China: A Substantial Step Towards Codification Of Chinese Civil Code

Last Updated: 30 January 2018
Article by DeHeng Law Offices

The Codification of Chinese Civil Code Strides a Substantial Step.

On the promulgation of the General Provisions of the Civil Law of the People's Republic of China.

I. Background and Impact of GPCL to Chinese Legal Regime

On March 15, 2017, the General Provisions of the Civil Law of the People's Republic of China("GPCL") was passed by the Fifth Conference of the Twelfth Session of the National People's Congress. It will come into force on October 1, 2017.

We can make an optimistic estimation that the Chinese government will promulgate a civil code in 2020. We have reason to believe that China will welcome a totally different era of civil law.

The wheel of history is always moving forward, despite of twists and turns, cannot be halted by anybody. China is pronouncing to the world that its nomocracy is becoming more and more consummate, and it begins to take the role as a safety harbour in ensuring the security of nomocracy in the process of globalization.

Undoubtedly, the promulgation of GPCL also attracted different voices from the Chinese legal and practitioners' community, which is not uncommon. The codification of the Chinese civil code had been waiting for more than sixty years. This process has suffered a variety of interruptions, such as the well-known era of planned economy and the cultural revolution. At that time, even nomocracy, the product promoted the modern human civilization, was obviously difficult, let alone the civil code whose purpose is to embody the value of private law! Even if our vision to nomocracy is always in existence, those interruptions never stopped. The GREATEST THING brought by promulgation of GPCL is that: we can declare to the world that a basic law for the purpose of safeguarding the normal operation of market economy and protecting legitimate rights of individuals and organizations was officially issued.

From the beginning years when I became a lawyer, the General Rules of Civil Law ("GRCL"), which was promulgated in 1986, is one of my magic weapons. In China, the GRCL had played the role of a simplified version of civil code, although not perfect. With the maturity of the market economy system, separate civil law statutes including the Contract Law, the Property Law, the Marriage and Family Law, the Inheritance Law, the Tort Liability Law, and the Intellectual Property Law etc. have been gradually formulated and published. However, as a practicing lawyer, you may get confused with the conflicts embedded in the legal spirit as reflected in the provisions between GRCP and separate legal statutes or among separate legal statutes themselves. As a result, lawyers would think hard trying to find the most favorable provision(s) to apply to their client's cases. We understand that the law promulgated under different backgrounds and era will bear the footprint of such era. With the progress of history, the limitations of the original legal formulation would become more and more obvious since conflict exists in the provisions and incompleteness in the legal system often made people feel confused. We have been waiting for a long time for a civil code to unify the regime of Chinese civil law.

GPCL, as a pioneer section outlining the structure of the future Chinese civil code, reflects the general needs of civil law for China's transition from planned economy to market economy. It tries to use the method of extracting common factor to collect basic rules embedded in separate civil statutes and to form the basic principle of a civil code. GPCL also aims to overcome the conflict(s) which might exist between the various separate civil statutes and to lay a foundation for the future development of a unified and harmonized civil code system.

II. What GPCL Brings

Specifically, the enactment of GPCL embodies some ideas that worth paying attention to.

Firstly, legal thinking.

For example, Article 5 of the basic rules of GPCL provides that civil subjects shall abide by the principle of voluntariness when they are engaged in civil activities. Civil subjects may establish, vary and terminate civil juristic relations in accordance with their own intention. This means, GPCL has confirmed the core position of "autonomy of will" (Yi Si Zi Zhi) in civil juristic acts. "Autonomy of will" is also known as "private law autonomy", which means civil subjects can do civil activities according to their own will, manage their private affair, create rights and obligations within the scope provided by the law, and no other legal subject (including sovereign states) may interfere. In other words, since GPCL has confirmed the core position of "autonomy of will" of civil subjects, it amounts to has empowered the civil subjects to "create the law" in the field of civil law, which would greatly release the creativeness of humankind. Since China departed from the western capitalist countries in 1949 by choosing a different economic and political system, the contract concept and the "freedom of contract" principle have experienced ups and downs in legislation and social life. These changes are similar to public's attitude to the legal system at that time. Under the system of planned economy, since it lacks strong economic base for the "autonomy of will" principle and accompanying legal system, there has been many detours before China finally confirms in law the principle of "autonomy of will".

After the reform and opening up of China, however, to meet the requirements of the socialist marketing economy, the "autonomy of will" principle has been gradually embodied in some of the promulgated civil statutes, and has been written into the Contract Law and the GRCL titled "Willingness Principle" (Zi Yuan Yuan Ze). But in practice, there still exist problems in application of such principle. Now, this principle has been established by Article 5 of GPCL (whose spirit has been injected and refined in the whole text of GPCL). Undoubtedly, the "autonomy of will" principle will be very important for laying the foundation for the future Chinese civil law system.

Secondly, legislative technique.

The basic framework of GPCL includes basic rules, civil subjects, civil rights, civil juristic acts, civil liability and statute of limitation. I analyze as follows.

  1. In respect of basic rules, it re-confirms that the civil activities need to follow the principles of voluntariness, fairness, integrity, etc. In addition, Article 9 provides for protection of ecological environment and Article 10 sets up the principle that usage could be an origin of civil law.
  2. In respect of civil subjects, the term "citizens" adopted in GRCL were changed into "natural person" in GPCL, which embodies wider coverage of civil subjects. Meanwhile, the provision of protecting fetuses' interests is added to the GPCL. Fetuses that require protection in the succession of estates and receipt of donations shall be deemed as having the capacity for civil rights. The statutory age limit for minors with limited capacity for civil conduct is lowered to raise minors' awareness of their rights and obligations. The guardianship system is improved (i.e. family guardianship as the base, social guardianship as the complement, and state guardianship as the "catch-all"). We can say that from the birth to the grave, everyone is "paid attention to" by the GPCL. As to the provisions relate to legal person system, GPCL divides legal persons into three categories according to the different purpose and function in setting up such legal persons, i.e. for-profit legal persons, non-profit legal persons, and special legal persons. This change is to meet the need of social development. What worth mentioning is that special legal persons include government organs, rural collective economic organizations, grassroots autonomous organizations and urban and rural cooperative economic organizations. The improvement of legal person system reflects scientificity and the spirit of keeping with the times. Individual businesses, partnership businesses and non-legal-person professional service organizations are regulated in the section of non-legal-person organizations. This stipulation complies with the actual requirement of China's economic and social development. Meanwhile, it enables a greater number of non-legal-person organizations to legally conduct various kinds of civil activities. This legislation measures surely will greatly liberate the productive forces.
  3. In respect of civil rights, GPCL is putting great emphasis on protection of citizens' rights and property right. What worth mentioning include: (i) provisions on protection of a natural person's personal information against the background of an informatization society; (ii) overall provisions on protection of intellectual property rights, and (iii) the innovative formulation regarding protection of virtual assets.
  4. In respect of civil acts, the connotation of civil juristic acts is enlarged. It now includes not only legitimate juristic acts, but also invalid, revocable and effectiveness-pending juristic acts. Thus, the provisions strengthened rule consciousness and responsibility consciousness of the civil subjects. The principle of "declaration of will" (Yi Si Biao Shi) and "effectiveness rule of civil juristic acts" have also been added into such section.
  5. In respect of civil liability, GPCL perfected regulation on the legal consequence where a civil subject failed to perform or failed to fully perform his/her civil obligations. In particular, Article 184 of GPCL provides that for damages caused due to voluntary help offered during emergency, the one offering the help shall not bear civil responsibilities so as to remedy the social atmosphere and play a positive guiding role to encourage courageous behavior. While there might be confusions in implementing such provision, I am of the view that the advantages should far outweigh the disadvantages.
  6. In respect of statute of limitation, in order to adapt to the complicated social reality, the general limitation period stipulated in GRCL (i.e. two years) will be extended to three years. This change aims to protect the legitimate interests of creditors and to facilitate the construction of honest society.

III. Conclusion

Undoubtedly, before and after the promulgation of GPCL, various types of disputes still exist. Even though not easy to form a consensus now, I believe that the codification of the civil code in the future will be gradually improved.

Just as what Montesquieut said, "In civil law in motherly eyes, every man is the whole country". Civil law shall be commended for displaying the independent value of civil rights that take care of the individual sense of privacy. GPCL and the forthcoming civil code not only let people be convinced of political and economic system in China, but also let Chinese legal practitioners hopefully look up to the sky of their motherland under the nomocracy.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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