Under the umbrella term ‘socialist rule by law’, the Party is 'centralising' and 'standardising' grassroots governance, financial regulation, and judicial enforcement. Control is to be tightened across both public and private sectors.
Late 2023 has seen a series of statements by the Xi administration on ‘socialist rule by law’. In democratic jurisdictions, ‘rule of law’ is a principle that assumes the state itself is subject to the law. It embodies the separation of powers and judicial independence. These do not feature in the PRC and are indeed disparaged. ‘Rule by law’ under the CPC assumes the Party, not the law, is the supreme authority.
Much information is lost when PRC realities are held up to simplified Western frames of reference. The Xi administration’s attention to rule by law (法治 fǎzhì) is not a mere propaganda exercise—it strives to correct endemic socio-economic issues that started centuries ago and may well outlive the current administration, indeed, the Party-state itself.
grassroots rule by law
The measures now rolling out aim to realise grassroots ‘rule by law’ by enhancing societal monitoring. In cities, Beijing aims to reinforce the administrative role of Party and local agencies. A three-tier command chain set up in Beijing’s Shijingshan District, covering city wards, streets and residential communities, has become a model. Directly controlling local households, a wired hierarchy allows the Party to respond to threats and illicit activities preemptively.
Consolidated political oversight comes with an intensification of bureaucratic responsibilities in Party committees. They now coordinate social relief work, administration and judicial support. A three-tier hierarchy of grassroots conflict resolution is also taking shape, argues Hu Ming 胡铭 Zhejiang Guanghua University including quasi-official mediation arbitration and administrative and adjudication.
Quasi-official and administrative resolutions interact to buffer judicial workloads. The three tiers are meant to combine to contain conflict and mitigate risk.
tighter financial oversight
Centralisation and standardisation in the financial sector are to the fore in the Party’s response to loopholes and threats. The PBoC (People’s Bank of China) blames data syphoning by private monopolies on such internal and external loopholes. Jack Ma’s Ant Finance, which is alleged to have ‘disrupted’ PRC market order, is a case in point. The PRC is also disturbed by external sanctions and Western rhetoric that erode foreign investor confidence.
To steady the ship, two new commissions were created in 2023
- CFC (Central Financial Commission)
- deals with overall planning in the financial system and is a policy-creating body
- CFWC (Central Financial Work Commission)
- deals with party-building work in the financial field
Linking Party authority over the finance sector, Vice Premier He Lifeng 何立峰 is now CFC office director and inaugural CFWC secretary.
The CCDI (Central Commission for Discipline Inspection) pledges further scrutiny of decision-making in private firms, SOEs (state-owned enterprises) and local entities. Given the CCDI’s political colouring, its legal remit is moot.
At the state level, the State Council's MSS (Ministry of State Security) reinforces oversight and contains state security risks in the financial sector, mainly targeting foreign sanctions.
consolidating ‘socialist rule by law’
Centralisation of local reform and financial regulation has just begun to move from pilot to roll-out. Both local and central authorities await detailed legal codes and supporting measures to develop sustainable mechanisms. Newly created departments and frameworks are expected to soon be operational at both central and local levels.
Financial security is a priority for legislative upgrades. Since the passage of the 2015 National Security Law, Beijing has turned to legal means to protect critical interests. Equipped with an ‘overall national security concept’, this Law aims to safeguard
- fundamental political security, i.e. regime survival
- public (‘the people’s’) security
- economic security
- military, technological, cultural and societal security
- international security
An extensive, interconnected legal system has emerged to safeguard ‘overall national security’, including
- Counterespionage Law (2014, amended 2023)
- Cyber Security Law (2016)
- National Intelligence Law (2017)
- Anti-foreign Sanctions Law (2021).
A Food Security Law was drafted in June, marking a critical need in Xi’s national self-sufficiency scheme, and an example of writing topics deemed security-related by the Central Committee into law.
Also under deliberation is a Financial Stability Law. Given its primary focus on domestic risk, the State Council may enact interim measures to address the concerns.
Gradually taking shape on paper, ‘socialist rule by law’ is no easy matter to roll out ‘to the last mile’: official malfeasance makes it a minefield.
An October CCDI report listed well over 3,000 cases of inaction or misconduct involving national development. Of those penalised, 90 per cent were township or grassroots cadres. The tally was conservative, given that inspections were only sample-based.
Despite its well-known inaccuracies, central policy projection takes local Party organ data as given. Anti-corruption campaigns are constantly attempting to correct the distortion. Party cadres are kept on edge, yet corruption proliferates. Campaigns and punitive legislation, increasing with it were seen in the 2022 lockdowns to be counterproductive yet show few signs of abating.
games of interest
Called ever more into question is the hyper-aggregation assumed in the Xi administration's ‘socialist rule by law.‘ While it offers greater control, it may worsen China’s ancient ‘centre-local disconnect' and its attendant vectors of dysfunction. Localities may lack the capacity and resources to implement central directives. The result is uneven implementation and potential resentment.
Even as it strives to resolve them, centralisation creates ‘games of interest’ between Beijing and localities. The centre seeks to maintain control and enforce its vision and localities to meet local needs and secure resources. This results in rivalry, bureaucratic obstacles and difficulty adapting to local realities.
Nonetheless, Beijing is committed to enhancing Party writ. Its options are limited. Centralisation and standardising campaigns will persist under the current administration as it grapples with historic governance issues.
flavours of rule by law
Jia Kang 贾康 | CPPCC National Committee member and Chinese Academy of Fiscal Sciences former dean
‘Democratised rule of law’ is intrinsic to Chinese-style modernisation: a construct, embracing ‘law-based governance,’ and ‘whole-process people’s democracy’ found in the 20th Party Congress Report. Fixation on democratic rights, in Jia’s opinion, degrades into a tyranny of the majority. Political maturity favours a robust legal framework standing over all sources of power, not least raw public expression. Yet the mass will should be guaranteed representation via the legal system. This is unlike the outright legalism of China’s ancient Qin Dynasty, whose Legal Code lacked any democratic element: Chinese-style modernisation embodies public consent.
Long head of the Ministry of Finance’s Fiscal Science Research Institute, Jia was among those designing tax sharing reforms undertaken in 1994 by then Vice Premier Zhu Rongji 朱镕基 (and Zhu's protégé Lou Jiwei 楼继伟, former Finance Minister). A taxation advisor for Beijing, Shanghai, Fujian, Anhui, Gansu, Tibet and Guangxi governments, Jia helped draft the 11th, 12th and 13th 5-year plans. Impatient with legislative change, he left his Fiscal Science Research Institute directorship in 2013 to set up a reform think tank, the China Academy of New Supply-Side Economics.
Ye Zicheng 叶自成 | Peking University Department of Diplomacy and Foreign Affairs Management dean, China Centre for Strategic Studies director
The PRC should, suggests Ye, learn from Shang Yang’s 商鞅 law-based governance. In China’s Warring States era, Shang Yang advanced ‘legalism’, a doctrine urging, in the interests of military supremacy, strict discipline in governance, rule by law and centralisation. The PRC should, insists Ye, adopt these priorities, binding every strategic sector and all state affairs under a unified legal framework. All, including high officials and privileged families, are to be equal before the law, in return for order, efficiency and certainty in governance, and great power supremacy. Yet Shang’s reforms lacked grasp, warns Ye, of the need for public consent.
Teaching international relations at Peking University, Ye he has lent a traditional Chinese philosophical perspective to IR theory.
Jiang Ping 江平 | China University of Political Science and Law former chancellor and professor for life
Jiang points out that using stability maintenance and Chinese exceptionalism as excuses to limit judicial independence damages the development of China's rule of law. Currently, what counts as ‘stability’ is defined arbitrarily by local Party and state leaders, not by courts and legal practitioners. Many grassroots governments use ‘stability maintenance’ as an excuse to prohibit the court from executing its judgement. Jiang, nonetheless, considers it normal for countries to have unique legal systems based on their political circumstances. Legal frameworks across jurisdictions emphasise the use of evidence and fact-based arguments. They also pursue common goals striving for justice, human rights protection and equality. These common philosophical bases should not be ignored when developing China’s system.
Long-time rule of law advocate, Jiang, together with Li Buyun 李步云 and Guo Daohui 郭道晖, is one of 'three elders' of the legal community. Sacked as CPLU president in 1990 for siding with students during the 1989 movement, he has since been made the school's honorary president. An expert in civil law, Jiang was instrumental in drafting several foundational laws. Openly criticising the Party's civil rights record, Jiang defends lawyers and their role in building a law-abiding state. Jiang died on 19 December 2023, the day this brief was published.
18 May 2023: Li Yunze 李云泽 newly-installed SAFSA Party secretary recognises SAFSA’s aim to build a steel Great Wall to safeguard national financial secutiy
16 Mar 2023: the CPC aims to centralise financial regulatory policies through a new supra-regulator, the Party-led CFC
11 Jul 2021: CPC Central Committee and State Council jointly announce the aim to construct a Party-led grassroots system within five years
18 Sep 2020: Xi Jinping relates the ‘maple bridge experience’ with grid management policies during a meeting with grassroots representatives in Hunan
23 June 2019: CPC Central Committee and State Council issues ‘Guiding opinions on enhancing and improving rural governance’ to improve the Party-led rural administration model
02 April 2019: Chen Yixin considers political and security risk prevention to be a crucial agenda for socialist rule of law development
27 Feb 2019: SPC issued the ‘Opinions on deepening supporting reforms of the People’s Court system (fiith five-year outline 2019-23)’ and recommended developing ‘maple bridge experience’ to support dispute resolution
21 Feb 2019: People’s Daily commentary recommended that grassroots autonomous organisations should be mobilised to promote rule of law at a local level
22 Jan 2019: Xi Jinping demanded local Party committees to modernise social governance along the lines of ‘maple bridge experience’ to maintain social stability
2 Apr 2018: CDRC approved the 'Plan for setting up Shanghai court for financial services' to promote rule of law in financial regulations
11 Mar 2018: constitutional amendments passed in the NPC with CPC leadership confirmed as the ‘defining feature of socialism with Chiense characteristics’ and Xi Jinping thought included
04 Jan 2018: Zhou Qiang 周强 Supreme People's Court Party secretary and chief judge emphasises the need for judges to remain loyal to the Party
21 Oct 2017: a new leading small group for Governance by Law is set up to centralise decision-making procedures on rule by law reforms
15 Jun 2017: State Council proposed revisions for the ‘Regulations on the disclosure of government information’ to guarantee informational transparency and to facilitate data sharing