When contemplating the future of the People’s Republic of China (PRC), it is difficult to avoid the allure of assumptions about the interaction between economic growth, social mobility, and educational advancement and the emergence of political liberalism. It is particularly difficult for someone like your reviewer who spent years living in Taiwan in the 1960s when it was a one-party Leninist regime with a history and ideology directly linked to that of the Chinese Communist Party. From this perspective and adding equally difficult-to-avoid regional stereotypes, it “naturally” follows that the PRC will eventually become its own idiosyncratic version of Taiwan, South Korea, or Japan.
Whether such assumptions are misplaced may be impossible to answer at any specific point in time. As both authors of Embedded Courts (Ng and He Reference Ng and Xin2017, 195) and Yogi Berra remind us, “prediction is perilous,” especially about the future. It is also inevitable and necessary, and if one is to focus on China rather than on the next World Series, there is no better source of wisdom than this book. This is particularly true if an observer defines political liberalism to include the rule of law, however one might define that phrase.
The core of a legal system is the judiciary. They come in many sizes and shapes. On one end of an imaginary spectrum, the American judiciary is individualized and politicized. Judges run for election on partisan tickets or are appointed in a process where the most important criterion is their position on the politically salient issues of the day. Alternatively, a judiciary can be a career bureaucracy, more similar to the American military than to the US Supreme Court. The Japanese judiciary is illustrative. Insulated from political influence by professional socialization and communal solidarity, it is impossible to imagine a Japanese judge taking a public stance on any controversial issue.
Rule-of-law democracies can accommodate either model. Authoritarian governments, on the other hand, can tolerate neither because both models imply judicial independence, either of the individual judge, of the institution, or a combination. Yet a complex society with a diversified economy like China requires rules and institutions that can implement them. Embedded Courts presents the PRC’s attempts to square that circle. On the one hand, judges must be sophisticated enough to understand the contractual intricacies and international implications of contemporary intellectual property licensing agreements and legitimate enough to apply the law to disputes arising therefrom. On the other hand, they must be sensitive enough to the need for social stability to refuse to grant a divorce to an abused spouse if a divorce would disrupt the community. Most important, they must be willing to operate in a context where the Communist Party can smoothly call the tune when political or social stability is at stake.
Embedded Courts emphasizes from the first paragraphs, therefore, that the Chinese judiciary is not the “homogeneous,” “top-down, monastic” system that the unitary formal structure of Chinese government would imply. On the contrary, the authors divide Chinese courts into two ideal types, “work-units” in rural areas and “firms” in the cities (Ng and He Reference Ng and Xin2017, 7). The most important difference is how much they “use law”: work units not much, firms, a lot. What the two archetypes share, however, is their “embedded” nature. Neither operates in an “independent and well-formed legal environment” or, to quote the authors, “to put it in sociological parlance, the development of the juridical field of China remains at a nascent stage” (15). Instead, all courts are in an institutional environment with “multiple external constraints,” which they identify as “administrative, political, social, and economic embeddedness” (17) and which determine “when their judges can use the law and when they have to do away with the law” (14).
The authors recognize that every legal system operates on a spectrum of judicial independence, competence, and honesty. They argue, however, that the embeddedness of Chinese courts is unique because of the contradictory demands of a Leninist party determined not only to remain in power but also to create a market economy with all the complexity, innovation, and dynamism of the leading economies of the world.
THE FOUR VALENCES OF EMBEDDEDNESS
Embeddedness begins with the bureaucratic nature of local courts. What the authors label a “vertical hierarchy of control” will surprise no one familiar with previous scholarship on Chinese courts (or, to some extent, court structure in the civilian world): collegial panels, deference to senior judges, elaborate procedures, and close supervision in important or novel cases by the adjudication committee. The question for the authors is “whether this is a legal bureaucracy” (Ng and He Reference Ng and Xin2017; emphasis in original). The data convince them that it is not: “[T]he legal nature of a case—e.g., whether a novel legal argument is involved or a new factual situation is dealt with by the law—factors little into the process. … It is the potential repercussion of a decision, not the complexity of the legal argument on which it is based, that determines what bureaucratic procedure to follow” (93).
In their conclusion, the authors differ with the more favorable appraisal of Zhu Suli in Songfa xiaxiang (sending law to the countryside), who argued that the administrative hierarchy and, specifically, the adjudication committee protected local courts from external pressure:
[O]ur study shows that quite a number of the committee’s decisions were made as a result of political influences from without. The [committee] minutes, as an internal document, were faithful enough to record traces of political influence, to show how local government and party officials influenced the judicial process. In many cases, the committee gave in to external influences, sometimes bending over backward to cater to the government and party. (Ng and He Reference Ng and Xin2017, 109)
At the end of their chapter on administrative structure, the authors return to the comparison with civilian courts: “[W]hat sets the Chinese model apart is the embeddedness of the court in the local party-state governance coalition” (120). Indeed, they go further to qualify their earlier use of the term “external” and conclude that Chinese courts, and not just the work units in rural Shaanxi but also the firms in Shanghai, are “openly part of the local party-government and heavily involved in a lot of state actions,” (120) including political action.
Which brings us to political embeddedness and the courts’ role as “stability maintenance agencies.” American judges are political animals in a way that is inconceivable to Japanese and other civilian judges—indeed, on an individual level, they are undoubtedly more political than Chinese judges. What distinguishes that politicization from the Chinese version is its idiosyncratic, individualized, unreliable nature. There may be six conservative justices on the US Supreme Court now, but a few deaths and a string of Democratic presidents will change that. Similarly, Texas courts used to be friendly to tort plaintiffs. A concerted effort by business groups changed that. It could change again. In other words, while American judges may have to appeal to political masters to get in office, they do not have to do so once there. Chinese judges decidedly do, and they do so as an institution, not as individuals. To return to the authors, “[t]he Chinese judicial system is therefore a strange animal. On the face of it, it operates very much like a modern bureaucracy. Underneath the bureaucratic goals, however, are political drives that respond to the sometimes long-term, but more often short-term needs of the party-state” (Ng and He Reference Ng and Xin2017, 121).
And what the party-state needs overwhelmingly focuses on one issue: stability. The authors illustrate this focus with three contested divorce cases all brought by wives and all denied despite clearly satisfying the legal criteria for divorce. The first involved a doctor in her mid-thirties. In court, her husband threatened to cut off her feet if the divorce was granted. She broke down and threatened suicide. The judge found the husband’s threat more credible and denied the divorce. In the second case, a successful executive wanted to divorce her husband, a former employee of a large state-owned enterprise. This time, the husband threatened suicide. The court denied the petition. Along with sympathy for the vulnerable husband, the court recognized that he represented a growing demographic and, according to the authors, prioritized “the welfare of this group of laid-off workers, for fear that they, if left without a family, would become a source of unrest” (Ng and He Reference Ng and Xin2017, 131). In the third case, the husband was violent and attacked the wife in the courtroom on two occasions. He also threatened suicide twice. The judge rejected the petition because she feared that the husband might “go off the deep end.” The wife was from a prominent family and tried to use personal connections to go around the sitting judge, only to be told to “find ways to compensate the other side.”
To be clear, it would be unusual for a judge anywhere to never bend or ignore the law when faced with a particularly sympathetic party. Your reviewer had a divorce client who was desperate for a divorce from an absent husband, but who lacked the grounds. Despite being told that she would not succeed, she insisted on proceeding. When the judge said that he would reluctantly have to deny the petition, the clerk of court turned around and said: “But judge, it is almost Christmas.” The divorce was granted, and the petitioner did not even have to threaten suicide. Superficial similarities notwithstanding, there is a profound difference between the Christmas divorce and the Chinese cases. While the Chinese judges may or may not have found the respondent husbands sympathetic, they made their decisions for policy reasons: to avoid social disruption. This goal permeates virtually everything that the courts do from housing demolition to environmental litigation. Often when the controversy is too hot to handle, the courts simply try to avoid involvement, by either refusing to accept the case or forcing the parties into mediation (Ng and He Reference Ng and Xin2017, 125).
None of these behaviors is unique to China. What distinguishes the political embeddedness of Chinese courts from the inevitable political influence on courts everywhere is its mercurial nature: “Routine cases can quickly become political when the parties involved turn violent and the media become interested” (Ng and He Reference Ng and Xin2017, 139). Overtly political moves are most prominent in rural work unit courts where the suicide of a spurned husband can roil the community. Such events do not have the same salience in coastal courts both for sociological reasons and because those courts are overwhelmed dealing with commercial and other types of civil litigation. Nonetheless, the underlying phenomenon remains; stability is fundamental everywhere.
The third aspect of embeddedness is social, and, here, we encounter that omnipresent cultural trope, guanxi. A quick Google search finds “guanxi” described breathlessly as being “at the heart of China’s social order,” “how China works,” “of central importance to Chinese culture,” and generally portrayed as not only important but also uniquely Chinese, as if social ties were not “centrally important” in, for example, New Jersey. Refreshingly translating “guanxi” as “social ties,” He and Ng (Reference Ng and Xin2017) recognize it as important in every human society and posit no tie to Confucius’ Analects or the nature of ancient agriculture. They do note, however, that social ties have an idiosyncratic impact on Chinese judges because of the constant bureaucratic and political considerations that are a daily part of their job in a way not found in many other judiciaries. Especially prosaic is their realism about the relative roles of culture and money: “One informant summarizes her viewpoint on guanxi: “guanxi helps, but it must be rock solid: Shallow and indirect personal ties exert little impact on a case. The so-called guanxi may serve as an introduction. But to affect the case outcome, you have to resort to money” (159).
The fourth and final element of embeddedness is economic. Here again, there is reason to accept the authors’ characterization of the Chinese judiciary as “a strange animal.” As those familiar with Chinese courts will know, their fiscal status has long been largely dependent on local government revenues. Recent reforms have lessened that dependence, but Embedded Courts was written too early for any judgment about the success of these measures. Nor do the authors add any remarkable new facts from the financial perspective, but they do effectively integrate the economic, with the administrative and political, contexts. Having described how trial courts, especially work units, try to avoid cases for political reasons (although also on occasion intervening for political reasons—whatever the party needs to enhance stability), this chapter describes how courts try to attract cases for the fees that they bring in. As a relatively weak part of the local government, the courts have to compete with other government functions but as the local party state knows well, they do not build highways, sell products, or attract investment.
One result is the oft-cited phenomenon of local protectionism. Courts manipulate the law to protect local enterprises. At least, such is the situation for rural work units. For firms on the coast, on the other hand, the situation is different on two dimensions. First, because local governments are not so dependent on one or a few enterprises, courts are under “less pressure to provide services to local governments in order to ‘get paid’” and can instead provide the public good of impartial law (Ng and He Reference Ng and Xin2017, 174). The second difference between the financial situations of rural work units and urban firms is the latter’s dramatic increase in civil litigation and, hence, in litigation fees. Some statistics will illustrate. In 1978, civil cases represented 52 percent of the total, and 73 percent of those were family cases. Contract cases made up 1 percent. In 2009, civil cases comprised 86 percent, with 53 percent being contract disputes. The authors attribute the change to both increasing commercial disputes and a growth in social conflict accompanying “the malaise of urbanization.”
Whatever the cause, the result is an ever-increasing gap between rural and urban courts—work units and firms in the authors’ terminology. A vibrant and diversified market economy means more high-stakes commercial disputes, which make the judiciary less financially dependent on local government. The presence of foreign and Hong Kong firms and media put more scrutiny on potentially wayward officials and enterprise leaders and greater demands for law-conforming behavior. The authors conclude that the “dual process of economic growth and regional differentiation has reached a point where urban courts in the developed regions operate under a different political-economic logic of judging, one that is less politicized” (Ng and He Reference Ng and Xin2017, 182). They do not go on to say whether urban courts are or will become more independent, more “rule of law” like, more “modern,” or otherwise speculate on their future course. They leave that precarious prediction to the reader.
WHY CARE ABOUT CHINESE COURTS?
Every good book raises as many questions as it answers, and this is a very good book. The most obvious concern China, and Embedded Courts will be required reading for those interested in China. But if Chinese courts are so uniquely shaped and constrained by the embeddedness described above, is the book of value to those uninterested in China? If the authors themselves question whether the judiciary, while clearly a bureaucracy, is a legal bureaucracy, is the book important to comparative law or, going further, to social theory generally? The answer is yes. The attempt by the PRC to create a judiciary simultaneously capable of resolving complex international disputes in Shanghai and pacifying suicidal divorce petitioners in Shaanxi is of practical interest to all those countries trying to go from desperate poverty to middle-income status. It is of interest on a theoretical level as well, but not so much for how the government goes about it as for the timing of the attempt. China’s modern judiciary and legal system, if it successfully emerges, will have come after the nation got relatively rich. Both China and India were poor in 1980. China now is several times richer than India. For most of that period, China did not even try to have a modern legal system. India did and, by many metrics, succeeded. Does that mean that law is not necessary to economic growth? Does it mean that neo-institutional economics, for much of this period, the guiding school of economic thought and World Bank policy, led the world astray? Does it mean that political liberty and democracy are a mistake for a poor country, at least for one that values a basic level of material well-being for its population?
Embedded Courts provides data central to those questions. It is also basic for an equally fundamental related question: why does the PRC think that it needs a professional judiciary now? The book’s initial answer is increasing commercial disputes and “the malaise of urbanization.” Maybe, but it raises even deeper questions. Why were basic courts, staffed by retired military without legal training, sufficient to manage the massive social change and phenomenal economic growth of the last forty years, and why does China need a professional judiciary now? The answer may be that law is what economists call a luxury good, not needed to reach middle-class status but needed to manage the problems that affluence creates. This question is of course simply a restatement of the ones above and returns us to neo-institutional economics and law and development theory by posing the question whether the name of the field should be reversed to be development and law.
We close with a basic question about human nature that permeates the book: can Chinese judges function effectively as neutral professionals 98 percent of the time and then defer to non-legal and illegal commands of the party state when necessary? This is not a new question, or solely a Chinese one, or, for Americans, even a comparative law one. Ignoring the constitutional and statutory rights of African Americans during the Jim Crow era and later is one example of such selective fidelity to law. There exist myriad other comparable examples, and Embedded Courts has given us yet another chance to watch this dilemma play out.
