Judicial independence is often considered the simple by-product of a set of legal provisions aimed at wholly insulating the judge not only from state influence – usually the executive – but from the external environment: the more insulated the judge, the more independent she is deemed to be. A good example of this attitude can be found in one of the 1985 United Nations Principles of Judicial Independence:

There is often little critical reflection about the extent to which this ideal can be realized in practice and its consequences for the administration of justice. Conversely, judges working in political systems where such guarantees are not present in full are thought to lack independence, often without any further investigation.

To clarify the issue, a distinction should be introduced between institutional independence – that is, institutional guarantees of independence like the well-known during good behavior clause against arbitrary dismissal – and independence on the bench, that is, impartial behavior on the part of the judge. Some degree of institutional independence is a necessary but not sufficient condition of judicial impartiality. Institutional independence is only one of several determinants of judicial behavior. This is one reason why it is not always easy to single out the “right” degree of (institutional) judicial independence.

This chapter develops a new analytical framework for understanding and promoting judicial independence in China. As noted in the previous chapter, general denunciations of the “lack” of (meaningful) independence in China do not capture the complexity of the situation. Attributing the lack of meaningful independence primarily if not exclusively to the nature of the political system also misstates and overstates the role of the party and ignores more common sources of pressure on the courts. The likely source of interference, the risk of interference, and the impact of interference all differ depending on the type of case.

Given the diverse nature of the problems, there is no single solution – no silver bullet – that will ensure meaningful judicial independence in China (whatever that means in light of the substantive disagreements about how independent courts should be at this stage of development). Reforms to facilitate judicial independence must be tailored to the particular circumstances and include a wide range of changes that affect not just the judiciary as an institution but substantive and procedural law, the balance of power among state organs, party–state relations, and social attitudes and practices. Judicial independence is, however, not an end itself, and the courts are not the sole, most effective, or most appropriate venue for resolving all disputes. Thus, we also provide policy recommendations for each type of case, including in some cases recommendations that emphasize nonjudicial mechanisms for resolving certain issues or that limit judicial independence in an effort to reduce corruption, promote sociopolitical stability, and enhance justice and judicial accountability.

The Chinese judiciary is regularly criticized for the lack of (meaningful) independence. The lack of “genuine progress” in establishing an independent judiciary is then cited as evidence that China's reform process is trapped in transition. In response, international donor agencies and bilateral legal cooperation programs have encouraged China to adopt the institutions and practices found in advanced Western states known for the rule of law.

Surrounding these views is a set of common myths and unfounded assumptions. The first assumption is substantive: the concept of judicial independence is clear, and there is a single agreed upon model or generally accepted set of institutions and best practices articulated with sufficient specificity to guide reformers. The second assumption is methodological: there are clear standards for measuring judicial independence. The third assumption is normative: we know how independent courts should be (at each stage of development). The fourth assumption is the more independence the better. The fifth assumption is that the lack of judicial independence is a serious problem in all types of cases in China. The sixth is that China's courts lack independence because independence is impossible within a single-party state. The seventh, and a corollary, is that the party is the main source of interference with the courts. The eighth – and perhaps the granddaddy of them all – is that were China to suddenly democratize, judicial independence would no longer be a problem.

This is the first book in English on judicial independence in China. This may not seem surprising given China remains an effectively single-party socialist authoritarian state, the widely reported prosecutions of political dissidents and the conventional wisdom that China has never had independent courts. On the other hand, this may seem surprising given that China has become a possible model for other developing countries – a model that challenges key assumptions of the multibillion-dollar rule of law promotion industry, including the central importance of judicial independence for all we hold near and dear. Although China's success in achieving economic growth and reducing poverty is well known, less well known is that China outscores the average country in its income class, including many democracies, on many rule of law and good governance indicators, as well as most major indicators of human rights and well-being, with the notable exception of civil and political rights. How has China managed all this without independent courts?

WHY STUDY JUDICIAL INDEPENDENCE IN CHINA?

There are few ideas more cherished, and less critically scrutinized, than judicial independence. Judicial independence is regularly portrayed as essential to rule of law, good governance, economic growth, democracy, human rights, and geopolitical stability.

This chapter draws on a detailed study of corporate law adjudication in Shanghai from 1992 to 2008. The purpose of the study was to better understand the demonstrated technical competence, institutional autonomy, and political independence of one court system in the People's Republic of China (“PRC”) in a sector outside of the criminal law. The study consisted of a detailed examination and comparison of full-length corporate law opinions for more than 200 reported cases, a 2003 Shanghai High Court opinion on the 1994 Company Law (describing a decade of corporate case outcomes), a 2007 report on cases implementing the Company Law in 2006 (more than 760 cases), and extensive interactions with Shanghai court officials handling such disputes – all for a wide diversity of Shanghai jurisdictions and procedural postures. Due to space limitations, this chapter focuses on the demonstrated independence, and to a lesser extent autonomy, of the Shanghai courts when faced with a completely altered Company Law.

THE NEW JUSTICIABILITY OF THE COMPANY LAW

Corporate law theory holds that in jurisdictions like the PRC, where the judiciary is regarded as underdeveloped, buffeted by political and other external pressures, and deficient in handling complex cases, company law must be largely self-enforcing and may not be structured to “depend on fast and reliable judicial decisions.

Despite the passage of hundreds of laws and the expansion of the judiciary since the late 1970s, a dominant theme in the literature is that Chinese courts have enjoyed little judicial independence. The courts are often portrayed as little more than a loyal subordinate of the party–state that carefully carries out assigned tasks; they have virtually no will or capacity to resist the party–state's interference.

However, recent developments have raised questions about how far, and under what conditions, the conventional wisdom that Chinese courts are incapable of resisting political pressure from superior powers holds up. The courts have refused to accept jurisdiction over some types of disputes that have arisen in China's unprecedented social transformation. This strategic retraction rather than expansion of judicial power is surprising in light of the global trend toward judicialization and the trend in China to extend the government's policy of “governance in accordance with law” to a widening range of economic and social activities.

For some of these disputes, the courts' refusal to exercise jurisdiction may be explained by the inferior position of the courts: when superior political powers such as the party or the government do not want the courts to be involved in the dispute resolution process for political reasons, the courts have little room to disobey. This has been well illustrated in the handling of urban housing demolition disputes.

The dominant view among Western legal scholars, human rights activists, and pundits is that the Chinese judiciary lacks meaningful independence in large part because China is a single-party authoritarian state. According to this view, the Chinese Communist Party (CCP) is the main source of interference with the courts and the biggest obstacle to judicial independence. This chapter challenges the prevailing wisdom about the party and its role with respect to judicial independence, legal reforms, and China's efforts to modernize more generally.

The dominant view is the result of analytical and methodological errors typical of Western China watchers' efforts to understand China's legal system and the legal systems in other developing states, authoritarian ones in particular. It is based on four unwarranted assumptions. First, there exists some pure state of reality that deserves to be called judicial autonomy. Second, it is possible to construct a set of standards for, or an objective model of, this judicial autonomy, either as a political structure or as a set of social conventions. Third, this model can show that the CCP exercises political influence on judges and the courts in a way that is inimical to and undermines judicial autonomy. Fourth, it is possible to identify and examine the actual social effect of such influence, and the overall effect of party influence is negative. Rationally considered, however, these suppositions are simply unrealistic.

Suggesting a new approach for promoting judicial independence is an ambitious but necessary project. This chapter begins with a critique of the current dominant approach based on global best practices and then considers alternatives. Examples are used throughout to illustrate both criticisms of the best-practices approach and the potential benefits of alternative approaches. These alternatives emphasize the need to pay more attention to context, to culture and politics, to bad local processes, and to actual results of particular reforms. Real-life examples are essential because so-called international best-practice standards are often too abstract and too far removed from reality in many countries to be effectively implemented. Although international best practices may serve a useful heuristic purpose for legal reformers in some circumstances, they can easily become intolerant one-size-fits-all dogmas that hinder progress.

WHAT IS WRONG WITH GLOBAL STANDARDS? THE DENIAL OF CULTURE AND POLITICS

In Global best practises: a model state of the judiciary report, a strategic tool for promoting, monitoring and reporting on judicial integrity reforms, IFES (International Foundation for Electoral Systems), one of the most experienced and influential actors in the rule of law promotion business, states:

INTRODUCTION

In the north-central province of Shaanxi, as I was waiting to interview a judge, I noticed a small exercise book on his office desk. The same sort of notebook, brown and cheap, that Chinese children use for their homework. To start the conversation, I gently asked what he used the notebook for and was told that it was for his political homework assignments. The last page the judge had filled in was a handwritten copy of the Charter of the Chinese Communist Party (CCP).

As I decided to further explore the issue of grassroots judges' political culture in predominantly rural areas, I observed that although most of them share similar political and intellectual references, they do not have a strong common legal culture. For example, most of them believe that one-party rule is the key to stability, that party members are the elite of the country, that law's main goal is to be punitive, that the state constitution is purely ornamental, that judges are above all civil servants, and that the judiciary must be supervised by the people's congresses. Those recurrent political references reflect the judges' knowledge of the world. Put differently, their legal backgrounds appear highly politicized.

The capacity of a legal system to protect property rights is generally considered one of the most important factors in economic development because commercial transactions will become unduly costly and risky in an environment in which contracts cannot be enforced by the state. An independent judiciary, in turn, is generally considered an essential element of an effective legal system and thus necessary for sustained economic growth. Chinese leaders have clearly recognized the critical importance of building a legal infrastructure that will facilitate commercial transactions in an increasingly market-oriented economy; they have also acknowledged the need to enhance the competence, authority, and independence of the judiciary. Yet scholars remain divided on the role of the legal system in development and how well it protects property rights.

How well then is China implementing the declared policy of “ruling the country according to the law”? How are Chinese citizens and corporations responding to the new legal environment? What strategies do they use to win favorable outcomes in court? How independent are the courts in handling commercial cases? What are the sources and impact of outside influence in such cases? How do the parties assess the legal system and their experience in court? This chapter sheds light on these important issues by measuring various aspects of the civil proceedings in basic level and intermediate courts in one of China's leading urban commercial centers.

This chapter focuses on an important issue under intense debate within many circles in China – the independence, impartiality, and integrity of the judiciary. The outcome of this debate has significant implications for China's future, for international judicial cooperation on a range of fronts, and for globalizing the rule of law in the developing world, where China has an ever-growing interest and influence.

China will not likely make the historic cultural, social, and legal transformation from the rule of man to the rule of law or realize her full economic and political potential over the long term without enhancing the independence, impartiality, integrity, and capacity of the judiciary. Global experience demonstrates that an independent judiciary is central to rule of law, and that it serves a number of important mutually supportive purposes, including: (i) safeguarding and enforcing people's property rights and human rights; (ii) resolving economic and political disputes; (iii) promoting international judicial cooperation fairly and predictably; (iv) addressing, mitigating, and preventing judicial and governmental corruption; (v) promoting social justice and social harmony; and (vi) promoting national and international political legitimacy. Because there are other institutional mechanisms in some countries that perform some of these essential tasks, particularly at the local and informal levels, most developing countries today are trying to create an independent judiciary with integrity as one of their long-term objectives. China is no exception.

Like many countries around the world, China is increasingly interested in promoting the rule of law and judicial independence. A competent and professional judiciary is a central component of the “socialist rule of law,” and China has made significant investments in institutional quality. Scholars disagree, however, about the efficacy of these reforms to date. Just as we have few appropriate points of comparison for assessing China, China has few points of reference for designing reforms.

This chapter explores the experience of China's East Asian neighbors with regard to judicial independence, with an eye toward drawing lessons for China's own reforms. Japan, South Korea, and Taiwan collectively provide a useful vantage point to examine developments in China because their rapid growth from the 1950s through the 1990s represents the greatest sustained example of rapid growth in world history. The only comparable period of growth is that of contemporary China, now nearing the end of its third decade. The East Asian cases are also relevant to China because the countries in the region share certain cultural traditions, and because many of them developed their judicial systems during periods of authoritarian governance. Finally, the East Asian cases, like contemporary China, seem to challenge the conventional wisdom that a powerful legal system is necessary for sustained economic development. My argument is that these cases provide nuanced lessons for the Chinese case about the definition of and conditions for judicial independence.

INTRODUCTION

Corruption in China's courts is a neglected field of study in both Chinese and English language academic circles. Although scholars and commentators have pointed out various deficiencies in the operation of courts, their relation to corruption has never been closely examined, let alone systematically investigated. Policymakers as well as scholars seem rather more ready to attribute judicial problems to external factors, such as undue interference from the Chinese Communist Party (CCP), lack of resources, and local protectionism. Even when scholars pay attention, they do so most often only in passing. This casual treatment of corruption in the courts has resulted in the marginalization of the problem in academic discourse. As a result, corruption in the courts appears omnipresent yet untraceable and elusive.

The relative scarcity of studies on this topic is perhaps attributed to the sensitive nature of the topic, which makes empirical research difficult. The fact that corruption is openly denounced and severely punished in China makes interviews with judges or other court officials difficult. Even for punished and closed corruption cases against court officials, access to case files is highly restricted. For researchers, attending court trials sometimes may yield interesting findings. However, what is seen in courtrooms provides little information on what happened behind the scenes. This lack of data makes any systematic analysis of corruption in the courts immensely challenging.