Breaking down China's legislative agenda 2022 (Part I)
In delivering the Work Report of the National People's Congress (NPC) Standing Committee in the fifth session of the 13th NPC on March 8, Li Zhanshu, chairman of the NPC Standing Committee, outlined the NPC’s legislative agenda for 2022.
Li listed 33 pieces of legislation that will be formulated or amended in 2022, broadly divided into three categories concerning China’s socialist market economy system, China’s welfare, social, and environmental protection affairs, and matters of national security.
This newsletter will take a look at each one of the legislation and see what each of the legislation will address and where China is at on each of them.
According to this tally, China has 287 pieces of legislation in force as of March 1, with 5 more that have been passed but yet to come into force.
[Content: ①The Rural Collective Economic Organizations Law (农村集体经济组织法) ② The Energy Law (能源法) ③The Futures and Derivatives Law (期货和衍生品法) ④ The Tariff Law (关税法) ⑤ The Yellow River Protection Law (黄河保护法)⑥ The Tibetan Plateau Ecological System Protection Law (青藏高原生态保护法)⑦ The Black Soil Protection Law (黑土地保护法)⑧The Social Assistance Law (社会救助法)⑨The Preschool Education Law (学前教育法)⑩The Civil Compulsory Enforcement Law (民事强制执行法)⑪ Law Against Telecommunications Network Fraud (反电信网络诈骗法)]
I Formulations
On improving China’s socialist market economy system
①The Rural Collective Economic Organizations Law (农村集体经济组织法)
What does it do? Clarify the legal status of rural collectives, regulate its organizational model, personnel, property rights, supervision and management system, relationship with the government, and self-governing organizations of villagers.
Where are we at? The idea of a Rural Collective Economic Organizations Law has been floated for at least two decades. In 2017, rural collectives are given “special legal person" status by the 12th NPC, legal scholars welcomed the step forward but called for a separate law.
In June 2020, a meeting was held to officially launch the drafting of the Rural Collective Economic Organizations, and in June 2021, a follow-up meeting was held and produced a rough draft of the legislation. The second meeting asked for a draft to be made ready for public comment as soon as possible.
For a preview of the law, the Ministry of Agriculture has issued a guideline for regulating rural collectives and the Regulation of Rural Collective Economic Organizations of Guangdong Province is considered the most comprehensive among such regional regulations.
The bigger picture: Expediting the law, which will provide a more sound legal basis on rural collectives, is seen as part of the overall effort to boost economies in rural regions.
Zhuang Wenzhong, an NPC representative, says that there are now 530,000 rural collectives across the country and the passing of the law is “critical to stimulate the vitality of the rural collective economy, promote the preservation and appreciation of collective assets, and develop and expand the rural collective economy.“
② The Energy Law (能源法)
What does it do? According to an explanatory document by the National Energy Agency, the law seeks to 1. establish a guideline for energy extraction and consumption; 2. promote the construction of energy-related infrastructure; 3. establish a universal energy supply system to satisfy household energy consumption; 4. promote technological advances in the energy sector; 5. make a comprehensive push for the marketization of the energy sector; 6. established an energy reserve mechanism to ensure energy security; 7. establish supervision mechanism for the proper extraction and consumption of energy.
Where are we at? In April 2020, the NEA released a draft of the Energy Law and sought public comment. Here is an assessment of the draft, which noted that it underwent significant changes since 2007 when it was first released to the public for comment. Here is a news report on why the drafting of this law took so long.
The bigger picture: China already has a number of energy-related laws in place, such as the Coal Law, the Electric Power Law, the Renewable Energy Law, the Energy Conservation Law, the Radioactive Contamination Prevention Law, and the Nuclear Security Law. The Energy Law will serve as a fundamental law for the energy sector. Other energy-related legislations being considered include the Petroleum and Natural Gas Law, and the Nuclear Energy Law.
③The Futures and Derivatives Law (期货和衍生品法)
What does it do? As its name suggests, the law will regulate the futures and derivatives markets. The law was initially titled the Futures Law, but after taking in comments to its first draft in 2021, legislators agreed to change the title to the Futures and Derivatives Law, so as to better regulate the trading of derivatives.
Currently, there is no comprehensive legislation governing the futures and derivatives markets. The markets are regulated by a combination of government regulations, legal opinions of the Supreme People’s Court, agency policies, and self-disciplinary rules of trade groups.
Where are we at? The law received its first and second reviews last year, and the NPC Observer has kindly published the post-2nd-review draft on its website. Here’s a quite detailed account of some of the deliberations over the language of this law.
Legislators are anticipating that the law is passed after a 3rd review by the NPC Standing Committee, hopefully sometime this year.
The Bigger Picture. Aside from providing better regulation for the futures market and reducing business risks, experts say one of the features of the law is that it will facilitate the opening up of China’s futures market.
As this Xinhua report notes
The draft futures law established a code of conduct for foreign futures trading venues and futures management institutions that seek to provide services to those within China, and cross-border transactions between domestic and foreign traders, and strive to build an institutional system for market interconnection; it provides that the futures regulatory authority under the State Council may establish cross-border regulatory cooperation mechanisms with foreign regulatory authorities for cross-border supervision and management.
此次期货法草案规定境外期货交易场所、期货经营机构等向境内提供服务，以及境内外交易者跨境交易应当遵守的行为规范，着力构建市场互联互通的制度体系；规定国务院期货监督管理机构可以和境外监管机构建立跨境监管合作机制，进行跨境监督管理。
④ The Tariff Law (关税法)
What does it do? The Tariff Law will be China’s most comprehensive law on Tariffs. It will replace the State Council issued Regulations on Import and Export Duties after it is enacted.
Where are we at? There is not a whole lot of literature on the progress of the Tariff Law, except that the Ministry of Finance and the General Administration of Customs are both commissioned to draft the law after it appeared in the legislative agenda in 2015. Interestingly, the Ministry of Finance has been working on the draft since at least 2016 and declared in 2018, 2019, 2020 that they’ll try their best to have the drafting wrapped up within the year. They made no such pledge in 2021, but the State Council said it will be sending the draft to the NPC Standing Committee.
The Bigger Picture. The effort to codify tariff is part of an ongoing project to shift the country’s tax system to law-based, rather than regulation-based. Better explaining this shift is this article by the NPC Observer.
On improving China’s welfare, social, and environmental protection affairs
⑤ The Yellow River Protection Law (黄河保护法)
What does it do? The law seeks to better protect the Yellow River, a river that is dubbed the “mother river“ of the Chinese nation and carries special political significance. It will primarily address the four issues of environmental protection and recovery, water resource conservation, water-sand regulation and flood prevention, and pollution prevention.
Currently, there is four water-related legislation that is relevant to the protection of the Yellow River, but they are considered “not targeted“ and “weak operationally“. Furthermore, the 9 provinces/autonomous regions that the Yellow River runs through have in place regional protective measures but are considered fragmented.
Where are we at? The Ministry of Water Resources and the National Commission for Development and Reform are both commissioned to draft the law and seem to have made quick progress. The State Council agreed to submit a draft to the NPC Standing Committee in Oct.2021, in Dec. 2021, the NPC proceeded with the first round of review.
The Bigger Picture. One can argue that Xi Jinping is perhaps the biggest supporter of environmental protection in China, that’s why environmental protection initiatives, including legislation, have really taken off since he came into office.
The work has paid off too, as made evident by the much better air quality in Chinese cities, and tangible improvement in wildlife protection. Your host personally very much looks forward to visiting the newly established national parks.
⑥ The Tibetan Plateau Ecological System Protection Law (青藏高原生态保护法)
What does it do? The law will promote environmental conservation and recovery on the Tibetan Plateau, ensure the efficient use of resources, and push forward land protection mechanisms with the national park system at its center, according to expert Chen Haisong of Wuhan University.
With its highly unique ecological system, the Tibetan Plateau deserves its own protection law, according to Chen.
Where are we at? The idea for legislation to protect the environment of the Tibetan Plateau is very novel and seems to be first mentioned at the ongoing two sessions. Li Zhanshu, chairman of the NPC Standing Committee, said the drafting of the law is yet to begin.
The bigger picture. In June and July of 2021, Xi Jinping visited Qinghai and Tibet respectively. On both visits, he stressed the importance of protecting the environment there.
Tibetan Plateau covers the entirety of Tibet and Qinghai, as well as parts of Sichuan, Yunnan, Gansu, and Xinjiang. In recent years, Tibet, Qinghai, Sichuan, Gansu, and Yunnan all have implemented some form of regional regulations on the protection of the Tibetan Plateau.
⑦ The Black Soil Protection Law (黑土地保护法)
What does it do? This is the tricky part. The law aims at protecting “Black soil“, or chernozem soil, which is found in China's northeastern provinces of Heilongjiang, Jilin, Liaoning, and in some parts of the Inner Mongolia Autonomous Region. Black soil, known as “the giant panda of farmlands“ is very fertile and considered one of the best soils for growing crops. But what exactly the law would protect is under debate, as this Xinhua Story shows.
But the general direction is certain, that is to preserve the black soil in NE China and treat it as a “strategic resource“ in connection with food security. Years of excessive reclamation have eroded its nutrients and the chernozem layer is thinning, which threatens the country's ecological security and sustainable agricultural development.
According to an explanatory document on the draft law, provincial-level legislation has failed to establish an effective protective mechanism and the country is in need of measures designed to specifically protect the black soil.
Where are we at? In December 2021, the NPC conducted the first round of review of the draft.
The bigger picture: In a visit to Jilin Province, Xi Jinping stressed the importance of protecting black soil resources in the context of ensuring food security. However, in April 2021 Xinhua unloaded a bombshell investigation unveiling rampant stealing of black soil in Heilongjiang.
The case eventually led to an on-site inspection by vice-premier Hu Chunhua, who demanded local authorities step up their game in protecting the black soil, as stressed by Xi.
⑧The Social Assistance Law (社会救助法)
What does it do? The Social Assistance Law will be a crucial link to provide help to the society’s most vulnerable. Currently there are the Social Insurance Law and the Philanthropy Law, but experts urge legislators to codify social assistance to knit a tighter safety net. To be sure, various forms of social assistance already exist in China, as provided for by documents such as the Social Assistance Interim Regulation, published by the State Council in 2014.
For the latest draft of the law, see here.
Experts hope that eventually China will form a social safety net consisting of a Social Welfare Law, a Social Assistance Law, the Social Insurance Law, the Philanthropy Law, and other commercial insurance regulations.
Where are we at? The idea for a social assistance law has been around since at least 2007, when the Ministry of Civil Affairs acknowledged that it had been commissioned to draft the law. The MCA submitted a draft to the State Council for review, and in 2008 that draft was released to the public for comment. However, a 2012 report indicated that the State Council in conjunction with the MCA are still revising the draft. Despite repeated calls by NPC and CPPCC representatives to expedite the legislation process, it wasn’t until 2020 when the MCA released another draft for public comment. The State Council said in 2021 it plans to submit the draft to the NPC for review.
The bigger picture. There are some discussions on why the law faced difficulties. Two of the most controversial issues are who should be eligible for social assistance, and what role the government and society should each play. The fast growing GDP in the last decade, and the wealth disparity between regions and rural and urban regions, and made standard setting difficult as well.
Another factor is the general wariness the Chinese society against welfare, especially the misappropriation of welfare. Officially repeatedly warned against “welfarism” that may “indulge people to become lazy”. Therefore legislators need to walk a line between providing enough assistance to those in need, and not trigger too much pushback.
The good news is that as China grows richer, the society is becoming more accepting of using public funds to offer social assistance.
⑨The Preschool Education Law (学前教育法)
What does it do? The Preschool Education Law seeks to regulate the preschool industry, such as clarifying the government’s role in providing adequate preschool service to the public, requirements on preschool curriculum, and staffing qualifications, etc.
For latest draft, see here .
Where are we at? The Ministry of Education published a Kindergarten Regulation in 1989, that de facto regulated preschools in China. Ever since the early 2000s there have been repeated calls to pass proper legislation. In 2019, the Minister of Education Chen Baosheng said under the commission of the State Council, the MoE has set up a legislative task group and has completed a preliminary draft of the law.
In Sept. 2020 the MoE released the draft on its website, seeking public comment.
The bigger picture. The strong push for the law mainly originates by the public’s frustration over expensive and insufficient preschool service. The government is faulted for not devoting enough resources to provide a universal and affordable preschool service. Some went as far as suggesting that the lack of affordable preschool service may discourage people from having more children.
⑩The Civil Compulsory Enforcement Law (民事强制执行法)
What does it do? To enhance enforcement of civil lawsuits.
Where are we at? Since around 2000, the Supreme People’s Court have issued a number of policies to enhance enforcement of civil lawsuits. In 2000, The SPC was commissioned by the NPC Standing Committee to come up with a draft. in 2002, the SPC has completed the draft and conducted two revisions after consulting with provincial high courts. In 2004, an SPC official said the draft had been submitted to the NPC pending approval, but that draft seems to have run into a dead-end.
In 2016, SPC Chief Justice Zhou Qiang declared a “war on enforcement disability“, and in 2019 declared victory. Stat showed that between 2016 and 2019, China’s court system enforced 20.4 million cases, and completed enforcement on 19.4 million of them, total enforced payment mounted 4.4 trillion yuan, increasing 98.5%, 105.1% and 71.2% respectively.
In 2019, the Central Comprehensively Governing the Country by Law Commission issued a policy paper acknowledging the progress the court has made, but called for tackling the issue “at its root“, saying that the reality still falls short of people’s expectations.
In 2019, the SPC announced that it has completed a draft of the law and is seeking comments. For text of the draft, see here.
The bigger picture. Enforcement has long been a weak spot of China’s justice system. In practice enforcement of civil lawsuits are often hindered by regional protectionism, or poor coordination between the court and other institutions.
⑪ Law Against Telecommunications Network Fraud (反电信网络诈骗法)
What does it do? The law seeks to tackle phone scams, which have been a major source complaint by the public in recent years, by clearly defining the responsibilities of government agencies, businesses, and local governments and encouraging a coordination mechanism.
Where are we at? This law was only raised in 2021, but has made quick progress, underlining the urgency for such a legislation.
In Oct, 2021, a draft was submitted to the NPC Standing committee for review, and was released for public comment in the same month.
The bigger picture. If you live in China there’s a great chance you’ve seen an ad somewhere encouraging you to download the anti-scam app, or 反诈app. It’s a nation-wide campaign to raise awareness against phone scams, especially among those who are most vulnerable, such as the elderly.
According to Xinhua, In 2020, Chinese police received nearly 1 million reports of phone and internet scams, which cause more than 35 billion yuan in property loss. Phone and internet scams made up more than 40% of all criminal cases reported to the police, and has become the most hated crime by the public.
This newsletter is written by Yang Liu, founder of Beijing Channel.
Please write to yangliuxh@gmail.com if you have any feedback or suggestions of any particular topic to be featured in future Beijing Channel newsletters.
Disclaimer: translation in this newsletter should only serve as a reference, NOT as an official translation of the original text.