1. Introduction
The year 2019 marked the seventieth anniversary of the People’s Republic of China (PRC)—a socialist state established by the Chinese Communist Party (CCP) after winning a hard-fought war against “imperialism, feudalism and bureaucrat-capitalism.”Footnote 1 From the determined socialist transformation, the relentless Cultural Revolution to the groundbreaking Reform and Opening Up policy, Chinese people have experienced dramatic changes in China’s legal order since the fateful year of 1949. While, throughout the years, there has been considerable and consistent interest in exploring socialist China’s legal transformation, scholarship in socio-legal studies tackling the questions about how Chinese people (who are often perceived as passive subjects) relate to those enormous changes, especially how their legal consciousness adapts and transforms in response to socialist China’s legal development, remains surprisingly underdeveloped.
In this article, I intend to explore the impact of the legal transformations in China since communist takeover by illustrating the ups, downs, and struggles of Chinese enterprises, with particular focus on managers and what their responses reveal about their legal consciousness under highly volatile conditions of periodic draconian policies. The focus of interest on enterprise managers is attributable to the influence of socialist ideology, which is fundamentally concerned with revolutionizing the property ownership and production relationship, thus enterprises and their managers are inevitably placed “in the teeth of the storm where the wind and waves are the highest.” Compared with the vast majority of Chinese people, entrepreneurs and enterprise managers are one of the groups most receptive and responsive to drastic legal (especially socialist) transformations, being important members of the Chinese economy heavily impacted by regulatory and social changes. A focus on enterprise managers also provides a perspective of class in analysis, illuminating class struggles and concerns for class interest within the legal consciousness of Chinese people living under socialism.
Socialist China’s immense changes took off from fundamental reforms in private enterprises. From 1949 to 1976, practically all means of production together with the ownership, control, and management of private enterprises were gradually seized by the government in line with socialist doctrines of centrally planned economy.Footnote 2 Yet, after implementation of the Reform and Opening Up policy in 1978, planned economy and state management fell out of favour, and another wave of enterprise reform paved way for the comeback of private enterprises.Footnote 3 Through the introduction of a large number of laws, regulations, directives, and government-propagated social norms, the Chinese government in the reform era steered China away from hard-line socialism and, at a similar pace, the predominant forms of legal consciousness exhibited by China’s enterprise managers also transformed in response.
This article contributes to the scholarly research on legal consciousness by applying this lens of analysis to Chinese enterprise managers under socialism, with reference to Ewick and Silbey’s model of legal-consciousness narratives, representing the ways in which people respond to law and make sense of their experiences.Footnote 4 Apart from analyzing China’s legal development in the reform era after 1978, this study examines how enterprise managers responded to the dramatic changes in socialist China from 1949 to 1977—a time period that not many legal researchers have focused on—and unveils the nature of legality and functioning of legal order amidst the turmoil of revolutionary socialism. Observing how Chinese people are becoming more aware of their rights and are attempting to expand their influence on the communist state through economic impact and political persuasion, the current study further identifies and proposes a novel schema or narrative of legal consciousness “In the Law,” in which people perceive law as a game in which they can participate as “rule-makers” to influence the rules and protect their legitimate rights.
Legal-consciousness research represents a challenge to socio-legal scholarship, in the way that the inclusion of the complex nature of society provides a practical and useful yet challenging platform for understanding the nature of legality. The findings in this study illustrate how legality amidst rapid social changes is constituted by a multiplicity of legal models and legal consciousness, and the significance goes beyond to further acknowledge the limits of revolutionary legality and the instrumental view of law in authoritarian states.Footnote 5 Using the example of socialist China, we can see that the varied and alternating roles of law and social norms, coupled with the multifaceted aspects of legal consciousness, suggest that, even in relatively repressive political environments, people have demonstrated their power as legal actors participating in the construction of legality, rather than mere legal subjects under the complete manipulation of the governing regime.
This article is organized into five parts. Sections 1 and 5 are the introduction and the conclusion, respectively. Section 2 presents the theoretical framework in analyzing China’s transformation in legal order and consciousness during the earlier socialist era by adopting a schematic and narrative approach. Section 3 presents the research methodology and data source of this article for understanding the nature and background of the development of legal consciousness in socialist China. Section 4 is the longest part, which tracks China’s legal development and changes in legal consciousness from the perspective of Chinese enterprise managers since 1949 until today. It examines how social, legal, and political forces shape different forms and narratives of legal consciousness, as people have co-operatively, tactfully, subconsciously, and unwillingly responded to China’s top-down social and political transformations in the past seven decades.
2. The Chinese legal order and legal consciousness of Chinese enterprise managers
The study of legal consciousness has emerged out of a concern that law is not a stand-alone and impartial institutional device, but in reality is very closely interrelated and intertwined with society and its members. Concerned with people’s awareness, perception, understanding of, as well as response to, the legal system and institutional civil rights, legal consciousness as a concept is used to examine analytically the participation process in the production of legality,Footnote 6 and the process whereby people experience and comprehend the “meanings, sources of authority, cultural practices that are commonly recognised as legal.”Footnote 7 People interpret their experiences with reference to a collaboration of law and social structures,Footnote 8 but these interpretations may also be highly idiosyncratic, based on unique demographic and social attributes, and shaped by attitudes, motivation, and beliefs that are individually determined and reflective of personal experiences.Footnote 9 Therefore, legal consciousness as a research topic may be analyzed on the basis of different conceptualizations, ranging from stable patterns of ideas and attitudes that determine the form and interactions of social lives in relation to law,Footnote 10 epiphenomenal by-products of social structures,Footnote 11 and schemas embedded in history, culture, and belief systems influencing the meaning of social relations and practices.Footnote 12
Legal consciousness in the Chinese context is an area that provides plenty of opportunities for scholarly research. Previous scholarship has employed empirical methods to study certain specific social groups’ experiences, attitudes, and interactions with the law and their perception of legality.Footnote 13 The context of such works is often linked to the legal transformation accompanying China’s development and evolution after 1978, from a socialist planned economy to an open market economy.Footnote 14 For many research works, since China’s legal transformation has been government-led and executed in a top-down fashion, and both the training and professional roles of Chinese legal scholars have prompted them to focus on law “as centred in the state,”Footnote 15 legal consciousness is from time to time perceived to be embracing the concepts of “legal compliance”Footnote 16 and “rights consciousness”Footnote 17 (quanliyishi 權利意識). Sometimes, it is used as an indicator to evaluate China’s progress towards “proper” rule of law through the measurement of Chinese citizens’ escalating engagement with the law, as a result of continued efforts by the Chinese government to build a “socialist rule-of-law country” (shehuizhuyi fazhiguojia社會主義法治國家). The other times, it is related to the discussion of “rights consciousness” and “rules consciousness, and one key issue is whether the protests in contemporary China signify an emergence of rights consciousness exhibited by Chinese people that poses a challenge to the communist state,” or merely some demand to stop abusive rule enforcement that involves no challenge to the legitimacy of the regulatory regime.Footnote 18
While the analysis and application of legal consciousness in the Chinese context provide instrumental value especially in the policy area, the way in which it is commonly theorized as a one-dimensional spectrum, in which Chinese people are predicted to evolve incrementally from “low” to “high” consciousness as a result of China’s transformation towards legal modernity, somehow consolidates a “linear conception” of the construct.Footnote 19 This conceptualization lacks sufficient capacity to appreciate the diversity of legally oriented phenomena and it is prone to casting individuals as agency-lacking legal subjects of “civilising projects,”Footnote 20 strengthening the Chinese government’s instrumental view of governance regarding the nature of law.Footnote 21
Furthermore, existing studies are predominantly concerned with changes after the Reform and Opening Up policy was launched in 1978. Not much attention has been devoted to the earlier era of socialist planned economy, namely from the CCP’s establishment of the PRC in 1949 until 1978. The turbulent years of mass political campaigns and turmoil from 1958 to 1977 are perceived as the era of “legal nihilism,” in which the whole nation was overrun with social disorder, chaos, and, to a great extent, lawlessness.Footnote 22 This unique historical period, which consists of some very drastic social and legal transformations, seems to bear limited significance for legal researchers. There are in existence some significant scholarly studies analyzing the legal engagement of Chinese people in their interaction with the state during the reform era.Footnote 23 Yet, there is a need for a more in-depth analysis of the changes in legal order and legal consciousness in China within the pre-1978 period, in particular about the causes, characteristics, processes, and underlying rationale of such changes.
To address the above concerns and make use of the legal-consciousness construct in a different manner, this article applies the theoretical contribution of Ewick and Silbey to provide a novel perspective to the study of legal consciousness in China. Different from attitudinal and structural approaches that conceptualize legal consciousness as individualized “bottom-up” phenomena, collective attitudes emerging out of an individual’s aggregated actions or “top-down” by-product of social structures, Ewick and Silbey draw upon a constitutive perspective and point out that legal consciousness should “document the forms of participation and interpretation through which actors sustain, reproduce, or amend the circulating (contested or hegemonic) structures of meanings concerning law.”Footnote 24 Therefore, law is understood as an internal feature of social situations, rather than simply an external autonomous force,Footnote 25 and individuals are not merely passive legal subjects, but active participants who play a vital role in collectively participating in the construction of legality through their experience and interaction with the law. Legality, the “meanings, sources, authority and cultural practices that are commonly recognized as legal,”Footnote 26 is not merely a determinate aspect of social structures and relationsFootnote 27 ; it also emerges and gains hegemonic power and consent from society, as a result of the interplay of various narratives about the character of law.Footnote 28 The attempt to comprehend how legality is experienced and understood by people as they avoid, reject, or get involved in the law represents one of the key objectives in studying legal consciousness.Footnote 29
To better dissect and interpret the sometimes multifaceted, contradictory, and variable forms of legal consciousness,Footnote 30 Ewick and Silbey developed a useful typology and they identified three narratives of legal consciousness: “Before the Law,” “With the Law,” and “Against the Law.” Along the same line of thinking and by observing civil disobedience and lawbreaking phenomena within radical environmental groups, Fritsvold identified “Under the Law” as an addition to the typologyFootnote 31 :
There are a few potential issues with a narrative-based typological approach for analyzing legal consciousness. Typological thinking is a systemic approach that encompasses the representation of phenomena by using classification and grouping methods based on idealizations and clustering,Footnote 36 and it can facilitate explanation, investigation, and theorizing by abstraction and generalization, at the same time assisting in the exploration of new types and ideas. But, as the clustering process requires grouping of subjects with common and distinguishable key characteristics and features, typologies may fall prey to essentialism, assuming that a certain set of attributes do not change over time.Footnote 37 The use of a typological approach may also risk a tendency to overly simplify and characterize observed objects and phenomena. Over-schematization causes the exclusion of pertinent information, directly focuses on things that confirm pre-existing beliefs, and contributes to stereotyping.Footnote 38
Nevertheless, it is important to note that consciousness by nature is complex and multifaceted. When commonalities are observed, typified, and theorized, a typological approach can incorporate a more holistic principle of inquiry into the research of consciousness and, according to Engel, one major attraction of consciousness as a research topic resides precisely in the “commonalities to typify the ways groups of people or entire culture approach, use and think about law.”Footnote 39 This study recognizes that human perception, attitude, preference, and behaviour change over time, and essentialist assumption is not applicable, since the legal consciousness of Chinese enterprise managers is observed to transform as a result of China’s legal development throughout the years.
Taking into consideration the risk of over-schematization, this study also recognizes that the experience, beliefs, and attitudes of people produce stable yet malleable systems,Footnote 40 and narratives are not mutually exclusive, but plural and variable across different contexts.Footnote 41 Ewick and Silbey’s typology is meant to oversimplify legal consciousness not as a discrete set of options,Footnote 42 but rather as a culturally available schema to be referenced and employed in different ways and at different times, because the complexities and contradictions in legal consciousness are what make legality a type of social practice, and therefore a producer of social structures.Footnote 43 As further illustrated by Fritsvold, the legal consciousness of any individual is unlikely to be entirely bound within one category, but is often in contradictory forms and embraced simultaneously.Footnote 44 Separate characterizations of law, which are drawn upon and reproduced in a routine fashion, do exist at the same time in the same group of people.Footnote 45
Following the work of Ewick and Silbey, there is a growing body of scholarship that has taken up the challenging task of analyzing the complex nature and orientations of legal consciousness.Footnote 46 As a theoretical approach that belies either the attitudinal or structural approaches to consciousness,Footnote 47 the use of Ewick and Silbey’s model in this article enables the acknowledgement of Chinese people’s active legal role and power through their participation in the process of constructing and sustaining legality,Footnote 48 and serves as a response to Silbey’s call for legal consciousness to be used as an analytical construct to explain the relationship between consciousness and hegemonic legality.Footnote 49 The approach also provides an effective mechanism for exploring the legal order in China before 1978 (when law in the stricter jural sense was at times non-existent) and hence generates a more comprehensive understanding of the perplexing dynamic of changing legal consciousness in the years of socialist China.
Since one key objective of this article aims to convey a more complete picture of socialist China’s legal transformation, instead of adopting the more “traditional” stance to understand pre-1978 socialist China as a lawless land of frantic communism, this article, with reference to the works by Leng and Li, suggests that socialist China before 1978 should be comprehended as a unique legal order, where two different models of law had coexisted and competed with each other simultaneouslyFootnote 50 :
In the context of socialist China, law according to the jural model, other than state laws, also includes state plans and policies, especially during the earlier years of the PRC when the new socialist legal system was still at its embryonic stage. In addition, moral standards and public opinions have always served as important societal alternatives to formal law throughout China’s legal transformation since 1949 until recent years.Footnote 53 The prominence of societal laws reached its peak during the pre-1978 era, when a series of mass political campaigns, including the Cultural Revolution, were launched to effect tremendous social changes, and the rise of the societal model was frequently accompanied by the downfall, and even destruction, of the jural model.
Despite the impact of formal and written laws in shaping people’s legal consciousness, as the jural and societal models of law have exchanged positions in the Chinese legal order throughout the years, greater attention should be paid to the unofficial or customary rules in studying the construction and transformation of legal consciousness in socialist China.Footnote 54 The legal consciousness of Chinese enterprise managers has been constantly evolving in the midst of their experience, perception, and interaction with the prevailing model of law, and the “external apparatus” of radical efforts powered by an authoritative government to establish and consolidate legality. Facing an immensely powerful socialist state, Chinese enterprise managers, far from being merely passive subjects, have always been taking active roles in understanding, constructing, and sustaining legality through various aspects of their social lives and relationships.Footnote 55
3. Methodology
This article is written based on extensive archival research conducted in Hong Kong from 2017 to 2019. The principal data source for this article is library materials including books, journal articles, historical laws, and newspapers, in particular the People’s Daily, the official newspaper of the CCP, from 1949 until today. I made substantial use of the “Database for the History of Contemporary Chinese Political Movements” (中國當代政治運動史數據庫系列) published by the Chinese University of Hong Kong’s Universities Service Centre for China Studies and Harvard University’s Fairbank Centre for Chinese Studies, which contains a significant number of primary sources including government documents, directives, bulletins, speeches by CCP officials, major newspaper editorials, notices, instructions, and proclamations that cover a large context of socialist China’s mass political campaigns. I used the qualitative research software NVivo for assisting in the process of organizing and analyzing archival materials.
Archival materials were used in this research for a number of reasons. As indicated by the works of Lovell and Şerban, the archival method is a suitable means for studying legal consciousness in the historical context, when historical materials can reveal prevailing ideas about law and justice during specific time periods.Footnote 56 I also conducted archival research in view of the inherent difficulties in retrieving empirical data. Identifying, locating, and interviewing Chinese people who were enterprise managers decades ago is very difficult, and people’s recollection of memories about past attitudes and perceptions is likely to be inaccurate and distorted from time to time by their subsequent life experiences. Therefore, through the examination of literary evidence, this article uncovers the actions taken and nature of legal consciousness exhibited by Chinese enterprise managers during particular time periods to provide a realistic historical account of the changing legal consciousness in socialist China.
One of the limitations of this research is the use of secondary rather than primary sources. Socialist China had very limited contact and interaction with the rest of the world from 1949 to 1978, and the mass political campaigns remain a sensitive issue in China. This makes access to primary sources tremendously hard. Nevertheless, the secondary materials, in particular the “Database for the History of Contemporary Chinese Political Movements,” which contains a large proportion of official CCP official materials intended for internal reference, record, and reflection, provide vivid depictions of Chinese enterprise managers’ perceptions, attitudes, and behaviours, and they are able to serve as an invaluable data source for analysis from a new perspective. Apart from identifying, reading, and organizing the materials, I have also made translations from Chinese to English during data analysis, and this has proven to be quite challenging, especially in the securing and retainment of the original meanings as much as possible. Literal verbatim translation is used in this article for Chinese slang words and phrases, and appropriate explanations are given when necessary.
4. Legal consciousness of Chinese enterprise managers: from 1949 until today
4.1 Socialist transformation (1949–57)
The Chinese Civil War ended with the victory of the Chinese communists over the anti-communist Kuomintang government in 1949. After the communists came to power, they swiftly initiated a number of social-engineering projects to drive China towards socialism. The old judiciary system, including all laws and decrees of the Kuomintang government, were abolished and replaced by a new “people’s judiciary system.”Footnote 57 A nationwide People’s Court system was created and influential substantive laws such as the Marriage Law, Trade Union Law, and Land Reform Law were promulgated with a view to fundamentally transforming Chinese society. During these early years of socialist transformation, the new jural model of socialist law was still at its infancy stage. The distinction between jural and societal models of law was unclear, and flexible means were implemented to achieve the desired objectives.
In the postwar Chinese society, the fate of 1.3 million private industrial and commercial businesses was laid upon the hands of the Communist Party.Footnote 58 Through the promulgation of new enterprise-regulation laws, entrepreneurs of private enterprises were gradually compelled to give up the ownership and management powers over their properties and production means.Footnote 59 By 1957, most Chinese enterprises and factories had been reformed into joint state–private ownership, subject to the jurisdiction of government-imposed plans and regulations. Enterprise managers were left with a limited degree of freedom to design, implement, and fulfil enterprise plans. Issues pertaining to enterprise management such as wage scales, prices, taxes, working conditions, and manpower all became subservient to central government’s master plans.Footnote 60
At the onset of socialist China’s transformation towards public ownership, the vast majority of Chinese businesses were predictably worried about the direction and policies of the new regime. As legal consciousness, which is developed and displayed by legal actors caught in complex social and legal settings, can at times be multifaceted,Footnote 61 Chinese enterprise managers at that time embodied legal consciousness that perceived socialist transformation as an inherent threat to self-interest and sought ways to circumvent it, which resemble the “With the Law” and “Against the Law” prongs of legal consciousness. While most of them, on a prima facie basis, appeared to embrace the new legal and social arrangements, the reluctance and resistance to change were inevitably sturdy and extensive, and that is why, when behind closed doors, many people were full of complaints and seriously disgruntledFootnote 62 :
The boat is already in the river [meaning “the die is cast”], there is no other alternative but to embrace (the change).Footnote 63
It is against the law to disobey the mass line (of socialist transformation), we need to express superficial agreement with the trend, but then just procrastinate for as long as we can.Footnote 64
The state plan is important, but our own plan is also important, we cannot let the state plan destroy our own plan.Footnote 65
As the result of their doubtful and uncooperative attitude towards socialist transformation, the prominent legal consciousness of managers and owners in Chinese enterprises during this period showed widespread adaptability, perseverance, manipulation, and resistance.Footnote 66 Under the new regime of increased state control and interference in management, although some enterprise owners and managers were willing to comply with aspects of the new legal arrangements (displaying “Before the Law” consciousness), other owners and managers exhibited “With the Law” consciousness, in the attempt to manipulate the law-enforcement process and facilitate self-interest. Influenced by the traditional Chinese business mentality and cultural legacy of “guanxi” (interpersonal relationships),Footnote 67 and with limited knowledge of liberal legal orders in which integrity is valued as universally respected ground rules of the law-game,Footnote 68 Chinese enterprise managers were less ethically bound with respect to the forms of transactions with the law and its enforcers. Corruptions and briberies were widespread: rebates, valuable gifts, and even women were used to bribe enforcement officers including state and local government merchandisers and tax officers.Footnote 69 Offering his concubine to a police officer, a Chinese manager was exhibiting a legal consciousness that treated law as a commodity to purchase “protection” and “care” from police officers:
We [Teng and the police officer] are pretty good brothers. If you like your sister-in-law [Teng’s concubine], just ask her to go with you. If you don’t have enough in your daily life, I can help make up for it, what you need to do is take care of your brother [Teng] when he’s doing his business.Footnote 70
Deeming the socialist transformation as untrustworthy and arbitrary, some Chinese businessmen felt that, despite having previously complied with the new arrangements, they had been caught within and even cheated by an apathetic and unjust external force in society:
Why didn’t they talk about the mass line (of socialist transformation) in 1949? If they talked about it then, we would have run away … we lost a bit by assisting in purchasing and selling, we lost half by taking the processing and manufacturing projects, and we lost it all by joint state-private ownership.Footnote 71
Being resentful towards state encroachment but feeling powerless against it,Footnote 72 entrepreneurs and managers began to employ resistance to the authority, which resembled traits of “Against the Law” legal consciousness. While discontent with the changes that state plans and contracting arrangements were becoming the norm in business, they also discovered new opportunities for state property misappropriation, frauds, deception, and theft under the new system.Footnote 73
The resistance of enterprise managers bore the characteristics “to experience autonomy, to experience oneself as planning against one’s opponent, and to interpret the situation as avoidable or controllable.”Footnote 74 State-affiliated institutions were perceived as opponents by which the state could be outsmarted by meticulous planning and crafty tactics. To grasp control of future situations and exploit state plans and policies for personal gain, “undercovers” were sent to the state bureaus and state-owned enterprises for extracting confidential information and collaborating in deceptive schemes.Footnote 75 When engaging in production in the fulfilment of government-contract obligations, state-owned resources were appropriated to manufacture products to be sold for private profit, or replaced with low-quality materials to deliver substandard products.Footnote 76 Inspection certifications were altered to manipulate prices and cover up jerry-built projects.Footnote 77 Tax evasion was also extremely prevalent. It was estimated by the Chinese Tax Bureau that, in the year 1950, 99% of profit tax payers in Beijing and 82% in Tianjin, two of China’s then commercial and industrial hubs, were involved in tax-evasion behaviours, and the amount often constituted more than 50% of the tax liability.Footnote 78
With communist officials furious over the responses of Chinese enterprises and the capitalist class towards socialist transformation, the communist government in 1952 launched the Five Antis Campaign (wufan yundong 五反運動) to struggle against the “unbridled attacks by the capitalists” and eliminate the “five poisons” of bribery, theft of state property, tax evasion, cheating on government contracts, and stealing of state economic information.Footnote 79 Although the campaign aimed at upholding state laws and curbing criminal and illegal activities, the campaign itself was an intriguing mixture of societal and jural models of law.
Initially, the masses, especially workers, were mobilized to expose and report illegal activities allegedly committed by the capitalists. Without clear guidance as to the nature and seriousness of the “crimes,” the masses relied on social norms and common-sense values, and, through negotiations, coercion, and threats, business owners and managers were forced to reveal and acknowledge their “crimes.”Footnote 80 After all “suspects” were caught, the campaign entered the next stage at which the government promulgated the “Standards and Methods for Classifying and Dealing with Industrial and Commercial Units in the Five Antis Campaign”Footnote 81 to designate different sentences and forms of punishment for suspects with varying degrees of seriousness of their “crimes.” Shocked and terrified by the harshness and unpredictability of the campaign, Chinese enterprise managers thereafter lost the willpower to resist the socialist transformation, and gradually became compliant and subservient to the authority of the communist government.
In the later part of the socialist transformation period from 1954 to 1957, China’s jural model of law began to experience rapid redevelopment. A Constitution was adopted to institutionalize the legal system, comprising the judiciary, procuracy, and public security office.Footnote 82 Principles like “right to defence,”Footnote 83 “judicial independence,”Footnote 84 “equality before the law,”Footnote 85 and “freedom from arbitrary arrest”Footnote 86 were written into the Constitution. Efforts were made to formalize legal procedures: regulations on arrest and detention were promulgated,Footnote 87 and a draft Criminal Procedure Code Bill was published at the same time.Footnote 88
Although China witnessed a growth in the jural model of law that portrayed a much clearer distinction between the jural and societal models, the growth also sowed the seeds for its future demise and eventual destruction. Mao Zedong (Chairman Mao), the de facto leader of China who was a firm believer that governance and development should be driven by enthusiasm of the mass rather than rigid written laws, became increasingly discontent with the situation. As the legacy of mass campaigns and arbitrary law enforcement in socialist China was powerful, within a few years, the Chinese legal order would experience an overwhelming resurgence of the societal model of law, and the demolition of the still-developing jural model.
From the founding of socialist China, Chinese enterprise managers witnessed an unprecedented transformation towards a new legal order. Rather than ceremonially accepting their fate as passive subjects, they demonstrated craftiness and resilience in their interactions with the new regime, and proactively participated in social relations to construct and sustain legality in the new legal order. With a perception of legality as “engagement and conflict, resource and process,”Footnote 89 they utilized their capabilities and resources to engage with the law to secure pre-determined outcomes, protections, and benefits. As they also perceived legality as a trick, a net in which they were trapped,Footnote 90 they attempted to avoid legality by various means of resistance to outwit the unpredictable and relentless system of perceived state oppression against businesses and industrial enterprises. However, such behaviours were met with brutal and capricious repression by the communist authorities in the form of mass political campaigns, and these means would be elevated to a whole new level in the forthcoming years.
4.2 Mass mobilization campaigns (1958–77)
Mass campaigns like the “Five Antis” during the period of socialist transformation laid and consolidated the political and social foundation of socialist China, of which policies and directives were implemented and enforced by mobilizing the mass.Footnote 91 This model reached its peak from 1958 to 1977, when the communist government launched a series of political campaigns including the Anti-Rightist Campaign (fanyou yundong 反右運動), the Great Leap Forward (dayuejin 大躍進), and the Cultural Revolution (wenhua dageming 文化大革命). While these campaigns served diverse political purposes, they shared similar characteristics that were marked by the emphasis on widespread participation and radical yet submissive behaviour of the mass, austere criticism and oppression of intellectuals and capitalists, as well as the substantial demolition of the jural model of law and shift towards the societal model.
In 1958, as socialist China was on its ways towards a more formal and institutionalized legal system, Chairman Mao, the supreme leader, was unimpressed with the development. He declared his dissatisfaction and frustration during the Beidaihe (北戴河) conference (held by the Central Politburo of the CCP) in the same year: “We cannot rely on law to rule the mass, for the mass they need to form a convention. Every single one of our resolutions is law …. The role of ideology, worldview, methodology, newspaper and education is significant.”Footnote 92
Chairman Mao’s attitude towards law in the jural sense quickly altered the track of China’s legal development. In 1959, at the height of the Great Leap Forward campaign, the Ministry of Justice and Ministry of Supervision were abolished. Considered obstacles hindering “improvement of the enthusiasm of the masses and development of productivity,”Footnote 93 many regulations were revised or repealed outright. There was such a pronounced transformation in the legal order and perception of formal laws in China that, within a few years, the embodiment of “Under the Law” consciousness towards jural laws became prominent in Chinese society.
During the Cultural Revolution, laws and the legal system of the jural model became synonymous with the counter-revolutionary, bureaucratic, and capitalist way, actively perpetrating injustice and “reactionary” values. The Red Guards, under the instructions of Chairman Mao, were instigated to demolish the police, procuratorate, and court system (gongjianfa 公檢法), as these were perceived as illegitimate entitles suppressing the “revolutionaries” in order to preserve a rotten social order and advance the interests of the bourgeois class. Tens of thousands of police, procuracy, and court officers were persecuted, and both the police departments and procuratorate were taken over by the military with very limited function remaining for courts. Law-making basically ceased, and only one national law was passed by China’s legislature, the National People’s Congress (NPC), during the years of the Cultural Revolution.Footnote 94
Similar upheaval was also observed in enterprises and industries. The Great Leap Forward saw the downfall of enterprise managers and experts, and management power was reassigned to CCP officials. Lacking management experience and specialized knowledge, most of the enterprises were inadequately and inefficiently managed, and, as a result of such mismanagement, problems like disrupted production, directionless leadership, and disorderly operation emerged,Footnote 95 which contributed to the subsequent disastrous famine that killed millions. To rectify the situation, in 1961, the Chinese government proposed the State-Owned Industrial Enterprise Working RegulationsFootnote 96 (also known as the “Seventy Articles on Industry”) to re-establish a regulatory framework for enterprises and industries. Under the “factory manager accountability system,” Communist Party officers retained authority and decision-making power over major planning and ideological matters, but the command authority of production and management was delegated to factory managers.Footnote 97 Enterprises could establish their own enterprise rules and systems with respect to planning, management, quality control, safety standards, and remuneration.Footnote 98 Members of enterprises were obliged to abide by enterprise rules that could not be subject to arbitrary revisions, and serious violations would result in criminal punishment imposed by courts.Footnote 99 Unfortunately, the effort to reconsolidate the jural model of law in enterprises did not last long. After the outbreak of the Cultural Revolution, Chairman Mao, through party media, declared his directives to the mass and called for the establishment of a new order in the industries:
Establish three-in-one revolutionary committees, engage in mass criticisms, clean classes, reorganise the Party, streamline the institutions, reform unreasonable systems of rules and regulations, send departmental staff to the fields. Struggle, criticism and reform, these are the stages to be experienced.Footnote 100
Under the direction of Chairman Mao, workers, Red Guards, and “revolutionaries” swiftly seized management power from managers, technical experts, and Communist Party officers.Footnote 101 Revolutionary committees were established to manage the enterprises and factories, while the original management personnel were labelled as “rightists.” They became the subjects of “class-cleaning,” forced to face mass criticisms for their “crimes,” and were sent for “re-education.”Footnote 102 Equipped with “Under the Law” consciousness towards jural law and influenced by communist ideologies, “revolutionaries” as enterprise managers possessed a fundamental distrust of the existing enterprise rules, which were perceived as tools of the corrupt capitalist class to enslave workers:
The previous rules and regulations of this factory have followed the line of “expert management,” and they imposed ruling, blocking, deduction and punishment on the workers.Footnote 103
Marxists believe that different classes always formulate rules and regulations in accordance with their class interests and serve to consolidate their rules. In capitalist enterprises, the systems of rules and regulations formulated by the capitalists must be based on the interests of the capitalists.Footnote 104
As the response to Chairman Mao’s call for “streamlining of institutions” and “reforming systems of unreasonable rules and regulations,” enterprise rules were obliterated to such an extreme that, in some factories, even the safety unit was abolished.Footnote 105 Although a few enterprise rules remained, no longer were they formal and strictly enforced; the jural model had fallen out of favour and been replaced by a belief in the power of the mass to “liberate themselves and manage themselves.”Footnote 106
With the functions of formal laws and regulations reduced to minimal, China became a country chiefly governed by societal law: social values and political pressure. Maoism and communist ideologies became the “highest directives of all actions.”Footnote 107 Acceptable “legal” behaviours and punishable “illegal” conducts were informed and imposed arbitrarily by the leading figures of the CCP.Footnote 108 As described by Deng Xiaoping later in 1978: “[We] used the words spoken by the leader as ‘law,’ anyone who disagreed with the leader’s words was ‘breaking the law,’ and when the words spoken by the leader changed, the ‘law’ changed accordingly as well.”Footnote 109
Through a policy called the mass line, the CCP at all administrative levels maintained close contact with the mass to propagate policies and instil communist values. Chinese households were organized into small groups of “neighbourhood committees.”Footnote 110 Regular meetings were held for political study and discussion, during which people engaged in criticism of the self and others with regard to their attitudes and degree of compliance with communist values and government policies.Footnote 111 In court trials, judicial officers sought opinion from the masses, as observation of law and regulations was based on political consciousness.Footnote 112 Wrongdoers who committed minor offences were first corrected by persuasion before punishment, and public supervision became a form of sentence for minor offences.
China’s way to socialism was also a leap towards embracing the societal model of law. In Chairman Mao’s idealistic society, laws are replaced by virtuous communist values, and everyone strives for the common good with “utter devotion to others and without any thought of the self.”Footnote 113 Nevertheless, after demolition of the jural mode of law and legal system, numerous incidents instead exemplified the remnants of “With the Law” consciousness towards societal laws that were supposed to promote the virtue of selflessness. Following Chairman Mao’s orders, “revolutionaries” had revolted against and seized power from state institutions. However, out of self-interest and intense disputes over the degree of loyalty and accuracy in interpreting Chairman Mao’s teachings, many “revolutionaries” quickly divided into fractions and started to struggle violently against each other.Footnote 114
In the context of enterprises, although it was emphasized by Chairman Mao that every “revolutionary” must “economise when making revolution” that corruption and waste are a tremendous crime,Footnote 115 many “revolutionaries” who secured their power and position in enterprise management responded tactfully to the powerful societal rules. Collective resources assigned for manufacturing uses were misappropriated for building entertainment halls; displays of splendour, lavishness, and wasteful spending were common.Footnote 116 In a society governed almost exclusively by informal laws and social pressure, the deprofessionalization and deinstitutionalization of law meant that courts or other mechanisms of social control were hardly capable of making objective and consistent judgment. Rather, they were subject to manipulation and deception, and radical moves were used to achieve various purposes, even in the name of approval and acknowledgement from the highest authority of the state.
Chairman Mao’s death in 1976 led to the end of the Cultural Revolution, as well as the Maoist revolutionary era. In 1978, Deng successfully consolidated his position as the paramount leader of China and began to move the communist government from “upholding class struggle as key principle” towards concentrating on economic development.Footnote 117 In subsequent years, the world witnessed China’s dramatic transformation from a hard-line socialist centrally planned economy towards a market economy marked by dominance of state-owned enterprisesFootnote 118 with an increasingly powerful private sector, with private rights and interests lawfully protected by the socialist state.Footnote 119
4.3 Reform and opening up (1978–present)
The Cultural Revolution shattered China’s laws and legal system, diverging much further from the jural model. After adopting the Reform and Opening Up policy (gaige kaifang 改革開放), the Chinese government swiftly acknowledged the importance of a sound legal framework as the backbone for a market economy, and law was (and still is) perceived as an important instrument in facilitating economic development and regulating commercial activities.Footnote 120 The court system was re-established and public order was restored. In the context of business and industrial enterprises, the Provisional Regulations on State-owned Industrial Enterprises were promulgated in 1983,Footnote 121 which to a large extent returned to the position established by the State-Owned Industrial Enterprise Working Regulations, but it went further to explicitly empower enterprise management with decision-making authority in terms of profit-related decisions such as procurement, sales, price, patent, and profit retention.Footnote 122
From 1978 onwards, state-owned enterprises have been restructuring towards increased separation of management from state ownership and control.Footnote 123 Private enterprises have also been growing exponentially with promulgation of the Company LawFootnote 124 and establishment of a regulatory system. Within the course of two to three decades, China had established from scratch a comprehensive jural model of laws for regulating enterprises. The portfolios of Chinese enterprise managers also diversify greatly. Communist Party officials are increasingly giving way to entrepreneurial managers and experts. Millions of new entrepreneurs are setting up, owning, and managing their own companies. By 2017, China had about 27.26 million private enterprisesFootnote 125 and the private sector contributed more than 60% of the country’s gross domestic product growth and generated over 80% of the jobs.Footnote 126
Thirty years of a Soviet-style command economy had left China with a complicated and inefficient system of governance. To swiftly establish a regulatory framework for achieving marketization, laws and regulations have been drafted and promulgated in a very “efficient” manner and there are numerous problems regarding the interpretation, implementation, and enforcement of the law. Larger enterprises are subject to rules and policies of different ministries, and often there are contradicting policies that leave businesses confused and susceptible to unintentional violations.Footnote 127 Many existing rules are already ambiguous in nature, and stakeholders including the authorities are uncertain as to what rules should apply in specific situations.Footnote 128 Therefore, laws are often arbitrarily enforced without uniform standards,Footnote 129 and enforcement actions are open to various kinds of renegotiations and appeal.Footnote 130 As a response to the very nature of China’s regulatory framework, in addition to basic law-abiding behaviours that resemble traits of “Before the Law” consciousness, many Chinese enterprise managers have developed strong forms of innovative, proactive, and risk-takingFootnote 131 legal consciousness towards the jural laws, which bear characteristics of “With the Law” consciousness.
Contrary to the early years of socialist transformation, China since 1978 has been on a path towards the relaxation of state control and establishment of a formal and codified system of law. Instead of outright resentment and resistance towards the regulatory regime, Chinese enterprise managers are demonstrating tactful and adaptable behaviour to the problems as well as opportunities poised by the regulatory system in pursuit of enterprise survival.Footnote 132 Since laws are vague and conflicting, and information is often incomplete and unreliable,Footnote 133 other than exploiting the legal loopholes and ambiguities, Chinese managers are actively seeking to contest the law by employing “substitutes” to override government policies.Footnote 134 In an emerging market economy that “with money you make a ghost work the grindstone,” pecuniary benefits and gifts are used to gain and secure favourable treatment. Despite the risks involved, it is essential for enterprise management to proactively play the game and maintain stable “guanxi” with them, as put forward by some entrepreneurs and factory managers:
If something is not explicitly prohibited, then move ahead.Footnote 135
You do not bribe them, of course. You only ask them to take some “souvenirs” with them after they attend the meeting in a summer resort or a tourist city.Footnote 136
Moreover, since rules are often ambiguous, ineffective, and lacking in details regarding standards, mechanisms, and procedures, some managers exude flexibility in their interactions with the law: “The best managers are always one step ahead of the law. The state regulates the treatment of workers, but my superiors in the bureau won’t be pleased if workers’ welfare does not improve.”Footnote 137
In many cases, especially labour issues, preserving good “guanxi” and pleasing the regulatory authorities were considered more important that black-letter requirements of the law. Similarly, formal legal requirements were not the most influential factor in maintaining labour-management relationships and settling potential disputes,Footnote 138 especially in the earlier years of the reform period. The Labour Law promulgated in 1994 compelled the use of labour contracts, but it was surveyed in 2005 that fewer than 20% of small and medium-sized enterprises in China were using labour contracts.Footnote 139 With Chinese managers preferring flexibility, “particularism,” and “communitarianism” in labour management, Chinese managers tend not to use standardized procedures to govern relationships and resolve problems, as they perceive the enterprise as a community in which collective harmony is a primary concern to encourage teamwork and performance.Footnote 140
On the other hand, laws in the societal model sense have continued to assume a role in post-1978 China. The transformation from radical socialism to embracing market economy had been a rapid process, and the communist government allegedly observed a widespread “spiritual pollution” (jingshen wuran 精神污染) among the Chinese people, exuding “hedonistic and egotistic characteristics in forms of material excess and spread of the spirit of corruption.”Footnote 141 Therefore, since the 1990s onward, it has launched many campaigns to raise “socialist cultural-ethical standards” (shehuizhuyi jingshen wenming 社會主義精神文明). Enterprises as participants are required to align their values with official doctrines.Footnote 142 Entrepreneurs and business managers are expected to assume responsibilities as “socialist entrepreneurs” to embrace appropriate “political qualities,”Footnote 143 including collectivism, anti-mammonism, and the emphasis on non-pecuniary motivation and welfare of workers.Footnote 144
From the later years of the reform period until now, as China’s enterprises have been exerting a greater impact on society, the importance of “socialist cultural-ethical standards” has gradually been overtaken by the more comprehensive concept of corporate social responsibility (CSR).Footnote 145 Whilst CSR is generally viewed as the voluntary effort of businesses to comply with ethical and societal values beyond regulatory requirements,Footnote 146 in China, a state-centric model is adopted in promoting business ethics.Footnote 147 In addition to reliance on market forces and societal pressure, the Chinese government has also initiated a series of policies to regulate, supervise, and promote CSR in Chinese enterprises.Footnote 148 The use of regulatory requirements to expand the social licence of CSR exemplifies the inversely proportional relationship between jural and societal models of law in China, which has been a characteristic of China’s legal transformation since the communist takeover in 1949 until today.
It may be unsurprising that the attitude of Chinese enterprise managers towards societal rules in general is similar to that towards jural laws. Whereas most factories had implemented non-pecuniary motivation and promoted the spirit of collectivism in the form of emulation committees to appraise, commend work performance, and promote friendly competition among different work units,Footnote 149 these efforts are more like tricks to boost productivity and profit rather than compliance with societal and governmental expectations. Despite the call for collectivism and “upholding workers as owner of enterprises,” many workers are having their labour rights violated in forms of forced labour, subsistence wages, corporal punishment, and substandard safety practices.Footnote 150
The moral programmes being ideological in nature and partially at odds with the capitalistic market reform agenda had not been very effective in restraining behaviour.Footnote 151 As for CSR, it was estimated in 2012 that, among the top 100 enterprises in China, over 60% could be categorized as “bystanders” and had not initiated any CSR practices.Footnote 152 Many enterprises adopt deceptive strategies such as double-bookkeeping to meet CSR standards in fraudulent ways and maintain their own economic interests.Footnote 153 The situation of CSR in China can be attributed to the clash between Confucian values and dimensions of CSR,Footnote 154 and the principle-based approach of Chinese CSR laws and regulations that lacks clarity and enforceability.Footnote 155 These reasons also contributed to the emergence of the “With the Law” consciousness of Chinese managers, among other categories of legal consciousness, with respect to constructing a legality of societal rules characterized by uncertainties, flexibilities, and self-interested manipulations.
In recent years, many Chinese enterprises have been taking bolder strides in their survival strategies. By getting themselves increasingly involved in politics and exerting influence in the policy- and law-making processes, it is plausible that Chinese enterprise managers are starting to exhibit a kind of legal consciousness that goes beyond the scope of “With the Law” consciousness—getting themselves involved “In the Law” and exerting an influence on the making of laws and policies.
4.4 “In the law”: the emerging consciousness?
In 2001, then Chinese President Jiang Zemin proposed a new political theory known as the “Three Represents” (sangedaibiao 三個代表), which hailed enterprises as the “advanced social productive forces” of China. This in effect opened the door for capitalists and entrepreneurs to join the communist establishment and become involved in politics. The Chinese government has since kept up this momentum to launch a series of institutional changes,Footnote 156 including the amendment of the Constitution in 2004, for enhancing the status of entrepreneurial business owners and managers.Footnote 157 With the government’s ongoing emphasis on the importance of entrepreneurship,Footnote 158 Chinese entrepreneurial managers are moving beyond “With the Law” consciousness to establish more active presence and interaction with the law.
Within merely a decade, political participation to advance business interests has become a common phenomenon in China.Footnote 159 Entrepreneurial managers in China continue to perceive legality as an arena of competing wits and capabilities, but no longer are they content with their role as mere players who must keep on devising ways to creatively comply with or override the rules. Numerous private entrepreneurs are participating in politics as de jure government advisers and law-makers by serving as members of the Chinese People’s Political Consultative Conference (CPPCC), China’s highest advisory body, and the NPC.Footnote 160 As described by a Chinese entrepreneur regarding his multiple roles and political involvement:
As an entrepreneur, I need to run the company well, generate wealth and increase employment opportunities. As president of the All-China Federation of Industry and Commerce (ACFIC) [a business association], we must continue to serve as the bridge between the Party and private sector, and unite private enterprises … as Vice Chairman of the CPPCC, I must bring the views of ACFIC and other groups to the CPPCC, participate in politics, listen to the voices of the people and reflect public opinion.Footnote 161
“With the Law” consciousness constructs legality as a game with a set of designated rules of which the outcomes are contingent and uncertain. Chinese entrepreneurs and managers are struggling both legally and illegally to cope with the rules, but they are also pursuing opportunities for participation to influence enforcement of the rules and the rule-makers themselves, in an attempt to gain favourable treatment and prevent the rules from working against them. In a regulatory regime with relatively inadequate transparency, consistency, and protection, participating in politics is the rational means to secure favourable policies and institutional resources, and reap pecuniary benefits like tax advantages and increased deals,Footnote 162 as well as to reduce uncertainties in the regulatory regime that may pose serious and unanticipated threats to the interest and survival of enterprises.
Since preferential treatment and legal immunity are furnished to entrepreneurial members in the communist establishment who hold close ties to the CCP officials, control massive business resources, and possess gigantic economic influence, the rise of entrepreneurial participation in politics can be viewed as an important step towards a new consciousness: “In the Law,” which perceives law as a commodity that can be purchased in accordance with the ability and bargaining power of the purchaser, and “ownership” of the law extend beyond the right to use: there is also the right to influence and control its usage and creation.
Despite the growth of political participation by Chinese entrepreneurs to have their interests represented and voices heard in state-policy formulation, its nature in a socialist state remains fundamentally different from the dynamics of corporate lobbying in liberal-democratic states. Political power in China is centralized around the CCP, and most of China’s law-makers and national supervisors are elected through affiliations with the party.Footnote 163 Therefore, even as members of the legislature, Chinese entrepreneurs tend to shy away from raising important but sensitive issues that may embarrass the associated government officials.Footnote 164 Furthermore, private entrepreneurs’ ambition of increased participation in politics is checked by increased presence of CCP in private enterprises, where a CCP branch may be established if three CCP members employed in an enterprise apply to do so.Footnote 165
Contrary to liberal democracies in which enterprises utilize the media and public relations campaigns to gather opposition and exert pressure on the government, Chinese enterprises prefer maintaining and appeasing the political order rather than challenging or changing it.Footnote 166 In view of the limited power possessed by China’s legislature in influencing major laws and policies,Footnote 167 the relatively low influence of corporate lobbying for China’s industries due to their corporatist and statist nature,Footnote 168 and the significant delegated power of various state ministries and provincial governments in creating and enforcing subsidiary rules, Chinese enterprises generally prefer “inside” forms of lobbying, conducted through opaque rules and non-institutionalized channels.Footnote 169 The private sector’s proactive influence on the policy-making and implementation processes is made possible even in an authoritarian state like China.
In addition to institutional co-optation and lobbying channels such as the national and regional committees of the CPPCC for enabling private business owners to speak out during policy-formulation processes, the influence of private businesses on party-state policy includes various types of personal ties with local government officials in the policy-implementation process.Footnote 170 Through these carefully cultivated personal networks, Chinese entrepreneurial managers are able to connect informally with local government officials at different administrative levels to express their opinions with respect to the formulation and enforcement of regulations.Footnote 171 Business associations are formed to unite Chinese enterprises within certain industries as special-interest groups and, with gigantic economic influence, they have engaged in government–business dialogue and collective actionsFootnote 172 to bargain with the ministries.Footnote 173 Therefore, in spite of the constraints imposed on Chinese enterprises due to China’s political environment, Chinese enterprises are still able to attain political influence and promote their interest amid increasingly globalized market competition, and, in the process, exhibit forms of “In the Law” consciousness through embedding lobbying and political co-optation.Footnote 174
To some extent, “In the Law” consciousness can be considered as an evolved form of “With the Law” consciousness with a longer time horizon. While “With the Law” consciousness perceives the law as something given that will not change at least within a certain period of time, and hence must be complied with despite some room to “play” and manoeuvre, in the long run, Chinese entrepreneurial managers, assumed to be rational, risk-neutral, and individual, expected utility maximizers who proactively act in their own best interests,Footnote 175 are motivated to further their instrumental treatment of law by seeking to influence the law themselves, as a response to transformations in China enabling the emergence of corporate political advocacy and lobbying behaviour.
Studies on cultural orientations have long observed a tendency for Chinese people to be long-term-oriented.Footnote 176 Positively and significantly related to the work ethic of Confucian dynamism,Footnote 177 long-term orientation promotes facework strategies of harmony and co-operation in China,Footnote 178 and fosters virtues oriented towards future rewards by emphasizing perseverance and thrift.Footnote 179 Currently, the long-term-oriented cultural value of Chinese entrepreneurial managers is mainly observed in the maintenance of business-to-business relationships that emphasize long-term stability, trust, and commitment in relationship exchange.Footnote 180 Business behaviour, especially towards legislations and regulations, remains relatively short-term-oriented and speculative, since the long-term orientation is overwhelmed by the situation in China, where implicit rules and “guanxi” take priority over murky and unenforceable laws.Footnote 181 But, as the Chinese government reduces its tolerance for illegal and legally ambiguous practices, allegedly a hallmark of the Chinese development model,Footnote 182 and takes measures to improve regulatory practices and enforcement, Chinese entrepreneurial managers are beginning to adopt a long-term orientation and prioritize regulatory implications in the long run. Evolving from “With the Law” to “In the Law” consciousness, Chinese enterprises as discussed above are gradually taking proactive steps to expand sociopolitical influence and ensure their long-term growth and sustainability.
Nevertheless, “In the Law” consciousness does differ from “With the Law” consciousness in one significant aspect—preference for collective utilities. Narrow self-interest is a behavioural assumption employed in the economic analysis of law but, in reality, people’s preferences, including those of Chinese entrepreneurial managers, often extend to collective utilities such as the mechanisms used to allocate resources and the welfare of others.Footnote 183 Notwithstanding the tight control of the Chinese government over the business environment using state corporatist techniques,Footnote 184 the new generation of Chinese entrepreneurial managers are developing a “team reason” consciousness that exhibits a preference for collective utilities rather than a sole concern to maximize individual utilities,Footnote 185 as they set up and operate numerous business associations that help to exchange policy-relevant information within the sector and improve the public image of the sector in addition to, as discussed in this section, engaging in government–business dialogue to persuade the government to revise or abandon policies.Footnote 186
Moreover, individual rationality as the assumption is deficient in addressing the concern for reputation, social commitments, and moral imperatives.Footnote 187 Voicing interests and exerting influence as a group in national policy-making through formal channels may have been recently made possible due to institutional changes,Footnote 188 but political advocacy can be a part of social responsibility,Footnote 189 and increasingly Chinese entrepreneurs view political participation in the NPC and CPPCC not only as recognition of their social status,Footnote 190 but also as a political space in which to participate in public-policy development to voice environmental and social-welfare concerns.Footnote 191 So far, there has been limited success in pushing forward different agendas due to the unequal nature of the relationship between the private sector and the government, although it is evident that, with increased use of the institutional framework, Chinese entrepreneurs are more actively striving to build their reputation, pursue commitment to social good, and exert influence on the norm of CSR practices. The attitudinal change towards collective utilities illustrates the distinguishing nature of “In the Law” consciousness, and provides a theoretical basis for future research into the interesting and challenging topics relating to the socio-legal aspects of entrepreneurial development in China.
5. Conclusion
The current study presents a review of China’s legal transformation in the socialist era through an illustration of the legal consciousness of Chinese enterprise managers. By utilizing the theoretical framework of legal consciousness proposed by Ewick and Silbey, and recognizing the changing dynamic of jural and societal laws in China, this article demonstrates that, during the dramatic government-led social and legal transformations, Chinese enterprise managers have been actively responding to, interacting with, and contributing to the construction of legality. They have displayed in different historical periods “Before the Law,” “With the Law,” “Against the Law,” “Under the Law,” and “In the Law” (as proposed in this study) strands of legal consciousness towards legal orders constituted by mixed models of law, and they continue to adapt and adjust themselves to survive in China’s ever-changing politico-legal environment.
Consistently with previous works of researchers adopting the approach and methodology of Ewick and Silbey,Footnote 192 it is observed that various types of legal consciousness could co-exist simultaneously, and there is no clear observable evidence that any specific type is the prerequisite or consequence of others. Although the co-existence of various types of legal consciousness, being a result of the variation of people’s perceptual and attitudinal response to law, tends to make the analysis more complex and difficult to comprehend for researchers, the current study provides an illustration of how certain social groups’ predominant legal consciousness is closely related to government policy and legal changes in society. And, while the works of other researchers tend to focus on how the impact of legal transformation in China has empowered Chinese people to progress from a “low level” to a “high level” of legal consciousness in the reform era,Footnote 193 this article has elucidated and offered a more extended longitudinal perspective on the utilization of legal consciousness as a study lens, by analyzing the metamorphosis of the socialist regime in the entire period of the past 70 years since the PRC was established in 1949.
It remains uncertain how and whether the economic and social roles, as well as the legal consciousness of Chinese entrepreneurs and managers, will retain their current positions or reposition to new ones in response to changes in socialist China. Transformation of the current state ideology is obvious,Footnote 194 drastic social and political reforms seem inevitable,Footnote 195 but the world is still struggling to understand the direction of China’s future development. Some predict a shift towards traditional Confucianism, as it has been the core value of Chinese people for more than 2,000 years,Footnote 196 but it is argued that Confucian ideology constitutes primarily the social norms and practices while excluding the political arena.Footnote 197 Some suggest a future of mature socialism, being “a system of multilevel democratic iterative coordination involving mutually supportive and defining roles for a central authority and enterprises,”Footnote 198 with more democracy introduced to various levels of the power hierarchy, albeit private ownership and entrepreneurship remain underdeveloped.
At the moment, many researchers tend to believe that China will continue in its trend towards a new form of state capitalism, with its people strictly controlled by the party-state; its resources in the hands of core social, political, and economic institutions; and its private sector centrally managed by a state, as the state plays an active role in maintaining enterprises through direct ownership and control.Footnote 199 Amidst Chinese President Xi Jinping’s “Belt and Road Initiative,” a grand strategy launched and driven by the desire to ease domestic production overcapacity and assume a leadership role in international affairs, Chinese companies engaging in international economic co-operation are increasingly mobilized by the state to prioritize infrastructure projects and industrial processing trade.Footnote 200 Probably as a response to the trade war between China and the US, Xi had called for Chinese enterprises to be “self-reliant” and improve their capability of “independent technological innovation.”Footnote 201 The Chinese government had also tightened regulation of a number of industries, and enterprises are now facing face higher taxes and employee-benefit costs.Footnote 202
In spite of greater pressure for the Chinese government to direct and tighten control over Chinese enterprises, the dependence on the success of the private-sector economy in present-day China remains strong.Footnote 203 In a position completely different from that in the earlier days of reform and opening up, Chinese private entrepreneurs and managers are equipped with invaluable industry vision, managerial experience, and technical knowhow, and they know well how to take the company forward, and what national policies and regulatory initiatives will best assist the progress. Chinese enterprises are also adopting Western governance models and are further expanding in size and influence. The actual outcome of socialist China’s future development is yet to be seen but, as the Chinese state pushes for more control, Chinese enterprise managers seeking more political influence and paving way for “In the Law” consciousness may find their ambitions checked by an increasingly interventionist government that is prepared to accelerate state-driven development by all means.
The current study underscores the importance of a comprehensive longitudinal analysis that allows more breadth and depth in terms of research frameworks and methodologies. It is hoped that this article will inspire further research in the future on possible changes in the legal consciousness of specific demographic or socioeconomic groups in China. It is interesting to see how the legally oriented attitudes and perceptions of Chinese people in general will evolve in the coming years as China continues its development from the current socialist state to a new hybrid form of amalgamation of Confucian, socialist, and capitalist ideologies with Chinese characteristics,Footnote 204 possibly still under the tight control of the party-state, and with a vast appetite and ambition to become a global economic and political superpower.
Acknowledgements
The author is grateful to the University of Oxford and Chinese University of Hong Kong for their research support.
