December 2023: Overview of New Amendments to China's Criminal Law & Charity Law
Local use of collective punishment to combat telecom fraud halted. New mini law on process for reining in rogue legislation. Plus: local total bans on fireworks ruled unlawful.
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 discussions of an NPC-related topic that is in some way connected to the past month.
My apologies for getting this issue out later than usual. Last week I was busying observing, among other touristy things, the NPC’s British counterpart (from afar). If you’re enjoying the newsletter, I hope you’ll consider sharing it. —Changhao
News of the Month
On December 4, China celebrated its 10th National Constitution Day. To mark the occasion, the NPCSC General Office, together with the Central Propaganda Department and the Ministry of Justice, held a symposium, where NPCSC Chairman Zhao Leji gave a speech. Xi Jinping also issued “important instructions” on “resolutely safeguarding the Constitution’s authority and dignity, promoting its improvement and development, and better leverage the Constitution’s important role in governing the country.” Nothing in these official statements stood out to me, however, and more important developments concerning constitutional implementation would come a few weeks later.
On December 24, the NPCSC General Office convened the sixth annual seminar on “thoroughly studying and implementing” Xi’s “important thought on upholding and improve the people’s congress system,” where Zhao Leji also gave a speech. The priorities that Zhao laid out track what Xi emphasized in his seminal speech at the 2021 Central People’s Congress Work Conference.
The main event last month was the 14th NPCSC’s seventh session, which was convened by the Council of Chairpersons on December 18 and took place on December 25–29. (The Council also approved the NPCSC’s 2024 work priorities as well as plans for its legislative, oversight, and delegates work, but they won’t be released until late April.) The NPCSC reviewed a number of bills and reports during the five-day session and took various actions on the last day.
I will discuss two new laws and one report in detail below. First, briefly on the other developments:
The NPCSC decided to submit the draft revision to the State Council Organic Law [国务院组织法] to the 2024 NPC session for review. My translation of the bill’s latest draft is available here, and a comparison chart (in Chinese) here.
The NPCSC passed the Law on Ensuring Food Security [粮食安全保障法], effective June 1, 2024. The Foreign Agricultural Service of the U.S. Department of Agriculture previously posted an overview of the Law’s second draft from October 2023 and said it would post a translation and an update upon the Law’s passage, so those interested should keep an eye out.
The NPCSC approved an overhaul of the Company Law [公司法], which will take effect on July 1, 2024. To quote one comprehensive summary, the revision introduces “sweeping changes to company capital rules, corporate governance structures, liquidation procedures, and shareholder rights, among others,” and “has significant implications for companies in China—both old and new—providing more flexibility in areas such as share issuance and corporate structure while strengthening the protection of shareholder rights.”
The NPCSC appointed Dong Jun [董军], former commander of the People’s Liberation Army (PLA) Navy, to succeed Li Shangfu as China’s new defense minister. It didn’t also appoint Dong as a state councilor or a member of the Central Military Commission—positions that China’s defense minister customarily also holds. It’s possible that the NPC would make those appointments at its upcoming 2024 session, but so far its preliminary agenda shows no such plan.
The NPCSC also announced that nine senior military officials had been dismissed as NPC delegates. It has not released the accompanying report by the NPCSC Delegate Credentials Committee that would briefly explain the reasons for their disqualifications, but commentators believe that the purge is connected to a corruption probe over equipment procurement by the PLA Rocket Force.
The NPCSC decided to authorize Macao to exercise jurisdiction over a V-shaped area of roughly 3,700 m2 in the neighboring mainland city of Zhuhai so that Macao can build a new light rail station next to the Portas do Cerco checkpoint on the mainland-Macao border. Macao will lease that plot of land from Zhuhai for an initial period ending on December 19, 2049 (eve of the 50th anniversary of its handover to China), subject to extension by the NPCSC.
During the session, the NPCSC heard its Legislative Affairs Commission’s annual report on “recording and review” (R&R) [备案审查]—a process whereby it reviews whether other state organs’ legislation conforms to the Constitution, national laws, and central policies. R&R thus functions as China’s (nascent) constitutional review process. I already covered the Commission’s decisions to (1) halt local government policies to collectively punish the family members of those suspected of committing telecom fraud; and (2) to rectify local legislation that encroached on homeowner rights. I will return to the report at the end of this post.
Relatedly, the NPCSC passed the Decision on Improving and Strengthening the System of Recording and Review [关于完善和加强备案审查制度的决定], which I have translated in full here. I hope to publish a full analysis that the Decision deserves within a month or so, so will only make the following brief observations here. This document (which has the force, though not the form, of a law) codifies in a single instrument key pillars of the R&R process—some have been in place for over two decades, while others were only developed in last few years. At the same time, the Decision introduces new procedures, mechanisms, and reform goals that will take the following years to flesh out and implement. (See, e.g., the three provisions I highlighted before the Decision’s passage, which now appear in articles 6, 11, and 14.) I thus view the Decision as a milestone that brings the previous chapter of R&R reforms to a close while opening the next one.
Finally, the NPCSC passed the Criminal Law Amendment (XII) [刑法修正案（十二）] and an amendment to the Charity Law [慈善法]. Their key provisions are introduced below, based on my summaries of prior drafts of the two bills.
Criminal Law Amendment (XII)
This Amendment is one of the shorter Criminal Law amendments, modifying only seven articles of the statute. It focuses on bribery (specifically, giving bribes) and corruption in private enterprises.
Bribery: The Amendment, first, brings the punishments for giving bribes in rough parity with those for accepting bribes (art. 390, para. 1 as amended). The statute previously authorized longer sentences for the least serious cases of bribe-giving than for equivalent instances of bribe-taking. Both offenses now come with three identical brackets of custodial sentences. To crack down on bribe-giving (which is under-prosecuted in practice), the Amendment also specifies seven circumstances that warrant heavier penalties within the sentencing ranges—for instance, bribing multiple people, bribery committed by public servants, bribing law enforcement and judicial personnel, and bribing officials working in several listed areas (workplace safety, food and drug regulation, social security, education, etc.) to carry out illicit activities (art. 390, para. 2). Finally, the Amendment adds 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 prohibits certain conduct by the management or all employees of state-owned enterprises (SOEs) that falls under the heading of breach of trust. As relevant here, it bars an SOE’s directors and manager—and, under the Amendment, supervisors and all senior executives as well—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 Amendment extends these three prohibitions to analogous conduct of those working at equivalent positions in private enterprises.
The Amendment will take effect on July 1, 2024 [Correction: March 1, 2024]. An English translation is available here, and a comparison chart (in Chinese) here.
Charity Law Amendment
This amendment updates the 2016 Charity Law for the first time to address a number of identified problems with the development and regulation of philanthropy in China.
Regulation of charitable organizations: To promote growth of the nonprofit sector, the amendment allows all existing nonprofit organizations to register as charitable organizations (art. 10 as amended). Previously, newly established nonprofits must either register as charitable organizations since their inception or forever lose that opportunity. The amendment also directs the State Council’s finance, tax, and civil affairs departments to formulate preferential tax policies for charity (art. 85). At the same time, the amendment subjects charitable organizations to additional regulatory requirements, including disclosing the costs of fundraising and any “cooperation with non-mainland organizations or individuals” in their annual filings with the government (art. 13).
Regulation of charitable trusts: The amendment adds new conflict-of-interest rules for charitable trusts, barring the grantor (the one creating a trust) and the trustee from designating interested parties as beneficiaries of the trust (art. 46). It also grants civil affairs departments authority to investigate the trustees of charitable trusts (art. 104) and to establish and publicize a system of credit records for the trustees (art. 106); and authorizes the State Council’s civil affairs, finance, taxation, and financial regulatory departments to prescribe standards for the annual expenditures and management fees of charitable trusts, backed by penalties (arts. 61, 118).
Regulation of public fundraising, generally: As a supportive measure, the amendment shortens the period that newly registered charitable organizations must wait before they may apply for public fundraising credentials—from two years to one (art. 22). It also authorizes the Ministry of Civil Affairs (MCA) to designate online public fundraising platforms that charitable organizations must use for public fundraising (they may simultaneously do so on their own websites) (art. 27). To strengthen regulation, the amendment, among other things, requires charitable organizations with public fundraising credentials to scrutinize, disclose information on, and oversee their fundraising collaborators that lack such credentials (art. 26); and requires charitable organizations to disclose “detailed” (in addition to “comprehensive”) information on a public fundraising after it has concluded (art. 79).
Emergency public fundraising: Drawing lessons from charity-funded emergency assistance during Covid-19, the amendment adds an entire chapter on “emergency charity.” In particular, those conducting public fundraising in response to major emergencies must “promptly” distribute or use donated funds and equipment, and disclose at least once every five days the acceptance of donated resources (art. 72). In addition, the filing of the plan for such a public fundraising may be postponed to as late as 10 days after the event starts (art. 73).
Crowdfunding: Under prior law, crowdfunding (i.e., an individual’s request for aid from the general public) wasn’t considered “charitable fundraising” and thus unregulated. The amendment attempts to somewhat fill the gaps, providing that, where individuals seek aid from the public “due to family economic hardship brought on by illness or other causes,” those who request aid and who publish the requests are responsible for the veracity of the information in such requests (art. 124). The MCA is authorized to designate online crowdfunding platforms, which are responsible for “promptly and fully” disclosing the relevant information to the public and for verifying the truthfulness of the information. And the amendment authorizes the relevant State Council departments, including the MCA, the Cyberspace Administration of China, and the Ministry of Industry and Information Technology, to issue more detailed rules regulating crowdfunding activities.
The amendment will take effect on September 5, 2024, the annual China Charity Day. An English translation of the Charity Law as amended is available here, and a comparison chart (in Chinese) here.
On December 29, the NPCSC released the following bills for public comment through January 27, 2024:
draft revision to the State Council Organic Law [国务院组织法];
draft Emergency Response and Management Law [突发事件应对管理法];
draft Rural Collective Economic Organizations Law [农村集体经济组织法];
draft amendment to the Law on the Oversight by the Standing Committees of People’s Congresses at All Levels [各级人民代表大会常务委员会监督法];
draft revision to the Border Health and Quarantine Law [国境卫生检疫法];
draft revision to the Mineral Resources Law [矿产资源法]; and
draft Tariff Law [关税法].
Non-News of the Month
Last month, we published a guest post by Dr. Moritz Rudolf on “foreign-related rule of law” (FRROL) [涉外法治]. The post discusses the meaning of FRROL, traces the Chinese leadership’s evolving framing of the concept, introduces the recommendations that a leading Chinese scholar likely offered Politburo members in November 2023 for advancing FRROL, and ends with Rudolf’s assessment of the concept’s outlook.
More on the 2023 R&R Report
Instead of a detailed summary, I will just note three other things in the 2023 report by the NPCSC Legislative Affairs Commission (LAC) that I found interesting.
Sharp drop in citizen requests for review. Last year saw another decrease in the total number of citizen requests submitted and even a steeper decline in the percentage of requests submitted through the online portal for requesting NPCSC review (launched in December 2019). Here’s the relevant data for the past four years:
2020: 5,146 in total (62.7% submitted online);
2021: 6,339 (79.9%);
2022: 4,829 (~70%);
2023: 2,827 (19.3%).
I don’t have a good explanation for either change. The online portal appears to be functioning properly, so the approximately 50 points drop in the share of citizen requests submitted online was quite surprising. The good news is that the NPCSC shows it still values public use of the process. According to the director of the LAC’s R&R Office, the LAC had tentatively decided to upgrade the National Database of Laws and Regulations (another site maintained by the NPCSC) so that citizens may request review of legislation they find problematic as they browse the Database—something I recommended almost three years ago!
“No” to complete local bans on fireworks. According to the report, some citizens and companies requested review of local legislation that imposed “complete” bans on the sales and lighting of fireworks and firecrackers. Henan, for instance, still has a province-wide ban on the books (though some cities relaxed the prohibition in early 2023). After review, the LAC concluded that such total bans on fireworks were inconsistent with the Law on the Prevention and Control of Atmospheric Pollution [大气污染防治法] and the State Council’s Regulations on Managing the Safety of Fireworks and Firecrackers [烟花爆竹安全管理条例], which authorized county-level governments to at most ban fireworks in designated areas and during designated periods of time. The LAC also acknowledged the “differences in understanding” over total fireworks bans, which are “difficult to implement in practice.” So, as a Year of the Dragon gift to Chinese citizens, the LAC has requested the relevant localities to amend their legislation and the latter are reportedly in the process of doing so.
Return of LAC review to promote interethnic “exchanges and integration.” In 2020 and 2021, the LAC requested repeal of the legislation passed by several ethnic autonomous areas that required ethnic schools to teach all classes except Mandarin in the relevant ethnic language, based on its aggressive reading of the constitutional policy to promote nationwide use of Mandarin. Last year, the LAC rejected additional legislation enacted by ethnic autonomous areas to purportedly further interethnic exchange and integration. One regulation (passed by the Qian Gorlos Mongol Autonomous County in 1996) required public employers to give preference to candidates who, all else being equal, took the recruitment exam in Mongolian (as opposed to Mandarin). The LAC concluded that this provision was inconsistent with local governments’ obligation under the Law on the Standard Spoken and Written Chinese Language [国家通用语言文字法] to “popularize Putonghua and the standardized Chinese characters,” so requested the County to amend its regulation.
That’s all for this month’s issue. Thanks for reading!
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I'm completely new to the Recording & Review process but it partially looks like the kind of adjudication the French Council of State, the Administrative Jurisdiction Supreme Court, is undertaking (reviewing the validity of administrative decisions, orders, rules, regulations). The process is different though