The document discusses the influence of the Chinese Communist Party (CCP) on business laws in China. It explains that the CCP is the main lawmaking body and all business laws must be discussed and passed by the CCP. It describes the legislative process for passing laws and the roles of the Politburo Standing Committee and the National People's Congress. The CCP has significant control over business law reforms and strategic plans to further open China's market.

1. The CCP’s influence on Business Laws
in China.
By Riona Coleman
14D62299
Module: Business Law.
Shanghai University.
Word Count: 2137

2. China has one of the oldest legal systems worldwide. In the 20th and 21st century,
the Chinese law system was a combination of both Chinese traditional values and
western influences. Business law is the main body of law that applies to the
rights, relations, and conduct of persons and businesses engaged in commerce,
merchandising, trade, and sales. The Chinese Communist Party (CCP) is the law
making body in China. Therefore, all business laws in China must be discussed
and allocated by the CCP. The CCP needs to take on board the opinions of
business people, in order to review their laws, to create a harmonious
relationship between party and state. In this essay I will examine the influence of
the CCP on passing business laws in China. I will explain how the CCP has
decided to govern the PRC. Who are the CCP and how is it structured? I will take
a deeper look at the Politburo Standing Committee and the People’s Congress
and I will describe the legislative process involved in passing a law.
Business law covers numerous aspects of law in China. These include; carriage
laws (by land and sea), principal and agent laws, merchant shipping laws,
insurance laws, bills of exchange, guarantee laws, contract laws and partnership
laws. The CCP have a huge influence on business law in China and in this essay I
will explore the relationship between the two. The Chinese Communist Party
(CCP) is the leading political party in the Chinese government. A party is a group
of people who share the same ideas about the way the country should be
governed. Political parties have a wealth of important roles. These include; law
making and altering, controlling what happens in parliament and managing the
state. (Ryan V. 2010.) The CCP top leaders form a committee called the
‘Politburo Standing Committee’ (PSC) and they are the primary lawmakers in
China. Meanwhile the National People’s Congress (NPC) manages the law
preparation steps, policy proposals, policy reviews, votes, passage and
publication of the enacted laws.
Who are the CCP? Mao Zedong set up the CCP in 1921, on the principles of
Marxism-Leninism. Marxism is the political theory of “social change in terms of
economic factors, according to which the means of production provide the
economic base which influences or determines the political and ideological
superstructure.”(Oxford Dictionary, 2014.) Marx and Engels predicted that
capitalism would be overthrown and communism would prevail, eliminating
class structures. Leninism is the same theory applied by Lenin. The CCP gained
popularity through the years and now it is the “absolute power center of Chinese
politics”. The CCP follows the constitution and principle of democratic
centralism. Today, the CCP claims eighty two million members. This figure
obviously makes it the biggest party in the world, but considering the 1.3 billion
people; it only justifies 5 percent of the population. However, the party stands
unsympathetically, “assumes overall responsibility and coordinates all sides of
the government, congress, political consultative conference, and the masses
organizations.”(Ming Xia, New York Times.) The party can be extremely difficult
to join and so, members are often a symbol of status, wealth, intelligence and
power. (Ming Xia, New York Times)

3. Every five years, two thousand representative delegates, of the National Party
Congress (NPC) meet to set major policies and elect the Central Committee (CC).
The CC will comprise of approximately three hundred and seventy members
including ministers, provincial leaders, regulatory officials and military officers.
(Beina Xu, 2013) In 2002, 98.6 percent of CC members had a college education.
(Saich, P.124.) The CC elects twenty-five members into the Political Bureau and
they become the ‘board of directors’ of the CCP. Within the Political Bureau there
are six to nine Politburo Standing Committee members who are the most
authoritative members, and have the most power. (Brittanica.com) They work
alongside the Chairman to rule the country. The Standing Committee, the State
Council, and the Central Military Commission are the vital organs of China’s
body, the Standing Committee being the heart of Chinese politics and the law
making body. Titles here include: General Secretary, President, Chairman and
more. The National People’s Congress (NPC) is the national legislature of the
PRC. The allocation of power in the CCP runs from the top down, in a pyramid
like structure. “At the bottom is the network of some 3.51 million ‘primary party
organizations’ based in work-units, neighborhoods or in villages and where
there are 3 or more full party members.”(Saich, P.116) From there, status moves
up through county and provincial levels to the NPC. Centralized democracy
exists within the party when decision making and only top leaders negotiate who
the successive leader will be. (Beina Xu, 2013.) It is common knowledge in China,
that in order to move up the ranks within the CCP, its essential “to develop
personal relationships (guanxi) with a powerful political patron” (Saich. P.120)
The lower ranking officials have little say in the top business law bills. Under the
Law on Legislation, only the National People’s Congress (NPC) and its Standing
Committee, the country’s top legislature, can make laws.
The Poliburo Standing Committee (PSC) is a committee of the top leaders in the
CCP. It is composed of five to nine members. They conduct policy discussions and
make all major decisions including certain business law bills. According to the
Chinese constitution, the General Secretary of the Central Committee is obliged
to be a member of the PSC. In practice, the PSC is the most powerful decision
making body in China, and its decisions have the force of the law. The PSC is the
highest chain of command and holds overall power when deciding if a business
law is worthy of passing or not. The National People’s Congress (NPC) is the
largest law making, parliamentary body in the entire world. In 2013 it had 2,987
members.In the Third Plenary Session, which took place in Beijing in November
2013, the NPC and PSC made strategic plans to reform business laws in China.
These plans included;
• State-ownership and monopolistic industries reform – The Chinese
government is taking steps to expose State-Owned Enterprises (SOE) to
greater market forces, aiming to make them more efficient and
competitive.
• Financial reform – Greater RMB exchange rate flexibility, speeding up of
interest rate liberalisation and steps to encourage cross-bordercapital
flows in both directions.
• Political and administrative reforms – One of the most significant portions of
the Third Plenum announcement, aimed at improving government and

4. improve judicial process, to help address rising social tensions.
• Market entry system reform – Potentially significant further ‘opening up’ of
China’s economy but expected to be implemented in a pilot free trade
zone first, before potentially being extended nationwide.
• Other structural reforms – Including vows to liberalise pricing for water, Social
policy reforms, gasoline, natural gas, electricity, transportation,
telecommunication and more. (Gov.uk. 2014)
All of these strategic plans and business law reforms will have huge affect on
Chinese companies and foreign companies based in China. The CCP is complete
control over all law reform in the PRC.
Before a business law is passed it goes through a number of legislative stages.
These stages begin by creating the law-making plan and drafting new business
laws. The law-making plan is essential as it ensures that the law-making
activities are appropriate and most effective. Law does not require this first
stage, but it does help to avoid any disputes further along in the process. The
next stages in passing a bill are the most important and must be carried out, by
law. These stages are called Submission, Review and Passage of the bill. The bill
must be put on the agenda, explained and reviewed by the NPC and the SC. The
SC must debate the bill thoroughly and review it profusely. The bill must be
consulted with concerned agencies and all opinions must be considered. The SC
will then decide whether the bill is worth pursuing or if it should be withdrawn
from the agenda. The next stage of passing a bill is The Vote. The Vote can be
carried out by raising hands or by using electronic boards. If more than half of
the NPC and SC vote in favor of the bill, the bill will be passed. The final stage of
passing a bill in China is Publication. The signing by the president of an order on
publication of the law is compulsory step in the legislative process. This action
indicates the completion of the legislative process and confirms that the law is
the one passed by the legislative body. (Ministry of Justice, 2013.)
An example in business law; A new law on employees working conditions is
drafted. Members of the NPC create the law making plan to ensure it is carried
out in a professional and appropriate manner. The new law on employees
working conditions is put on the agenda to the NPC. The law is presented to the
members and is thoroughly debated and reviewed by both the NPC and the SC. A
vote is carried out by means of the electric board. Seventy five percent of
members vote in favor of the new law. The President, Xi Jinping, signs the bill
and therefore, the new employees working conditions law has been passed.
In conclusion, business laws in China go through many stages of discussion by
the CCP. The CCP is China’s main political party and law making body and holds
complete control over business laws in China. The party has made strategic plans
for business law reform in attempt to open up the market and to allow
businesses in China to prosper. The PSC and NPC are the two committees that
debate, vote and pass laws in China. When a business law bill is drafted there are
many stages it will pass through before it is made law. At present, business law

5. reform is a matter of current affairs in China. The CCP have promised to
strengthen its judiciary at a recent plenary session and it is expected that the law
review and reform will bring benefits to businesses in China. Overall, it is clear
that the CCP plays a major role in influencing law making in China. It is a
powerful party that enables the country to run smoothly and as efficiently as
possible.
Bibliography
1. Ryan V. 2010. “ What is a political party?” Available at:
(http://www.technologystudent.com/pse1/polprt1.htm) [Accessed on 12
December 2014]
2. Ming Xia. New York Times. “The Communist Party of China and the "Party-
State" Available at: http://www.nytimes.com/ref/college/coll-china-politics-
002.html [Accessed on 12 December 2014]
3. Beina Xu, 2013. “The Chinese Communist Party”. Available at:
http://www.cfr.org/china/chinese-communist-party/p29443. [Accessed on
12 December 2014]
4. Saich Tony, 2004. ‘Governance and Politics of China’. Page 124.
5. Britannica.com. 2013. ‘Chinese Communist Party’
Available at: http://www.britannica.com/EBchecked/topic/112450/Chinese-
Communist-Party-CCP [Accessed on 13 December 2014]
6. Saich Tony, 2004. ‘Governance and Politics of China’. Page 116.
7. Beina Xu, 2013. “The Chinese Communist Party”. Available at:
http://www.cfr.org/china/chinese-communist-party/p29443. [Accessed on
13 December 2014]
8. Saich Tony, 2004. ‘Governance and Politics of China’. Page 120.
9. Gov.uk. August, 2014. ‘Overseas Business Risk- China’ Available at:
https://www.gov.uk/government/publications/overseas-business-risk-
china/overseas-business-risk-china
10. Ministry of Justice, 2013. ‘THE LEGISLATIVE PROCESS IN CHINA.’ Available at:
http://www.moj.gov.vn/en/ct/Lists/TalkingLaws/View_Detail.aspx?ItemID=
110