This past December (2015) in Beijing, I was quite privileged to have had a chance to speak with Liao Shiping, Associate Professor of Beijing Normal University Law School. Professor Liang has been a visiting scholar in Hague Academy of International Law, and serves on various ad hoc committees in the Chinese Ministry of Foreign Affairs and the Ministry of Commerce. We spoke to issues of corporate social responsibility, the nature of law and public policy, and trade issues, focusing on the Trans Pacific Partnership, from a Chinese perspective.
I hopes that some might find the points raised of interest, the Foundation for Law and International Affairs (FLIA) has prepared a brief rough preliminary English/Chinese transcript summary of portions of our conversation, prepared by GAO Shan. It follows. The audio transcript may be available soon.
Globalization, Corporation Social Responsibility, policy and law, and TPP, the conversation between Backer and Professor Liao on these hot topics is intriguing and thought provoking. Here is the edited audio transcript of the conversation for our readers.
Date: December 2015
Conversation: Professor Larry Catá Backer and Professor Liao shiping.
Editing, Translation: Shan Gao
I notice your research areas covers a wide range of topics, from corporation law, constitution law into international affairs and globalization. What’s your approach, for example, for corporate social responsibility?
The construction of new global framework is significant impacts by the nature of the state. One cannot understand the state, one cannot understand global regulatory framework. The closer you look, you more you can see the necessity of the intimate connection thereof.
Let me give you an example. In corporate social responsibility, The U.S. and EU academics and practitioners are completely segregated. There are one group of professionals treated this issues as an international law, and there are another group treated it as a corporate law issue. You can see there is a parallel discussion on the same issue with different angels. It is only very recently that they realize the connection.
As for CSR, what I am trying to do is to theorize the way CSR could be harmonized with the ruling party basic line, how it could be embedded with the planning that is being developed for next stage of socialist modernization. The international CSR rules have political roots in china’s own terms within the framework. There are strong foundations for CSR within the ruling party’s line has been developed during the last 20 years. This just transposing. Once you transposing that language, then function of objective of CSR are very easy to transpose into Chinese context.
There is an assumption that to follow the policy rather than law for corporation in China, your insight? 在中国企业有着重政策轻法律的倾向，您如何看待？
It is true that there are lots of changes when it comes to policy. The last thing you want is to have a regime rigidly tied up to its past, especially when society progresses. You need flexibility. But you also need a foundation of rule of law governance, the kind that provides flexibility, constrained by its foundational substantive objectives.
The West's perspective of what is necessary in order to create a legal regime for the regulation of societal activity is not much different from the goals that Chinese political culture trying to reach. In both cases this permits imposition on enterprises of certain sets of responsibility that is for the health of long term development.
Further, law is important. There is an increasing discourse in China on law. Evidenced by the modification or development of the ruling party's basic line, which requires all party cadres to fully and faithfully obey the law. If you look in that perspective, a cadre who failed to do that may violate the party discipline as well as law. Maybe this is provocative, but it does suggest a complex process of reworking and re-inventing judicial system.
Corporate social responsibility in the West is very easy to understand as a human rights issue in the corporation. At the same time human rights issues are easy to understand in in the Chinese context as the obligations of the state and enterprise to society, workers and persons. This is made clear in both Party and state constitutions. The translation of human rights language from the Western to the Chinese context requires some sensitivity.
This is what happens to LGBT issue in China. It is not as sensitive as the human rights issue.
In socialist Cuba, LGBT is not a sensitive issue either. As you can see, the sexual minority can comfortably fit into the objective of harmonious society. It is relevant to the current political agenda.
In West, the discourse of human rights is widely expanded, such as environmental issue is traditionally considering as a separate issue but now is understood also as a human rights issue. China has also begun looking at environmental issues as central to socialist modernization.
China can begin some considerations about TPP and especially SOEs issue after the TPP been approved by U.S. congress. For Americans, SOE issue is a competition and subsidy issue. China can look into the approach of EU for subsidy issue of its own enterprises. It provides a normative template that might be useful. The EU has adopted an appropriate approach for the relationship between state and SOEs in markets.
There are dialogues between U.S. and China on TPP and China did look into EU law. Chinese government still have many concerns even with these approaches.
You are correct. Yet there are maybe two approaches helpful in the negotiation: Differential standard and differential time table for conformity. 你说的很对。在这种国际谈判中可能两种策略会有效：标准差别和履行义务时间表差别。
Another issue is the coordination between different agencies with different concerns that not being effectively conveyed during the dialogues.
This is very true. TPP is massive. When TPP and TIPP coming in, it potentially shapes a new rule framework for global trade. My sense is that the tendency since 2006 or 2007 is to have powerful states together to adopt consensus. The influential group is heavily involved and no important state wants to be locked out of that consensus making. It is a very interesting time that states decide to remain or leave the club.
This is why the lawyer’s profession is very important in this context. Not only clear law, lawyer also prefer ambiguous law because it make it possible for legal business.
I agree. The law itself can be very clear but the application itself has always been in ambiguity. It is the lawyer’s job to take the clear law and apply it into very messy context. But well, lawyer want the law remain ambiguous in order to have some flexibility. But it also interesting if you look at our history, which suggests that law remains as a traditional but less effective means to regulate societal activities and people are getting impatient for this.
In terms of policy and law, that is why China would like to join things like WTO, so it provides platform for communication. China could convey its concerns and thoughts to other nations before the dispute end in international court.
I agree with you about such communication, but even so there will come a point, the understanding will only sharpen the knowledge of contradiction, and one has to prepare for that as well.
In the context of SOEs, the difficulty is the seamless connection between public and private sector, which has been rejected by other countries, but is necessary in China. If it has been rejected in one context, it will be foundation of another. In order to break the contradiction, one has to find common ground in a set of rules that produce equivalent effect among enterprises in markets. Neither U.S. nor China has reached that point in negotiation. Or either could find alternative to adjust rules to attain such an equivalent.
Things we need to put on the table before negotiation. China has been vigorously making efforts try to find such equivalent at the negotiating table.
The heart of the problem revolves around the advantage to Chinese SOEs of their seamless relation to the state which US companies do not enjoy. That competitive advantage must be addressed as a starting point for negotiation. Otherwise, U.S. and China will talk in circles that leads nowhere. To move negotiations forward it may be necessary for the US to concede that it is necessary to preserve SOE operations because the such advantage is the foundation of Chinese system. But it may be necessary for China to concede the advantages of the SOE relationship in comparison to US enterprises. The key to success in negotiation would be to neutralize that advantage; perhaps by determining the cost and pricing of preserving such advantage and offering an equivalent value advantage to the US. The Chinese would then have to neutralize those advantages in enterprise competition or to find a pricing equivalent that U.S. could accept it as a waiver to our objections. This is a difficult and sensitivity process that cannot distracted by popular passion as it will be useless for the interest of both nations. That explains in part why the U.S. president gets much criticism.