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Published: 02:20, August 29, 2023 | Updated: 11:08, August 29, 2023
China's economy will not lose its dynamism, vigor
By Ho Lok-sang
Published:02:20, August 29, 2023 Updated:11:08, August 29, 2023 By Ho Lok-sang

The Chinese mainland’s economy no doubt is facing strong headwinds. But it is not going to collapse, nor is it going to fizzle out. The Chinese economy — barring very exceptional unanticipated events that take place outside China — will achieve growth of at least 5 percent this year.

Professor Huang Yasheng, writing for Project Syndicate, correctly highlighted the important role of Hong Kong in China’s road to economic reform and opening-up. However, his assertion that “Hong Kong has been dragged away from the rule of law toward China’s ‘rule by law’ ” and that “soon, China will feel the effects of no longer being able to outsource the rule of law and the other basic ingredients of innovation-driven growth, and it will pay a steep price for getting basic economics so egregiously wrong” is — ironically — itself “egregiously wrong”.

China has, since its reform and opening-up in 1978, followed through with market reforms and learning and acquiring best practices from around the world. However, China only learns things that work, and eschews things that do not work. Adversarial politics may work for other countries, but for the best interests of China, the Communist Party of China has learned that the CPC-led system based on enlisting competent and committed people to govern the country is the best political arrangement.

This is not designed to be for the advantage of a small vested-interest group. In fact, the CPC does not allow power abuses to further private interests. The World Justice Project (WJP) Rule of Law Index 2022 as well as Transparency International figures show that China ranks well above average in “absence of corruption”. The WJP report ranked China at 55th among 140 jurisdictions in “absence of corruption”, well above India’s 93rd place and not much behind Italy’s 39th. Transparency International ranked China 65th among 180 jurisdictions.

Huang wrote: “Chinese laws place no meaningful constraints on Chinese leaders, and Chinese finance is dominated by the statist banking system. While venture capital grew exponentially in the first two decades of the 21st century, big tech companies such as Alibaba, Huawei, and Lenovo were not funded by Chinese VC in their startup phase.”

But he totally ignored China’s legal reforms in the past 40 years. China’s ranking in “criminal justice”, at 69th out of 140, is well ahead of India’s 89th. In “civil justice”, China ranks 73rd as compared with India’s 111th. China’s more-recent initiatives to uphold the rule of law include the introduction of circuit courts in 2015, one in Shenzhen, and one in Shenyang.

The Chinese mainland’s economy no doubt is facing strong headwinds. But it is not going to collapse, nor is it going to fizzle out. The Chinese economy — barring very exceptional unanticipated events that take place outside China — will achieve growth of at least 5 percent this year

In “order and security”, China’s 37th-place ranking is ahead of France’s 44th and not much behind the US in 31st place. In fact, most people who have traveled to China and the US would agree that China is much safer than the US.

As early as 2007, the Property Law of the People’s Republic of China was passed to expressly protect private property that has been legally acquired. To further protect foreign investment stakeholders, the Foreign Investment Law of the People’s Republic of China, adopted at the second session of the 13th National People’s Congress on March 15, 2019, was promulgated for implementation on Jan 1, 2020.

Two scholars from Germany, Katrin Muehlfeld and Mei Wang, in a review article published last year, observed that “IP-related regulations have undergone significant developments over the past few decades, aligning them more closely with established standards”.

China promulgated its first-ever Civil Code in May 2020, which comprises seven parts: General Principles, Real Rights, Contracts, Personality Rights, Marriage and Family, Succession, Liability for Tort, and Supplementary Provisions.

China does rank low in “constraints on government powers”, but that does not mean the government or government officials have totally unchecked powers and can do anything at will. It ranks low because its score for nongovernmental checks was very low. But that does not mean government officials would be able to use their positions for private ends. China’s score for sanctions for official misconduct, at 0.48, is much higher than India’s 0.38, and is higher than the average for upper-middle-income countries.

This reflects, among other things, the Chinese government’s well-publicized channel to report power abuses. China has introduced measures to protect informants even though the whistleblowers must submit their real names so their complaints can be followed up on.

China’s overall ranking in the Rule of Law Index has been mainly dragged down by its poor score in “fundamental rights”. But “fundamental rights” is defined to include voting rights in an adversarial political system. China has opted for a meritocracy system based on fair competition based on merit. What is wrong with that?

I have long voiced my concern over Article 21 in the UN Universal Declaration of Human Rights. Equal political rights should not be narrowly defined to include the right to choose between parties through the ballot box. The National Security Law for Hong Kong forbids activities that undermine China’s political system, which has been seen as an important public infrastructure. Huang says this will ruin Hong Kong SAR’s role to serve China’s need to “outsource the rule of law”. What a joke!

The author is director of the Pan Sutong Shanghai-Hong Kong Economic Policy Research Institute, Lingnan University.

The views do not necessarily reflect those of China Daily.

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