Can China Promote Electronic Commerce Through Law Reform? Some Preliminary Case Study Evidence

Abstract

This article analyzes legislation recently enacted in China to promote the use of electronic commerce among Chinese businesses. It reviews the terms of regulations to promote the use of accounting software by Chinese firms, the electronic commerce enabling provisions of the 1999 Contract Law and the 2004 Electronic Signature Law in light of their relationship to China's economic development goals and their impact on Chinese businesses. It contrasts the success of the accounting software regulations with the limited impact of the Contract Law provisions and the dim prospects for the Electronic Signature Law. While law reform generally may be of limited use as a policy instrument to promote the use of electronic commerce technologies by Chinese businesses as long as the transition to a market economy remains incomplete, these case studies suggest that law reform based on an accurate understanding of the conditions Chinese businesses face has a better chance of success than legislation based on foreign models which in turn were based on conditions in developed market economies which differ significantly from those in China's transition economy.

Keywords: electronic commerce, Internet, authentication, digital signature, electronic signature, identity management, standard development, Electronic Signature Law, Electronic Signature Directive, UNCITRAL, People's Republic of China