Business and Human Rights

The People's Bank of China (PBOC), China's central bank, as reported in the Washington Post, yesterday announced that it would raise two key interest rates today for the first time in almost ten years. The move, intended to curb inflation and prevent overheating in the economy, is the latest of several efforts by the Chinese government this year to reduce the rate of growth, but is the first use of interest rates, the most fundamental monetary policy tool at a central bank's disposal. Previous efforts had included raising banks' reserve requirement and declaring by administrative fiat that lending in construction-related sectors should slow.

In an extensive interview published in several domestic Chinese sources, legal scholar Wang Liming, one of the principal drafters of the draft Property Law under deliberation by the NPC Standing Committee, discussed nine key points in the draft as well as issues that are still under debate.

-Rights of ownership associations. The draft law provides that associations of the individual owners of units in a building or development have a right to replace property management companies and that individual owners, not development companies, exercise joint ownership over common areas such as parking lots and corridors unless otherwise clearly provided by contract.

According to various Chinese media reports, the NPC Standing Committee held its second deliberation on China’s draft Property Law last week. The law covers both personal and real property and sets out the basic rights and obligations of property owners. One report in the Beijing News reviewed the deliberation process and nine key points of the draft with legal scholar Wang Liming, one of the principal drafters of the law. According to Wang, the Property Law is one part of a longer Civil Code that is presently under deliberation in China.

China and the Association of Southeast Asian Nations (ASEAN) announced on Tuesday that they would begin tariff reductions on merchandise trade in January 2005 leading to an eventual free trade area (FTA) that would seek to integrate China's rapidly growing economy with the economies of Southeast Asia. The agreement, to be signed at the November leaders' meeting of the China-ASEAN Free Trade Area Commission, will also create a dispute settlement mechanism.

The Legalinfo website, affiliated with the PRC Ministry of Justice (MOJ), carried critical extensive analysis of legal and regulatory issues surrounding the PRC Commission for the Promotion of Trademarks (Commission) issuance of a list of 271 "famous product brands" through a yearly competition. Corporations expend significant efforts and funds to secure government recognition of their brands.

First, the article raises the question of whether this practice might be illegal under the Administrative Licensing Law. Second, the article illustrates the tendency of Chinese government organs to rely on administrative regulation to determine issues which might (in the U.S.) be decided by the market. Third, the article also illustrates the careful nuance Chinese legal observers must adopt when criticizing government policies.

According to a report originally carried in Xinhua, Chinese lawyers for PRC private oil exploration firms in Shaanxi province are threatening to launch China's largest suit against the provincial government, seeking over 5 billion yuan ($600 million). Over the past 10 years, the Shaanxi provincial government appears to have been agressively encouraging oil exploration in 15 counties in the north of the province. Following reports in 2002 of environmental damage, resource waste, and economic losses, the central government issued orders to clamp down on exploration activity. Since then, local governments have closed wells but left unaddressed outstanding compensation issues (likely including environmental cleanup and economic losses). These suits appear to be an effort by private PRC firms to recoup some of their losses. They also illustrate the ability of some private PRC companies to use the legal system to challenge government regulation.

Citing Xinhua, the People's Daily reports that on September 5 the Ministry of of Culture announced that "Quake 3" and five other computer games were, among other things, harming China's national security. The MOC called on government authorities to undertake inspections and issue orders to halt the distribution of these games.

According to a report carried on the People's Daily website, on September 9 Liu Bo, Director of the General Administration of Press and Publication's Publication Distribution Administration Department, told representatives of several privately run book companies with publication distribution rights that Chinese authorities would not allow privately owned enterprises to establish book publishing houses any time in the next few years.

Director Liu also said, however, that while state-owned publishers that convert to an enterprise structure will not be allowed to accept foreign investment, they will be allowed to accept domestic investment. He suggested that private book companies could be shareholders in such entities and use this method to "get their foot in the door" to obtain the right to publish.