PRC Law And The Demise of Hong Kong In 2024

Executive Summary:

• New National Security legislation, which emulates recent PRC laws, and the potential torture of a witness in the ongoing trial of Jimmy Lai, is characteristic of the erosion of legal norms in Hong Kong as it moves towards full unification with the CCP regime.
• Attempts at regularization and institutionalization of the PRC law in the last two decades are undercut by irresolvable tensions at the heart of the system, leading to instability. “Socialist rule of law with Chinese characteristics” is a paradox, where “rule by law” is intended to enhance the regime’s capacity for stability but cannot be reconciled with the “rule by man” personalization of the system under Xi Jinping.
• Hong Kong illustrates the instrumentalization of PRC law, whereby the aim of national unification allows the law to be overcome. The CCP, which frequently operates in an extralegal capacity within its own borders, supervenes in the city to assert its ultimate authority.
• How recent developments unfold, including the liquidation of Evergrande–—especially in light of recent legal attempts at “harmonization” of the two distinct legal regimes through reciprocal decisions—-will expose the political prerogatives that outweigh actual progress in legal system development.

Over the last week, several legal developments in Hong Kong have emerged, with seeming contradictory implications. Interest in these three legal developments extends beyond the coincidence of their arrival. Rather, the fact that they have all occurred this week exposes the uncertainties that surround the increasingly porous links between the two jurisdictions. This has serious implications for understanding what the aims of the Chinese Communist Party (CCP) are regarding the “One Country, Two Systems (一国两制)” framework under which the mainland and Hong Kong nominally operate. At a higher level, it also reinforces our understanding of the CCP’s disregard for international legal norms and agreements when they are found to be inconvenient for delivering its ends—in particular its core aim of national unification, which intends to wholly absorb Hong Kong into the PRC (to say nothing of its designs on Taiwan and other territories it claims). At the most fundamental level, it exposes the conceit behind Chinese President Xi Jinping’s conception of the rule of law (依法治国; more accurately translated as ‘rule by law’)” and “socialist rule of law with Chinese characteristics (中国特色社会主义法治)” over the last decade. Namely, that the party-state has the capacity to operate outside of state law—something which it frequently does, especially in cases that impinge on matters relating to national security. In 2024, that could include an increasingly broad array of issues.

On Monday, the High Court in Hong Kong issued a “winding up order” against China Evergrande Group, the Cayman Islands-incorporated conglomerate whose founder was once among the world’s richest people before being detained in September (Judiciary.hk, January 29). $242 billion—equivalent to more than 90 percent—of the company’s assets are located in the Chinese mainland. It is unclear whether mainland law will recognize this judgment and allow the liquidator to seize assets within the People’s Republic of China (PRC), though Chinese media has played down the likelihood of this, or any negative fallout for its property sector (Yicai, January 29; Cailianshe, January 29).

Monday also saw the Mainland Judgments (Reciprocal Enforcement) Ordinance come into effect (Elegislation Hong Kong, January 29). This piece of legislation permits civil and commercial judgments made in the mainland to be recognized and enforced in the jurisdiction of the Hong Kong Special Administrative Region (HKSAR), further eliding distinctions between the two legal systems. On its face, this legislation would appear to sanction the possibility of Evergrande’s liquidator to perform its function within the mainland. Experts believe, however, that reciprocity will not be extended in this case (see, for example, Trivium, January 30). Clearly there are political (not to mention economic) reasons for Beijing doing so, but this does call into question the robustness and efficacy of China’s legal regimes.

While significant distinctions between the two systems do still exist, the Security Bureau of the Hong Kong Government’s release of a public consultation document titled “Safeguarding National Security: Basic Law Article 23 Legislation” this past Tuesday indicates that the overall trend is in the direction of supplanting Hong Kong’s common law system (HKSAR Security Bureau, January 30). Article 23, which forms part of Hong Kong’s Basic Law, is intended to supplement the 2020 National Security Law (NSL), which was imposed externally by Beijing. Xi Jinping’s tenure as Chairman of the CCP has been heavily intertwined with national security concerns—particularly by preventing interference by external forces. Foreign espionage-related scandals punctuated his rise to power in the early 2010s, and the vibrant pro-democracy protests at the end of that decade are also described as a foreign-induced color revolution (Xinhua, September 24, 2021).

Mao Zedong originally constructed the PRC legal system based on the model of the Soviet Union. The Soviet Union’s model, for its part, was borne out of Lenin’s adaptation of the European-inflected tsarist system that he inherited. It is best viewed as a tool of as part of the Party’s inventory of tools for governance. In the words of the Supreme People’s Court (the PRC’s highest court), “the people’s courts are a highly political professional institution, and a highly professional political institution (人民法院是政治性很强的业务机关，也是业务性很强的政治机关)” (SPC, August 27, 2023). Following the Soviet model that preceded it, the main body of the PRC state constitution did not mention the Party at all for much of the country’s history. Instead, it claimed that no “organization or individual is privileged to be beyond the Constitution or the law [Art.5]” (NPC, March 14, 2004). This was amended in 2019, however, when Xi Jinping made the Party’s authority explicit by adding the following to Article 1: “Leadership by the Communist Party of China is the defining feature of socialism with Chinese characteristics” (NPC, November 20, 2019). [1] This is one of many indications of Xi enhancing the Party’s power within the PRC’s politico-legal framework. However, in making what was formerly implicit explicit, the Party’s extralegal (or perhaps supralegal) modus operandi is also articulated.

Hong Kong has often served to illustrate the defects of this conception of the law, often to the detriment of its population. Within the “One country, two systems” framework, Beijing is somewhat constrained in how it can operate in the territory. Given the political prerogatives at stake, however, the PRC government has found convenient workarounds. For instance, the Standing Committee of the National People’s Congress (NPCSC) uses specific legal “decisions” to override Hong Kong’s Basic Law. These have been referred to as a kind of “quasi-legislative decisions (准法律决定),” because they do not require standard procedures or scrutiny to be passed by the NPC. [2] One such decision paved the way for the NSL (Xinhua, May 28, 2020). Other interpretations of the Basic Law by the NPCSC have contradicted Hong Kong’s highest court, including by introducing practices to undermine local authorities’ jurisdiction (For instance, Xinhua, March 11, 2021).

The “one country, two systems” framework lives on only in political rhetoric. This has been an inevitable outcome since the handover in 1997. As a report from the time makes clear, the framework was only ever “symbolizing taking an important step forwards in the great cause on national unification (标志着中国统一大业向前迈出了重要一步)” (Xinhua, accessed February 1). In pursuit of that end, political priorities again have allowed for the circumscribing of Hong Kong law. For instance, what is euphemistically termed the “harmonization” of the distinct legal regimes of the two jurisdictions has been an explicit part of Beijing’s Greater Bay Area strategy. One legal document details “promoting the convergence (linkage) of judicial legal rules … between Guangdong, Hong Kong, and Macao (在推进粤港澳司法法律规则衔接，深化粤港澳司法交流合作)” (SPC, June 23, 2022 ; See also, China Brief, January 19). Gestures towards “harmonization” disappeared this week following the release of the Article 23 publication document. This piece of Hong Kong legislation appears to simply transplant wholesale many features of Beijing’s security legislation to the HKSAR (Hong Kong Law & Policy, February 1).

This week has also made unambiguous the Party’s capacity to operate outside the law. Mere days after the United Nations’ Human Rights Council (OHCHR) held a review of the PRC’s human rights record, the Council warned that a witness in the ongoing trial of Jimmy Lai had possibly been tortured by the Chinese regime (United Nations, January 31). Clearly, for the CCP, the law is an extension of politics by other means. As such, the Party can decide that international law does not apply inside the PRC, that Hong Kong’s law does not have to apply within its own jurisdiction, and that PRC law can be circumvented by the Party’s own actors. This has always been the case in the PRC, but it is increasingly causing problems for people inside and outside the country. As for Hong Kong, which for decades has been the engine for the PRC’s impressive growth (the assurances of its rule of law system attracted Evergrande and other such firms [3])—both legal and extralegal overreach is pushing the city more towards its derisory moniker of “Hong Kong District, Shenzhen City (深圳市香港区).” How long the city will retain its uniqueness, or its utility to Beijing, remains to be seen.

“Socialist rule of law with Chinese characteristics (中国特色社会主义法治)” is perhaps the greatest antinomy of the PRC system. Its central paradox strikes at the heart of the regime’s capacity for stability through the tension between “rule by man (人治)” and “rule by law (法治).” [4] This can be ascribed to the fact that while Xi Jinping has made considerable efforts to deepen the institutionalization of the PRC’s legal system, his concurrent centralization of power within his own person, his erosion of institutional norms, and his suffusion of the Party throughout the political-legal apparatus undermines these efforts. By attempting to identify the rule of law with the “rule of virtue” and equating both with the dicta of one man—Xi himself, these “Chinese Characteristics” negate the possibility of and are deleterious to social stability (Qiushi, December 16, 2022; MOJ, February 22, 2022). [5] One upshot will surely be acute instability when a succession crisis arises, as becomes likelier by the day. Another, closer at hand, one can already witness in real time as international and public confidence seeps out of Hong Kong (Hang Seng Index, accessed February 1). Marx famously described the law as a tool of the ruling elite. Its abuse by the Party’s current leadership only reinforces the distance between that elite and the people they claim to represent.

Notes

[1] The PRC constitution is not to be confused with the CCP Constitution, which can be found here: http://www.chinatoday.com/org/cpc/Constitution-of-Communist-Party-of-China_202210.pdf

[2] See this post for a more in-depth explanation of what these legislative actions are and how they function: https://npcobserver.com/2021/02/22/demystifying-the-npcs-quasi-legislative-decisions/

[3] See: Huang, Yasheng. The Rise and Fall of the EAST: How Exams, Autocracy, Stability, and Technology Brought China Success, and Why They Might Lead to Its Decline. Yale, 2023.

[4] For historical context, see Jenco, Leigh K. “‘Rule by Man’ and ‘Rule by Law’ in Early Republican China: Contributions to a Theoretical Debate.” The Journal of Asian Studies 69, no. 1 (2010): 181–203.

[5] As Benjamin Liebman observed a decade ago, the “law-stability paradox suggests that party-state leaders do not trust legal institutions to play primary roles in addressing many of the most complex issues resulting from China’s rapid social transformation. This signifies a retreat not only from legal reform, but also from the rule-based model of authoritarian governance that has contributed much to the resilience of the Chinese system.” Liebman, Benjamin L. “Legal Reform: China’s Law-Stability Paradox.” Daedalus 143, no. 2 (2014): 96–109.