Chinese SOEs in Latin America--CSR and Culture

There has been much attention paid to the practices of Chinese multinationals, especially its State Owned Enterprises, in Africa (e.g., Lucy Corkin, "China's Emerging Multinationals in Africa," The Africa Journal, Spring 2007; Chris Alden, China in Africa: African Arguments (London: Zed Books, 2007); China Into Africa: Trade, Aid, and Influence (Robert I. Rotberg, ed., Washington, D.C.: Brookings, 2008); Párdraig Carmody, The New Scramble for Africa, Cambridge: Polity Press, 2011); Corporate Responsibility in African Development:  Insights From an Emerging Dialogue, Maya Forstater, Dr. Simon Zadek, Professor Yang Guang, Kelly Yu, Chen Xiao Hong, and Mark George, Working Paper No. 60, Harvard Kennedy School Corporate Social Responsibility Initiative, October  2010).

 (Pix (c) Larry Catá Backer 2013)

Considerably less attention has been paid to the increasingly important involvement of Chinese firms, private and state owned, in Latin American development.  I have previously suggested the U.S. emphasis on the strategic implications of China-Latin American Trade (See, Thoughts on the US-China Economic & Security Review Commission Report: China in Latin America,  Law at the End of the Day, March 5, 2012 (with useful citations)). My research assistant has prepared a general and brief preview of the issues of CSR in Chinese outbound investment in Latin America.  More to come.

Norwegian Sovereign Wealth Fund Excludes Makers of Reconstituted Tobacco Leaf in the U.S. and China

On May 8, 2013, the Norwegian Ministry of Finance published its decision to exclude the American company Schweitzer-Mauduit International Inc. and the Chinese company Huabao International Holdings Limited from the investment universe of the Norwegian Government Pension Fund Global (GPFG). The decision is based on a recommendation from the Council on Ethics for the Fund.

("Reconstituted Tobacco Leaf (RTL) was a concept pioneered by SWM and is now widely used throughout the tobacco industry for blend construction. By reclaiming remnants of virgin tobacco remaining after manufacture-elements that would otherwise be wasted-we combine them into a malleable sheet. This can then be used directly in the tobacco blend in combination with other tobacco leaf to form a very consistent and high quality cigarette blend."  SWM, Reconstituted Tobacco)

While the decision would not merit much notice--the NSWF has for years  excluded companies tyhat produce tobacco form its investment universe (NSWF Ethics Guidelines Section 2, Para. 1(b)--this decision merits attention because the Ministry this time considered the applicability of this exclusion rule to reconstituted tobacco leaf.  

The Minsitry's press release is available HERE.

The Ethics Council Recommendation is available HERE.

The post reviews these documents and briefly considers its effects on both form and function of due process.  

Xi Jinping's Constitutional Vision: Speech on the 30th Anniversary of the 1982 Constitution

In the wake of the transition of leadership in China at the end of 2012, there has been a notable amount of attention paid to issues of constitutional structure and integrity.  These movements have been met with a certain amount of wariness (cf. Carl Minzner, What Direction for Legal Reform under Xi Jinping, Jamestown Foundation, Jan. 4, 2013), and not without reason.  Moreover, it is not clear if formal expression of constitutional structures will produce functional legal reform, it is clear that senior officials are currently concerned with the constitutional system and its institutionalization along lines that can be harmonized with Chinese political ideology and global expectations of the markers of systemic legitimacy.

(Xi Jinping speech on the 30th Anniversary of the 1982 Constitution)

However, these movements are providing a clearer picture of the way in which the Chinese leadership is consolidating its view of the form of the Chinese constitutional system, and especially the constitutional relationship between the political power of the nation (residing in the Chinese Communist Party) and the administrative authority of the state.  One recent  speech by Xi Jinping merits some attention, Xi Jinping, Speech Given on the 30th Anniversary of the 1982 Constitution (Beijong, Dec. 14, 2012). 

The original and the translation (by my research assistant and Penn State  SJD candidate Shan Gao) are set out below along with some notes and annotations by Shan Gao.

New Paper Posted -- Towards a Robust Theory of the Chinese Constitutional State: Between Formalism and Legitimacy in Jiang Shigong's Constitutionalism

I have been considering the development of modern Chinese constitutionalism.  In particular, I have been considering the unique structures of Chinese constitutionalism beyond the constitutional document and the related issue of its legitimacy within emerging norms of transnational constitutionalism.  As part of that consideration I have been posting the work of Tong Zhiwei, a formidable and innovative constitutional law scholars (Table of Contents for the Series Available Here).

 (Pix (c) Larry Catá Backer 2013)

Recently, Jiang Shigong (强世功) , another of the most innovative constitutional law scholars in China today and I have been engaging in a substantive dialogue on issues of Chinese constitutionalism.  Further to that engagement, I have just posted a new paper to the Social Science Research Network (SSRN) that considers an aspect of this issue: Towards a Robust Theory of the Chinese Constitutional State: Between Formalism and Legitimacy in Jiang Shigong's Constitutionalism.  The abstract follows. The manuscript may be ACCESSED HERE.

Professor Jiang's portion of this dialogue will be published as 强世功, 中国宪政模式——巴克尔对中国“一党宪政”体制的研究 (Chinese-Style Constitutionalism: On Backer’s Chinese Party-State Constitutionalism). The abstract also follows (in English and Chinese).

 

Part XXVIII—Zhiwei Tong (童之伟) Series: How to Restrict Power in the Cage of Regulations

 (Zhiwei Tong, PIX (c) Larry Catá Backer)

For 2012, this site introduced the thought of Zhiwei Tong (童之伟), one of the most innovative scholars of constitutional law in China.   Professor Tong has been developing his thought in part in a essay site that was started in 2010.  See, Larry Catá Backer, Introducing a New Essay Site on Chinese Law by Zhiwei Tong, Law at the End of the Day, Oct. 16, 2010.  Professor Tong is on the faculty of law at East China University of Political Science and Law.  He is the Chairman of the Constitution Branch of the Shanghai Law Society and the Vice Chairman of the Constitution Branch of the China Law Society.

The  Zhiwei Tong (童之伟) Series focuses on translating some of Professor Tong's work on issues of criminal law and justice in China, matters that touch on core constitutional issues.  Each of the posting will include an English translation from the original Chinese, the Chinese original and a link to the original essay site. Many of the essays will include annotations that may also be of interest.  I hope those of you who are interested in Chinese legal issues will find these materials, hard to get in English, of use.  I am grateful to my research assistants, YiYang Cao and Zhichao Yi for their able work in translating these essays.

TABLE OF CONTENTS FOR THE SERIES AVAILABLE HERE.

Part XXVIII—Zhiwei Tong (童之伟) Series: How to restrict power in the cage of regulations

On the Current State of China's Qualified Foreign Institutional Investors (QFII) Programs

Chinese authorities first promulgated the Provisional Measures on Administration of Domestic Securities Investments of Qualified Foreign Institutional Investors in 2002.  It has since been revised in 2006 and 2012 ongoing. 

(Pix (c) Larry Catá Bacjer 2013)

The QFII program is an open market program under the regulation of a national government designed to allow cross border capital markets transactions under controlled conditions.  Foreign investors need to follow regulation when entering the capital market of this country and get the approval of the national government. The recipient nation will limit the foreign investors on many aspects including: qualification, registration, Investment proportion, quota limitation, investment object, investment frame and regulations on transfer in and out of foreign currency. When a country or district fully prepares to wholly open its capital market, this program could be abolished by the national government.

One of my students, Weng Huang, has produced an interesting analysis of China's Qualified Foreign Institutional Investor program.  She argues that the regulation have become a drag on China's ability to deeply engage in global securities markets and that the recent efforts to modify the regulations ought to be the foundation of a comprehensive and liberalizing codification.  The introduction and conclusion follow.  The paper may be accessed HERE.

Legal and Political Education With Chinese Characteristics (通过法学院将法律教育专业化，通过政策学院将政治教育制度化)

I have been reading article on Chinese Legal Education authored by the American scholar Carl Minzner, The Rise and Fall of Chinese Legal Education, Fordham International Law Journal, Vol. 36, No. 2, 2013. Some preliminary thoughts. (最近拜读了Carl Minzner教授的《中国法律教育的起落The Rise and Fall of Chinese Legal Education》(Fordham International Law Journal Vol. 36, No. 2, 2013)一文，受益匪浅，文中对中美两国法律教育的现状与发展做出了深刻的讨论。同为一名法律教育者，在这里就Minzer所涉及的问题提出一些初步的想法)。

(Pix (c) Larry Catá Backer 2013)

One of the most interesting points Professor Minzner makes is that the current bubble in Chinese legal education is causing officials are having to rethink legal education as a response to stress in the model developed over the last twenty years.  Having produced a generation of lawyers and law students who are now increasingly more prominent voices for political reform through law, and hungry for jobs (which require the development of markets for lawyers in the absence of otherwise available jobs), Minzner suggests that Chinese officials are seeking to retrench the legal educational model.  Legal education has foundered, Minzner argues, and officials are seeking to return to models from the past.

This post suggests why this retrenchment makes sense and how it better conforms legal education to the framework of Chinese constitutional organization. Put differently, to appropriately reform legal education in China to conform it to the logic of the system in which it operates, it may be necessary to professionalize legal education for lawyers through law schools and to institutionalize political education for cadres through Party Policy schools.

"Fazhi" 法制 and 法治 in China: Rule of Law; Rule by Law; Rule Through Legal System

Westerners spend a lot of time thinking about "rule of law," not just within their own domestic legal orders, but as a generalized concept of national and international law.  Rule of law and the principle of democratic organization of political power stand now as the foundation of the transnational constitutional order.  (Backer, Larry Catá, "From Constitution to Constitutionalism: A Global Framework for Legitimate Public Power Systems," Penn State Law Review 113(3) 2009).

(Pix (c) Larry Catá Backer 2013)

Chinese academics do as well.  One of the most interesting thing about rule of law in China is that, like its counterparts in Western Europe and the United States, the term has undergone some substantial changes over the course of the years.  More interesting still, and again in a way that mirrors difficulties with the concept in the West, the term can have simultaneous multiple meanings.  (E.g., Deborah Cao, "Fazhi Versus/and/Or Rule of Law?: A Semiotic Venture into Chinese Law," International Journal for the Semiotics of Law 14:223-247 (2001); and generally Deborah Cao, Chinese Law: A Language Perspective (Aldershot, UK: Ashgate, 2004)).

The protean nature of rule of law has been explored in recent years for English language audiences.  (See, e.g., Yuanyuan Shen, "Understanding the Complexity of Law Reform in China," in The limits of the rule of law in China 20-44 (Karen Turner-Gottschang, James Vincent Feinerman, R. Kent Guy, eds., University of Washington Press, 2000) ("Literally fazhi 法制 means 'laws and institutions' or the 'legal system.' But the same spelling in pinyin can refer to fazhi  法治, 'to use law to rule.' Ibid, 24). One of my students, Shan Gao, has produced a short essay on some of the more interesting aspects of the term and its use in China.  What emerges from this brief reminder of the ambiguity of meaning and its political dimension, especially in the context of great ideological struggles among great powers, is both the importance of context and of history in the development of a concept that itself is a place holder for complex relationships between institutional power, political power and the individual.