Decentralized and Anomalous Interpretation of Chinese Private Law: Understanding a Bureaucratic and Political Judicial System

29 Pages Posted: 8 Sep 2017 Last revised: 10 Nov 2017

See all articles by Yun-chien Chang

Yun-chien Chang

Academia Sinica - Institutum Iurisprudentiae (IIAS); New York University School of Law

Xu Ke

Renmin University of China

Date Written: July 31, 2017


China developed without clear entitlements, creating the China Puzzle for law and development theorists. But fundamental statutes regarding contract, torts, and property have been enacted by now. Will clear delineation of private rights drive China’s future development? The answer largely depends on how the nationally promulgated statutes are interpreted by local Chinese courts. If Chinese judges interpret statutes in a predictable and market-friendly way, they add fuel to economic development. But have they? Will they? This article proposes a positive theory to describe the bureaucratic and political nature of Chinese courts. Chinese courts occasionally—sometimes systemically—render doctrinally unconvincing decisions because judges are bureaucrats, whereas court presidents are politicians. Facing local socio-political pressure, courts are ready to make idiosyncratic statutory interpretations, because resolving disputes in and out of courts, legally or ultra-legally, is more important than interpreting statutes correctly. China’s Supreme People’s Court is unable to correct locally sensible yet nationally problematic decisions because most private-law cases cannot be appealed to the highest court due to jurisdictional rules. Even when the Supreme People’s Court has opportunities to redress conflicting interpretations, it is often too cautious to take a position. This article not only reviews existing research regarding our theory but also conducts one of the very first large-scale empirical studies of lower court decisions in China. The finding is that Chinese courts not infrequently deviate from standard statutory interpretations, often inexplicably. Entitlements can be re-shaped by courts due to political influences.

Keywords: adjudication committees, life-time wrongful case responsibility system, xinfang, guiding opinions, Judicial Interpretation, the Supreme People’s Court of China, dian right, mortgage

JEL Classification: K11, K12, K13

Suggested Citation

Chang, Yun-chien and Ke, Xu, Decentralized and Anomalous Interpretation of Chinese Private Law: Understanding a Bureaucratic and Political Judicial System (July 31, 2017). 102 Minnesota Law Review, (2018) Forthcoming. Available at SSRN:

Yun-chien Chang (Contact Author)

Academia Sinica - Institutum Iurisprudentiae (IIAS) ( email )

128 Academia Sinica Rd., Sec. 2
Taipei City, 11529

New York University School of Law ( email )

40 Washington Square South
New York, NY 10012-1099
United States

Xu Ke

Renmin University of China ( email )

Room B906
Xianjin Building
Beijing, Beijing 100872

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