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When considering China， one often has to readjust one’s lenses given the rapid rate of transformation that is taking place in the world’s secondlargest economy. The discussion at the latest plenum of the 18th Central Committee of the Communist Party of China （CPC） caught the attention of both Chinese and international media in some respects， but surprisingly not as much as news on the slowdown in the rate of Chinese economic growth.
However， from a strategic point of view， this important plenary meeting sought to address and propose further plans of action for sustained and more balanced economic growth through the rule of law. It can be argued that the relationship between Chinese economic growth and the rule of law has never been stronger， especially as China is gearing up its implementation of multi-faceted reforms in the final months of its 12th Five-Year Plan （2011-15）. The vision set out in 2012 for 2020 is to have the rule of law fully implemented as a base strategy. This should translate into a fully functioning law-based government， steadily enhanced judicial credibility， and fully respected and protected human rights.
The rule of law in the Chinese context is a tool through which the leader should exercise power and preserve national stability， rather than be viewed as the Western “democratic rule of law.” It can be viewed as a socialist mechanism to institutionalize the ongoing anti-corruption campaign， catalyze deeper reforms and help stabilize the Chinese economy. The CPC’s move to further enhance the proclamations made in the 15th plenum [of its then Central Committee] in the late 1990s， where a clause on the rule of law was added to the Constitution， comes at a time when China is faced with challenges. These challenges can be minimized or alleviated through reforms in the tools and systems of governance.
The Chinese judicial system itself and how the Party leaders respect the law are two of the underlying challenges. In addition， there are other challenges like economic overcapacity， potential real estate bubbles， risks of local government debts， shadow banks， and restricted growth in non-public sectors and innovation. There is also the overarching need to restructure the economy - from one that has been factor- and efficiency-driven to one that is knowledge- and innovation-driven. These challenges， in the absence of the rule of law， could lead to excessive administrative interference， corruption and unfair competition. The land disputes in China’s southwest Yunnan Province are examples of how such conflicts arise. Due to the weaknesses of the current rule of law， the local government has the freedom to determine settlements and claims from such disputes， which end up in the hands of corrupt officials. Further on corruption， e-bribery for instance has become an example of how innovation in corruption has evolved in hidden ways. Beijing’s ongoing anti-corruption campaign， however， makes the plot against corruption a force to be reckoned with. Discussions on the rule of law should at the same time divorce power to the judiciary. A checking mechanism on the ruling party’s current operations would be a valuable outcome and a key tool to rebalancing the economy， which is currently skewed to benefit top Party officials.
A nation’s economic prosperity is strongly correlated with the nature and implementation of the rule of law， according to economists like Daniel Kaufmann who have evaluated the impact of the rule of law on the economy. While having the rule of law as a framework is ideal， strict enforcement of laws becomes the dividing factor between success and failure， and between enhanced or diminished competitiveness relative to other economies in the international trade and investment arena. For China to remain internationally competitive， making strides in the implementation of the rule of law will be pivotal.
Linchpin to the rule of law catalyzing Chinese economic growth will be the strict enforcement of the rule of law as well as greater legal awareness and consciousness among the public. It will achieve economic development， proper governance， cultural flowering and an enabling environment for the Chinese private sector to develop.
However， from a strategic point of view， this important plenary meeting sought to address and propose further plans of action for sustained and more balanced economic growth through the rule of law. It can be argued that the relationship between Chinese economic growth and the rule of law has never been stronger， especially as China is gearing up its implementation of multi-faceted reforms in the final months of its 12th Five-Year Plan （2011-15）. The vision set out in 2012 for 2020 is to have the rule of law fully implemented as a base strategy. This should translate into a fully functioning law-based government， steadily enhanced judicial credibility， and fully respected and protected human rights.
The rule of law in the Chinese context is a tool through which the leader should exercise power and preserve national stability， rather than be viewed as the Western “democratic rule of law.” It can be viewed as a socialist mechanism to institutionalize the ongoing anti-corruption campaign， catalyze deeper reforms and help stabilize the Chinese economy. The CPC’s move to further enhance the proclamations made in the 15th plenum [of its then Central Committee] in the late 1990s， where a clause on the rule of law was added to the Constitution， comes at a time when China is faced with challenges. These challenges can be minimized or alleviated through reforms in the tools and systems of governance.
The Chinese judicial system itself and how the Party leaders respect the law are two of the underlying challenges. In addition， there are other challenges like economic overcapacity， potential real estate bubbles， risks of local government debts， shadow banks， and restricted growth in non-public sectors and innovation. There is also the overarching need to restructure the economy - from one that has been factor- and efficiency-driven to one that is knowledge- and innovation-driven. These challenges， in the absence of the rule of law， could lead to excessive administrative interference， corruption and unfair competition. The land disputes in China’s southwest Yunnan Province are examples of how such conflicts arise. Due to the weaknesses of the current rule of law， the local government has the freedom to determine settlements and claims from such disputes， which end up in the hands of corrupt officials. Further on corruption， e-bribery for instance has become an example of how innovation in corruption has evolved in hidden ways. Beijing’s ongoing anti-corruption campaign， however， makes the plot against corruption a force to be reckoned with. Discussions on the rule of law should at the same time divorce power to the judiciary. A checking mechanism on the ruling party’s current operations would be a valuable outcome and a key tool to rebalancing the economy， which is currently skewed to benefit top Party officials.
A nation’s economic prosperity is strongly correlated with the nature and implementation of the rule of law， according to economists like Daniel Kaufmann who have evaluated the impact of the rule of law on the economy. While having the rule of law as a framework is ideal， strict enforcement of laws becomes the dividing factor between success and failure， and between enhanced or diminished competitiveness relative to other economies in the international trade and investment arena. For China to remain internationally competitive， making strides in the implementation of the rule of law will be pivotal.
Linchpin to the rule of law catalyzing Chinese economic growth will be the strict enforcement of the rule of law as well as greater legal awareness and consciousness among the public. It will achieve economic development， proper governance， cultural flowering and an enabling environment for the Chinese private sector to develop.