 477,191 (US$61,451) and the closing date is March 13 - very soon!

Here's the announcement: https://careers.amnesty.org/vacancy/individuals-at-risk-campaigner-1466/1492/description/

 

March 7, 2016 in Internships/Employment Opportunities | Permalink | Comments (0)

Wednesday, March 2, 2016

Interesting study of patent litigation in China: is the conventional wisdom about protectionism wrong?

Here’s a very interesting new paper on patent litigation in China based on an analysis of 471 suits for patent infringement (Love, Helmers & Eberhardt, Patent Litigation in China: Protecting Rights or the Local Economy?). The authors aim to subject to empirical analysis (which they say, to the best of my knowledge correctly [UPDATE Mar. 10, 2016: I'm wrong. See Mark Cohen's blog post on this.], is virtually non-existent to date) the conventional wisdom that the system is biased, probably deliberately, against foreign patent-holders and they can’t get a fair shake. They conclude that the conventional wisdom is wrong:

Though many suggest China set out to create a system that would benefit domestic industry at the expense of foreign firms, our findings suggest that the system has accomplished the opposite. Contrary to conventional wisdom and high-profile anecdotes, foreign litigants in Chinese patent suits play the role of patentee more often than defendant and fare just as well in their suits as privately owned Chinese firms. Moreover, state-owned monopolies—parties the Chinese government presumably has the greatest incentive to protect—rarely sue and, when sued, lose a significant share of their cases.

On the whole, our findings suggest that the Western technology community may have been too quick to write off the Chinese patent system as a rigged game. To the extent that Chinese authorities sought to establish a protectionist system, they appear to be failing. Rather, they seem to have opened the door for foreign innovators to seek redress against local copyists. Industries that have long accused Chinese firms of idea theft may be well advised to take a peek inside.

I think this is a valuable paper that deserves wide circulation—we should always welcome careful empirical work that challenges conventional wisdom—but I think the authors don’t adequately explore the implications of a key methodological problem: that the population of cases they study is not representative of the population of patent disputes and is subject to selection bias. They look only at cases that go all the way to judgment; they don’t have access to cases that settle, they don’t have access to cases where a plaintiff brings suit but the court refuses to docket the case, and of course they don’t have access to cases that never become cases at all because the plaintiff is convinced (rightly or wrongly) that it will lose and so doesn’t bother suing, or the defendant is convinced that it will lose, and so folds immediately upon receiving a threatening letter from the potential plaintiff. For those interested, the selection bias involved in studying reported cases is modeled and analyzed in a classic paper by Priest and Klein, The Selection of Disputes for Litigation (1984).

They acknowledge this problem in a footnote at the end, but seem to overlook it in the main text when stating their conclusions about what their study shows. For example, they state, “when foreign companies sue, they win relatively frequently . . .” One simply cannot say even that, based on this data, since it’s possible that 99% of foreign suits are never accepted by courts, or are ultimately dismissed before judgment for some reason. (Of course, that’s unlikely, but the point is that there is no way to know from this data what the percentage is, and it’s an important number.)

They also say, “the case-level data suggests that patent suits are rarely litigated in smaller inland cities where, conventional wisdom holds, protectionism is most often encountered.” But this result is consistent with the conventional wisdom being absolutely right, and known to be right by non-local patent holders, who therefore don’t bother bringing suit in such cities, or if they do bring suit, find such suits rejected before judgment by local courts.

There are some areas where this methodological problem might be less acute. For example, the authors find that “successful foreign patentees received a median damages award of 100,000 RMB in suits against private Chinese firms, exactly the same amount that private Chinese patentees received when they sued private domestic parties. Interestingly, Chinese patentees received 20 percent less in suits against foreign companies and 60 percent more in suits against state monopolies.” Those with more mathematical sophistication than me can think about whether my intuition is correct that award size might be less susceptible to selection bias than win rates.

In any case, to the extent one can say anything from a study of reported judgments, this study says something new and interesting and adds something valuable to our knowledge.

March 2, 2016 in Commentary | Permalink | Comments (0)

Tuesday, March 1, 2016

New web address for Chinese court judgments site

The official web site for court judgments, 中国裁判文书网, has changed its URL from http://www.court.gov.cn/zgcpwsw/ to http://wenshu.court.gov.cn/. Thoughtfully, they have neither installed an auto-redirect at the old web site nor even provided information about the new web address.

 

March 1, 2016 in Commentary, News - Chinese Law | Permalink | Comments (0)

Sunday, February 28, 2016

China's criminal conviction rate stays high

According to this report from Caixin, in 2014 the percentage of not-guilty verdicts was 0.066%, or fewer than 6 in 10,000. (Figures for 2015 are incomplete.) The report cites figures for other countries, including 2% in Finland, 9% in the US, and a whopping 25% in Russia.

I last blogged about this almost ten years ago, and as far as I know the situation is still pretty much the same:

Without information on what kind of cases are brought to trial - information that only in-depth fieldwork would reveal - it's hard to know what to make of this number. It is theoretically possible that doubtful cases are never brought to trial, although recent well publicized cases of miscarriages of justice (for example, here and here) make that hypothesis a bit implausible. But just how implausible is impossible to say.

Moreover, there is no particular reason why China should look like the US - and in any case, I'd want to know more about where that number for the US came from, given the complexity of the US legal system with its state and federal courts. Still, one can say a few things with a reasonable degree of certainty:

  1. Guilt is obviously not really being determined in any serious way at the trial state. Therefore, either the Chinese system railroads suspects, or it makes a good-faith determination of guilt before the trial so that the non-guilty never get that far. If the latter, then a criminal procedure system that doesn't give suspects full rights to a defense at that critical pre-trial stage is inadequate.  And one must say that there are lots of cases that make one wonder how careful investigators are in their pre-trial investigation.
  2. A high acquittal rate, such as we see in Russia (if it's really that high) would be evidence that judges and prosecutors aren't in bed together. A low acquittal rate is not evidence that they are, since again it could be that prosecutors are really, really careful, but it's consistent with that hypothesis.

February 28, 2016 in News - Chinese Law | Permalink | Comments (0)

Saturday, January 23, 2016

Cornell Law School seeks Clarke Program Fellow (no relation)

Thursday, January 21, 2016

2016 PILNet fellowship available for applicants from mainland China (and other places, of course)

Seth Gurgel at PILNet just circulated this email to the Chinalaw list. I'm attaching the materials he refers to here (Call for Applications) and here (Chinese version).

Attached, please find information regarding the 2016 PILnet Fellowship Program—a unique program at Columbia University School of Law specifically designed for international public interest advocates. PILnet: The Global Network of Public Interest Law, is an international nonprofit organization that works to advance public interest law around the world by supporting organizations, programs and individuals involved in delivering justice and protecting human rights. One key aspect of our programming is the PILnet Fellowship Program, now in its 19th year, which targets future leaders in various fields of public interest advocacy.
 
PILnet is now accepting applications for the 2016-2017 PILnet Fellowship from candidates in mainland China, in addition to other developing countries. This Fellowship will cover eight months of study and practical experience in New York, during which time Fellows will develop a project designed to further the rule of law in their home countries. The Fellowship begins with a semester of study at Columbia University School of Law and a series of professional development trainings. In the spring, the PILnet Fellows will participate in study visits to various cities in the U.S. and Europe, as well as two-month internships at New York-based public interest law organizations. Fellows return to their home countries after the Fellowship with the aim of implementing the rule of law project they developed during the Fellowship.
 
For more details, please refer to the announcement and application form attached. If you have any questions, feel free to get in touch through the contact listed.

January 21, 2016 in Fellowships/Research Opportunities | Permalink | Comments (0)

Sunday, January 3, 2016

Chinese law position at Monash University Faculty of Law

The Faculty of Law at Monash University is interested in hiring someone with Chinese law expertise. Here’s the announcement. It doesn’t mention China specifically, but I am informed that that is one of their areas of interest.

January 3, 2016 in Internships/Employment Opportunities | Permalink | Comments (2)

Friday, November 27, 2015

Jobs available in China IPR

The China IPR blog announces three China IP positions: http://chinaipr.com/2015/11/27/three-chinaip-positions-open/

November 27, 2015 in Internships/Employment Opportunities | Permalink | Comments (0)

Wednesday, November 25, 2015

USPTO seeks China program specialists

The USPTO is looking for China program specialists; law degree not required.

Program Specialist (IP Exchange), GS-13, all sources
https://www.usajobs.gov/GetJob/ViewDetails/422056500

Program Specialist (IP Exchange), GS-13, status/federal candidates
https://www.usajobs.gov/GetJob/ViewDetails/422065200

November 25, 2015 in Internships/Employment Opportunities | Permalink | Comments (0)

Tuesday, November 24, 2015

United States Information Technology Office (Beijing) seeks managing director

Sunday, November 15, 2015

More on Taiwanese independence and sovereignty

I posted the other day about a column written by my colleague David Shambaugh in which he averred to a "delusion" that Taiwan was an independent, sovereign state. I argued that by the definition of "state" in the Montevideo Convention, this view of Taiwan was hardly delusional. David has declined my invitation to respond, so I don't know whether he thinks that Taiwan is not a state under the Montevideo Convention definition, or whether he is just using a different definition of "independent, sovereign state."

In another forum in which I posted my comments, some have suggested a plausible, different definition of sovereignty: that it necessary involves an element of recognition by many other states. If so, and if we define "recognition" narrowly, then it could certainly be said that because Taiwan is not recognized (in the narrow sense) as a state by many other states, it therefore does not meet this particular definition of "sovereign." But if we use that definition of "sovereign," then we have to drop the claim that anyone is delusional, because nobody thinks that Taiwan is in fact recognized in this narrow sense by many countries. Some people celebrate that fact and some people bemoan it, but nobody disputes that it is a fact. Thus, under some definitions of sovereignty, Taiwan is in fact sovereign, and so people aren't deluded to think it is; under other definitions, it's not, but nobody thinks it is, so people aren't deluded in that case either. I cannot think of a fact-based definition of sovereignty about which people could be said to be deluded, since people of all political views pretty much agree on what the current facts on the ground are regarding Taiwan's ability to govern itself and its place in the international community. Of course, they disagree on the ought, but not on the is.

November 15, 2015 in Commentary | Permalink | Comments (2)

Friday, November 13, 2015

Is Taiwan an independent sovereign state?

In a recent op-ed in the South China Morning Post, my colleague David Shambaugh spoke of “the delusion and illusion that Taiwan is an independent sovereign state”. I’m not sure what he means by this. Needless to say, people have different views on whether Taiwan should be an independent, sovereign state. But as for whether it actually is one now, that is a matter of (a) facts and (b) how those facts fit one’s definition of “independent sovereign state”.

I’m not sure there is too much disagreement on the facts; in the same op-ed, David refers to Taiwan’s “de facto autonomy”, and autonomy is of course just a synonym for independence. That is at least one important fact. The question then becomes, what does he mean by “independent sovereign state”? Everyone is of course entitled to their own definition, but for a definition that is reasonably well accepted in international law and wasn’t simply cooked up with Taiwan in mind, we could turn to the Montevideo Convention of 1933. That says, in pertinent part:

The state as a person of international law should possess the following qualifications: a) a permanent population; b) a defined territory; c) government; and d) capacity to enter into relations with the other states.

And:

The political existence of the state is independent of recognition by the other states.

Under this definition—and it doesn't seem like a particularly wild and crazy one—it’s hard to see how Taiwan would not qualify. David is of course not obliged to accept that definition himself, but surely it’s going a bit far to claim that anyone who does is delusional.

November 13, 2015 in Commentary | Permalink | Comments (1)

Sunday, November 8, 2015

Paul Gillis on the PCAOB's China troubles

Last Tuesday I blogged about the breakdown in talks between China and the Public Company Accounting Oversight Board. Here's a blog post on the same issue from Paul Gillis at the China Accounting Blog. Check out the comments as well.

November 8, 2015 in Commentary, News - Chinese Law | Permalink | Comments (1)

Tuesday, November 3, 2015

More problems for the PCAOB in its effort to audit the auditors

According to Bloomberg's Securities Law Daily, last month "a final agreement that would have allowed a U.S. regulator to examine the audits of Chinese companies listed on American stock exchanges fell through" (full story here). The story calls this a "setback" for the Public Company Accounting Oversight Board and a "blow" to its chairman, James Doty. And it is. But the story does not portray the breakdown in negotiations as in any way problematic for those on the other side of the negotiating table, the Chinese government. And perhaps the story is right on that, too - is anything undesirable going to happen to China or Chinese companies now that negotiations have failed? Are Chinese accounting firms no longer going to be qualified to audit financial statements of companies listed in the United States? If a failure of negotiations results in no adverse consequences for one party to the negotiations, why would it ever negotiate? Failure has to have consequences for both sides before these negotiations can go anywhere.

The problem, of course, is that China treats information about just about anything as having potential national security implications. And it claims that allowing the PCAOB to inspect domestic auditors would be an infringement on its sovereignty--perhaps its "auditing sovereignty"? Two answers. First, big deal. That's what international negotiations are about. You give up some of your sovereign freedom of action in order to get something you want. Second, the purpose of an audit of a financial statement is to protect investors--in this case, US investors. Chinese auditors are exporting audit services to the US. China exports chicken to the US and accepts that the US Department of Agriculture has a legitimate interest in inspecting its chicken processing plants; it doesn't cry that that infringes on its poultry sovereignty. If it's acceptable for the US to go to China to inspect the way imported chickens are made, how is that different from going to China to inspect the way imported audits are made?

November 3, 2015 | Permalink | Comments (0)

Wednesday, October 28, 2015

Criminalization of test cheating? Less than meets the eye.

The Shanghaiist blog recently reported on a recent amendment to the Criminal Law that will come into effect on Nov. 1st, saying, "Chinese students who cheat on exams could now face up to 7 years in prison." (Here's a similar story from the China Daily headlined "Cheating in civil service exams means seven-year jail".) Well, not exactly. Actually, not even close.

There is indeed a new rule about cheating on official state examinations, including the all-important gaokao (university entrance examination). It will appear as Article 284A (第二百八十四条之一) in the revised Criminal Law.

Here's the full text in Chinese:

  • 在法律规定的国家考试中,组织作弊的,处三年以下有期徒刑或者拘役,并处或者单处罚金;情节严重的,处三年以上七年以下有期徒刑,并处罚金。This provision provides for up to seven years' imprisonment for those who organize cheating in serious circumstances. This is not a punishment for the cheaters themselves.
  • 为他人实施前款犯罪提供作弊器材或者其他帮助的,依照前款的规定处罚。 This provides punishment under the previous paragraph for those who assist in the above offense by providing cheating equipment or other assistance. Again, no punishment for cheaters themselves.
  • 为实施考试作弊行为,向他人非法出售或者提供第一款规定的考试的试题、答案的,依照第一款的规定处罚。This provides punishment under Para. 1 for those who sell or other supply exam questions and answers in order to help people cheat. No punishment for cheaters themselves.
  • 代替他人或者让他人代替自己参加第一款规定的考试的,处拘役或者管制,并处或者单处罚金。Finally, we have some language that provides punishment for cheaters themselves. But it applies only to one kind of cheating: impersonating a test-taker to take the test, or having someone impersonate you to take the test. There is no punishment for any other kind of cheating. And the punishment for cheating by impersonation is light: detention (拘役), which is for between one and six months, or control (管制), which is similar to probation.

Bottom line: The headline should read, “Chinese students who cheat in one particular way on exams could face up to six months in detention.”

October 28, 2015 in Commentary, News - Chinese Law | Permalink | Comments (0)

Monday, September 21, 2015

Central Committee and State Council issue document on state-owned enterprise reform

Last month, the Chinese government (to be precise, the Central Committee of the Communist Party together with the State Council) issued a document on state-owned enterprise (“SOE”) reform: the Guiding Opinions on Deepening the Reform of State-Owned Enterprises (关于深化国有企业改革的指导意见) (the “Opinions”). Given the level at which they were formulated and issued, the Opinions seem intended to be a major statement about SOE reform. But what do they actually say? The following comments are based on a quick read and are not, for better or worse, informed by what anyone else has written, because I have not come across any other commentary so far. (I haven’t looked.)

If you are looking for a statement that the government will reduce the role of SOEs in the economy, or engage in large-scale privatization, this is not that statement. Quite the contrary. Indeed, it still scrupulously avoids the term “private” when talking about investment or ownership, using instead such clumsy circumlocutions as “non-public”. (This term has been used for so long it doesn’t even sound silly any more, even though Cao Siyuan properly skewered it many years ago, pointing out that we don’t refer to our right hand as our “non-left” hand.) I think it’s safe to say that if in 2015, policymakers still can’t bring themselves to say the word “private” in a major document about the economy, there are certain conclusions we can draw about policy goals.

The Opinions declare that public ownership shall remain the mainstay of the economy. For the Opinions, the point of reforming SOEs is to do state ownership better, not to reduce it or even eliminate it. This goal appears not only in the specific proposals of the Opinions, but also in the language that permeates the document: a mounting pile of clichés that I last saw in such profusion back in the 1980s, when the same goal prevailed.

The diagnosis of SOE problems seems as muddled as ever and no good solutions are offered. For example, the Opinions promote the separation of ownership (所有权) from control (expressed as “the right to manage” (经营权)) as a positive good. This has been a mantra of SOE reform for decades. Yet it fails to recognize that where the state is an owner, it must necessarily act through human agents. Those human agents—SOE managers—exercise control. If there is any aspect of SOE operations they don’t control, that’s because someone superior to them—another human agent of the state—controls it. Thus, ownership and control necessarily are now, have always been, and always will be, separated in SOEs. If SOEs are not performing properly, it is not because ownership and control are insufficiently separate. It is because management does not have the right set of incentives that align their interests with those of the state owner. The separation of ownership from control is an unavoidable problem to be managed, not a solution to be embraced.

This inattention to the problem of incentives is reflected in the language about enhancing internal supervision of SOEs, among other things by strengthening the oversight role of the enterprise’s staff and workers congress (职工代表大会). Assuming the staff and workers congress is not dominated by management and in fact represents the interests of the staff and workers—a big assumption—then one would expect it to exercise any power it had in the interests of staff and workers, which will not be congruent with the interests of the state owner. There is no point in giving people power over management decisions without a clear understanding of the direction in which they are going to pull such decisions.

A great deal of language in the Opinions is devoted to the idea that SOEs should be more “independent”. But independent of what or whom? The chief significance of separate legal status in a US corporation is that it delineates a pool of assets that are available to corporate creditors—the assets of the corporation—as against the assets that are not—the assets of the stockholders. Protection works the other way, too: creditors of the stockholders cannot seize corporate assets. They can seize only the rights of the stockholder, and those rights don’t include a right to take a percentage of corporate assets at will.

Yet the Opinion seems to conceive of independence as meaning that SOEs have a kind of will and interest of their own. They should manage themselves, be responsible for their own profits and losses, and bear risks themselves. One sees what the Opinions are getting at, of course: SOEs (more accurately, people who work at SOEs) shouldn’t expect endless subsidies from the state. But this way of putting it obscures two important points. First, it’s entirely appropriate for SOE managers to be accountable to some outside body, and a body representing the state, which after all put up the money, is a reasonable candidate. Second, the state shareholder is taking risks when it owns SOEs. If the SOE is profitable, the shareholder wins. If the SOE loses money and eventually becomes bankrupt, the shareholder loses. The state shareholder is not legally required to pay the debts of the bankrupt SOE—that’s what limited liability is all about—but that doesn’t mean that the SOE as such bears risks. It’s all the interests associated with the SOE—state investor, management, workers, and suppliers, among others—that actually bear the risks of things going bad.

One possible meaning of “independence” is the idea expressed in the Opinions that SOEs shouldn’t have to answer to multiple masters, and that no government department may interfere in their operations without proper authority. The question is, what allows that to happen now, and how will it be prevented? If managers are appointed by and responsible to Agency X, why do they need to listen to Agency Y? If Agency Y is going beyond its mission to impose burdens on the SOE, why does the SOE have no remedy at present? The approach of the Opinions seems to be to ask those doing improper things to stop doing them, not to give the victims of the improper doings a means to resist.

While promoting the independence of the SOE (and presumably its management), the Opinions proclaim at the same time the critical and leading role of the Party organization in the SOE. The Party’s role should be written into the SOE’s corporate charter, and the Chairman of the Board should generally be the Party secretary. The Opinions call for upholding the unity of the principle of Party control over cadres and corporate procedures for electing directors and appointing management (i.e., election by shareholders and selection by the board respectively), but don’t make clear how the apparent contradiction between the two principles is to be resolved.

The Opinions propose that SOEs should be divided into two categories: commercial and public-interest. (The actual work of categorization is to be carried out by whichever state body acts as the investor.) The goal for commercial SOEs? Strengthen the state-owned economy and maintain and increase the value of state assets. In other words, do SOE operations better. Private investment in these enterprises may be allowed in order to diversify the shareholder base. As long as the enterprises remain controlled by the state, this of course has the effect of increasing the amount of assets under state control.

For commercial SOEs in competitive sectors, the Opinions encourage diversification of the shareholder base by allowing in private investors and other state investors. Curiously, the Opinions state that in addition to retaining absolute or relative state control in such enterprises when private investment is allowed in, it will also be permissible for the state merely to have equity participation, which presumably means something less than even relative control. But if the state has neither control over, nor a majority economic interest in, an enterprise, in what sense can we continue to call the enterprise “state-owned”? In any case, the Opinions set forth standards for the assessment of managers in such commercial SOEs; the standards are about business results and asset values.

For commercial SOEs in key economic sectors and sectors related to national security, private shareholding is permitted, but the state must maintain a controlling interest. The standards for assessing managers are the same.

With respect to public-interest enterprises, the Opinion suggests, albeit not very clearly, that the state must maintain a controlling equity interest here as well. Managers will be assessed on business results and asset values, with some attention paid to “social assessment” (社会评价).

The Opinions also address the issue of state holding companies, also known as group companies (集团公司). These companies are not well understood; apparently some have yet to undergo formal corporatization under the Company Law and are still structured as traditional SOEs. The Opinions encourage further corporatization of holding companies, and suggests that in some circumstances they could be listed. State equity could in some circumstances be converted to preferred shares, and the Opinions also suggest the possibility of something that looks like a golden share—that is, a state share with super voting rights or a veto over changes in control. Since it is customary for interests labeled “preferred shares” not to have voting rights, it is not clear how the Opinions contemplate that state control or influence will be maintained in companies where the state’s interest takes that form.

The Opinions devote a great deal of text to what they call the principle of management over capital as opposed to management over enterprises, and stress the importance of the former. Judging from the content of the discussion under this heading, it seems to mean that enterprises as such shall no longer be sacrosanct in the state’s approach to managing SOEs; instead, it will be quite acceptable to close down one enterprise and move state-owned capital to a sector where it will be more productive. In other words, the goal is not to maximize the performance of state-owned enterprises as such; it is to maximize the performance of state-owned capital—within, of course, the limits of the policy that the state must remain invested in certain sectors and types of industry. This could be an important change in the way the state manages its assets.

* * * * *

On the whole, the Opinions do not seem to set forth a radically new policy toward SOEs. The language can seem quite old-fashioned at times; it seems to come from the 1980s. It contains no hint at all that the state intends to get out of the business of owning enterprises; instead, its goal is to have the state manage its enterprises better. But this is not a new goal; the state has been trying to do this since SOEs first came into existence. And basically no radically new policies are proposed to achieve this goal. The one new policy (at least, new to me) is that of the principle of managing capital instead of enterprises. This is sufficiently vague, however, to require that we wait and see how it is implemented before pronouncing it meaningful.

Comments welcome.

September 21, 2015 in Commentary | Permalink | Comments (0)

Monday, September 7, 2015

Robert Precht on the ABA's non-statement about the crackdown on lawyers in China

Here's his op-ed.

[POSTSCRIPT Sept. 7, 2015: Here's Jerome Cohen's statement about the statement.]

September 7, 2015 in Commentary | Permalink | Comments (2)