RANDALL PEERENBOOM, University of California, Los Angeles - School of Law
Email: Peerenbo@law.ucla.edu

At first glance, China and India seem to contradict the basic premise of the law and development movement that law plays a key causal role in economic growth. According to the standard view, China has enjoyed high growth rates despite weak legal institutions and the lack of rule of law, while India's growth rates have lagged far behind China's despite a reputation for rule of law and stronger legal institutions. Closer examination however reveals that the experiences of China and India are not as inconsistent with the prevailing wisdom regarding the relationship between law and development as often suggested.

China and India also offer contrasting paths to development, with India being the world's largest developing country democracy, and China being the world's largest authoritarian regime. Direct comparisons between China and India are thus inevitable, albeit problematic. Data is often unreliable, available for different years or collected in different ways. There is also considerable regional variation within both countries. Moreover, each country does better in some respects than others. By selecting particular measures, one can present either a positive or negative image of either. Accordingly, across the board generalizations about the superiority of one or the other are dubious. Generalizations are difficult even within a particular area such as rule of law or economic development.

Nevertheless, some general observations are possible: China does better in terms of economic measures, poverty reduction, and most measures of human development. India does better in terms of political freedoms and income equality. Both have poor environmental records, low public health spending and repress minorities with secessionist tendencies. Both do relatively well compared to the average country in their income class on good governance measures.

The revisionist view sees India's democracy as a great asset in overcoming the middle-income blues. Conversely, although China is also experiencing the middle-income blues, it is following the path of other East Asian countries that were able to make the transition from middle to upper income countries, from weak institutions and rule of law to strong institutions and rule of law, and from authoritarianism to democracy. They did so by postponing democratization until a higher level of wealth was obtained and institutions had time to develop.

At this point, the jury is still out as to whether China and India will join the ranks of upper income countries whose citizens enjoy rule of law, good governance and high standards of living and human development, and in China's case, democracy. Thus, it is too early to determine whether front-loading or postponing the costs of political reform will prove to have been the better approach.

FRANKLIN ALLEN, University of Pennsylvania - Finance Department, European Corporate Governance Institute (ECGI)
Email: allenf@wharton.upenn.edu
RAJESH CHAKRABARTI, Indian School of Business, Indian School of Business
Email: rajesh_chakrabarti@isb.edu
SANKAR DE, Indian School of Business
Email: sankar_de@isb.edu
JUN QIAN, Boston College - Finance Department, University of Pennsylvania - Wharton Financial Institutions Center
Email: qianju@mail.bc.edu
MEIJUN QIAN, National University of Singapore
Email: bizqmj@nus.edu.sg

In this paper we examine and compare the formal systems of law and finance in China and India and the alternative institutional arrangements and governing mechanisms in the two countries, and the relation between the development of these systems and their economic growth. China differs from most of the countries studied in the law, institutions, finance, and growth literature: Its legal and financial systems as well as institutions are all underdeveloped, but its economy has been growing at a very fast rate. More importantly, the growth in the Private Sector, where applicable legal and financial mechanisms are arguably poorer than those in the State and Listed sectors, is much faster than that of the other sectors. The system of alternative mechanisms and institutions plays an important role in supporting the growth in the Private Sector, and they are good substitutes for standard corporate governance mechanisms and financing channels. Despite its English commonl aw origin and British-style judicial system and democratic government, there is enough documented evidence to suggest that the effective level of investor protection and the quality of legal institutions in India are quite weak as well. Once again, this has evidently not prohibited growth. We find that to a large extent Indian firms conduct business outside the formal legal system and do not rely on formal financing channels from markets and banks for most of their financing needs. Instead, firms across the board, and in particular, small and medium firms, use non-legal methods based on reputation, trust and relationships to settle disputes and enforce contracts, and rely on alternative financing channels such as trade credits to finance their growth. The scope, methodologies, and results of our paper paint a more complete picture of the law-finance-growth nexus and how businesses and investors respond to the limitations of legal system and formal financial system than existing studies.

DAVID GERBER, Illinois Institute of Technology - Chicago-Kent College of Law
Email: dgerber@kentlaw.edu

China has been considering enactment of an anti-monopoly (antitrust) law since 1993, and it has now enacted such a law. Given the potential importance of this legislation, there is much uncertainty about what the enactment means and what roles it is likely to play in influencing the development of the Chinese economy. This article applies a neo-institutionalist analysis in examining some of the factors that have influenced the shaping of the legislation and that are likely to influence the operation of competition law and its organizations. The main argument is that the central dynamic in both the creation of the statute and its structuring has been the interaction of Chinese economic policy institutions with foreign pressures (institutional mechanisms intended to "push" the Chinese decision makers in certain directions) and foreign cognitive influence (cognitive factors that accord influence to foreign organizations, experience, and laws). These interactions also provide insights into how the law is likely to be applied. The paper also explores these two concepts - foreign pressure and foreign cognitive influence - in relation to the theory of institutional change.

ZHONGXIANG ZHANG, East-West Center - Research Program
Email: ZhangZ@EastWestCenter.org

China has been the world's second largest carbon emitter for years. Recent studies show that China had overtaken the U.S. as the world's largest emitter in 2007. This has put China on the spotlight, just at a time when the world community starts negotiating a post-Kyoto climate regime under the Bali Roadmap. China seems to become such a Christmas tree on which everybody can hang his/her complaints. This paper will first discuss whether such a critics is fair by examining China's own efforts towards energy saving, the widespread use of renewable energy and participation in clean development mechanism. Next, the paper puts carbon reductions of China's unilateral actions into perspective by examining whether the estimated greenhouse gas emission reduction from meeting the country's national energy saving goal is achieved from China's unilateral actions or mainly with support from the clean development mechanism projects. Then the paper discusses how far developing country commitments can go in an immediate post-2012 climate regime, thus pointing out the direction and focus of future international climate negotiations. Finally, emphasizing that China needs to act as a large and responsible developing country and take due responsibilities and to set a good example to the majority of developing countries, the paper articulates what can be expected from China to illustrate that China can be a good partner in combating global climate change.

IN HYEON KIM, Mokpo National Maritime University
Email: ihkim@mmu.ac.kr

This article introduces the 2007 amendments to Korean maritime law as expressed in the Korean Commercial Code, The changes result from a collaborative effort of the Korean Maritime Law Association and the Ministry of Justice. New provisions provide for a seaway bill, stipulate electronic transport documentation, confront multimodal transportation, and increase the ceiling of a carrier's liability for damage or loss of cargo. There is also new law pertaining to bareboat and time charters. The author also notes recent decisions of the Supreme Court about when a bill-of-lading issuing freight forwarder becomes a carrier liable for delayed delivery, damage or loss; whether an opening bank for a letter of credit recovers as the holder of a bill of lading or as the holder of a security interest in the cargo for which the bill was issued; and what foreign law should govern subrogation of a maritime lien.

YUWA WEI, Griffith University, Griffith University - Griffith Law School
Email: y.wei@griffith.edu.au

The increasing economic globalization over the past two decades has raised considerable concern over the competitive capacity of public enterprises, which has, in turn, imposed pressure on the public sectors of all systems.