NPC Observer Monthly: July 2023
A rare emergency NPCSC session. Draft Criminal Law amendments on bribery & private-sector corruption. New 5-year plan for overseeing state-owned assets. Plus: trivia on statutory amendments in China.
Welcome back to NPC Observer Monthly, a monthly newsletter about China’s national legislature: the National People’s Congress (NPC) and its Standing Committee (NPCSC).
Each issue will start with “News of the Month,” a recap of major NPC-related events from the previous month, with links to any coverage we have published on our main site, NPC Observer. If, during that month, we have also written posts that aren’t tied to current events, I’ll then provide a round-up in “Non-News of the Month.” Finally, depending on the month and my schedule, I may end an issue with musings on an NPC-related topic that is in some way connected to the past month.
This newsletter is very much a work in progress. If you have feedback on how we can improve this new service, or if there’s anything you’d like us to discuss in future issues, please don’t hesitate to reach out. And if you enjoyed this issue, I hope you’ll consider sharing it. —Changhao
News of the Month
On July 1, the revised Counterespionage Law [反间谍法] (adopted on Apr. 26, 2023) and the Foreign Relations Law [对外关系法] (adopted on June 28, 2023) took effect. You can find recommended analysis of those laws on the linked pages.
On July 25, the 14th NPCSC held an emergency session that was convened by the Council of Chairpersons only a day earlier. At the session, the NPCSC reviewed a draft Criminal Law Amendment (XII) [刑法修正案（十二）] (more on it below) and made two cabinet appointments: it named Pan Gongsheng [潘功胜] as the new governor of the People’s Bank of China (while removing Yi Gang [易纲] from that post); and reappointed Wang Yi [王毅] as the minister of foreign affairs, replacing Qin Gang [秦刚] (who succeeded Wang in December 2022). Qin remains a state councilor.1
As we wrote when the special session was announced (footnote omitted):
[Special sessions] are uncommon but not rare. Since March 2013, the NPCSC has held 9 non-regularly scheduled sessions, out of 75 sessions total (as of Monday). Some served to fast-track legislation (e.g., added session in June 2020 for approving the Hong Kong National Security Law), some were added to help the legislature take on more workload (e.g., January 2021 session), and some were held because of special occasions (e.g., September 2019 session for awarding state honors ahead of the PRC’s 70th anniversary).
What makes Tuesday’s session a true emergency session and sets it apart from those nine special sessions is the haste with which it was convened. It was called just a day earlier, unlike the previous ones, which were all scheduled at least seven days in advance (as far as publicly available information shows), as required by law in non-emergency situations.
On July 26, the NPCSC released the draft Criminal Law Amendment (XII) for public comment through August 24. Contrary to our prediction that this amendment would be “fairly substantial,” it turns out to be quite limited, proposing changes to only seven articles of the Criminal Law. The draft focuses on bribery (specifically, giving bribes) and corruption in private enterprises.
Bribery: The draft would, first, bring the punishments for giving bribes in rough parity with those for accepting bribes (art. 390, para. 1). The statute currently authorizes longer sentences for the least serious cases of bribe-giving than for equivalent instances of bribe-taking. Under the draft, both offenses would come with three identical sentencing ranges (as far as custodial sentences go). To crack down on bribe-giving (which is under-prosecuted in practice), the draft also specifies six instances that warrant heavier penalties within the sentencing ranges—for instance, bribing multiple people, bribery by (not of) public servants, and bribing officials working in several listed areas (e.g., law enforcement, education, food and drug regulation) (art. 390, para. 2). Finally, the draft would add a higher sentencing bracket for more serious cases of three crimes: bribe-taking by a public entity (art. 387); bribing a public entity (art. 391); and bribery of civil servants by an entity (art. 393).
Private-sector corruption: The Criminal Law currently prohibits certain conduct by the management or employees of state-owned enterprises (SOEs) that falls under the heading of breach of trust. As relevant here, it bars an SOE’s directors or manager from operating a business of the same type as that SOE (art. 165); bars an SOE’s staff from illegally seeking profits for their family or friends by taking advantage of their positions (art. 166); and bars an SOE’s management from disposing of state-owned assets at a low price for personal gain (art. 169). The draft would extend these three prohibitions to those working at equivalent positions in private enterprises.
An English translation of the draft by China Law Translate is available here.
On July 27, the 14th NPCSC released its five-year (2023–2027) plan for overseeing the management of state-owned assets. I have neither the time nor the expertise to fully dissect the plan, which totals over 5,600 characters. In short, it lists the State Council’s reporting obligations regarding its management of state-owned assets during the next five-year cycle and outlines ways to improve the State Council’s reporting and the NPCSC’s oversight on this front.
The plan ends with a section on “strengthening legislation in the area of state-owned assets” that previews the NPCSC’s future legislation in this field. It reveals goals to formulate a comprehensive State-Owned Assets Law; to amend the Law on State-Owned Assets of Enterprises according to “practical needs”; to elevate the State Council’s regulations on the state-owned assets of administrative organs and public institutions to a statute “at the appropriate time”; and to study the feasibility of legislating on state-owned natural resource assets.
China’s Criminal Law & Statutory Amendments
Did you know that the Criminal Law Amendment (XII), once passed, will in fact mark the fourteenth time the Criminal Law is amended?
That’s because the statute was twice amended by instruments not styled as Criminal Law Amendment #. The first instrument, a 1998 NPCSC decision,2 updated the Criminal Law for the first time after its comprehensive overhaul in 1997. It criminalized the fraudulent purchase of foreign exchange3 and amended the existing crime of evading foreign exchange control, among other things. The other amending instrument, the 2009 NPCSC Decision on Amending Some Laws, replaced the word “requisition” [征用] with “expropriation or requisition” [征收、征用] in two Criminal Law provisions,4 consistent with the 2004 constitutional amendment (which similarly altered the relevant constitutional language).
“Amendments” [修正案] and “amending decisions”5 [修改决定] are in fact distinct forms of statutory changes in China. And the Criminal Law is so far the only statute that has been updated by “amendments” (in the formal, not functional, sense).6
Though both “amendments” and “amending decisions” spell out the changes made article by article (unlike a “revision” [修订], which substitutes a whole new statutory text), an “amendment” doesn’t alter the numbering of articles in the original law. So the Criminal Law is the only statute that has articles numbered “X条之Y” (Article X–Y), denoting newer articles inserted after the original Article X. For the same reason, it is also the only law with an article marked “deleted” (that’s article 199, which, before its repeal in 2015, authorized the death penalty for the severest cases of fraudulent fund-raising). For a law updated by an “amending decision,” by contrast, its articles—with all the changes incorporated—will be sequentially numbered anew.
That brings us to the other key distinction between “amendments” and “amending decisions” (albeit one that may no longer exist). After the NPCSC approves an amending decision, it has always promulgated a full text of the law as amended. But it hadn’t done so after adopting a Criminal Law Amendment (or the 1998 decision on forex crimes) until 2021, so for almost 25 years the only official text of the Criminal Law consisted of its 1997 text as amended by the 2009 decision (which came after the statute had already been amended seven times)—and 11 standalone amending instruments (the 1998 decision plus the first ten Criminal Law Amendments).
Then things changed in December 2020 with the enactment of the Criminal Law Amendment (XI). Recognizing the need to “ensure the uniformity of the Criminal Law’s text,” the NPC Constitution and Law Committee recommended the promulgation of an official text incorporating all changes adopted since 1997. Such a text was then published in the NPCSC Gazette’s March 2021 special issue, along with the statute’s 1997 text and all subsequent amending instruments. Whether this will become a routine practice accompanying a new Criminal Law Amendment we shall wait and see. (By the way, the NPCSC has recently released a full English translation of the Criminal Law as amended in 2020.)
That’s all for this month’s issue. Thanks for reading!
Our preview of NPC-related events in August 2023 is now live on our main site. If you wish to get all our coverage in your inbox in real time, subscribe here!
Could the NPCSC have constitutionally removed Qin Gang as a state councilor as well? I’ll have more to say on this question soon. Stay tuned!
The decision is titled NPCSC Decision on Punishing the Crimes of Fraudulently Purchasing Foreign Exchange, Evading Foreign Exchange Control, and Illegally Trading in Foreign Exchange [全国人民代表大会常务委员会关于惩治骗购外汇、逃汇和非法买卖外汇犯罪的决定].
Fraudulent purchase of foreign exchange remains the only criminal offense not included in the Criminal Law, as the 1998 decision didn’t amend that statute when prescribing the new offense. Before the Criminal Law’s comprehensive revision in 1997, such standalone decisions that provided for new offenses without amending the law were common (go take a look at the law’s two annexes).
Article 381 criminalizes refusing requisition or expropriation for military use during wartime, whereas Article 410 prohibits civil servants from, among other things, unlawfully approving the requisition or expropriation of land.
An “amending decision” refers to an instrument in the form of NPC(SC) Decision to Amend ××× Law. Under current practice, such a decision is styled as “修正草案” (“draft amendment” for lack of a better translation) before it passes.
The Civil Code will also be updated by “amendments,” according to a legislative official.