The Olympics, Overseas Chinese, & Foreign Laws†

By: The Editorial Board of SINOTALKS^® / On: August 14, 2024

Table of Contents

The Important Role of Overseas Chinese
Protection of Rights and Interests of Overseas Chinese & Related Challenges
The Recent Initiative of the Supreme People’s Court

Estimated Reading Time

6.8 min

The Olympics, Overseas Chinese, & Foreign Laws — Image: Gerd Altmann, *Hurry Up* (Publicdomainpictures.net)

The China team’s impressive performance during the 2024 Summer Olympics has heightened many overseas Chinese’s interest in their own Chinese roots. This development and the International Monetary Fund’s recent upgrading of China’s economic growth forecast in 2024 to 5%—while the international agency continues to predict a mere 3.2% growth in the global economy—are likely to boost overseas Chinese’s fascination with opportunities emerging from the world’s second largest economy.

Such fascination should motivate Beijing to step up its efforts to effectively engage overseas Chinese, who have been perceived by Beijing as important bridges connecting China with the rest of the world. Coincidentally, a recent initiative taken by China’s top court may turn out to be exactly what Beijing needs now to attract overseas Chinese, even though the initiative was not introduced to specifically target them.

The Important Role of Overseas Chinese

“[…] overseas Chinese are perceived as ‘irreplaceable important resources for [China]’. ”

According to China’s official data, there are more than 60 million overseas Chinese residing in nearly 200 countries and regions around the world. Approximately 10% of overseas Chinese are Chinese citizens while the remaining 90% are foreign citizens (who, according to China, generally refer to formerly Chinese citizens and their descendants with foreign citizenship). Regardless of their citizenship, these people are identified as “an important force [for China] to rely on to safeguard national sovereignty, security, and development interests, and to promote friendship between China and foreign countries”. In short, overseas Chinese are perceived as “irreplaceable important resources for [China]”.

The important role of overseas Chinese is reflected in their contribution to China’s efforts to attract talented people and foreign investment. As more than four million overseas Chinese are professionals working in different fields, China has introduced various measures—for example, generous recruitment packages for these professionals and their families to cover their housing, education, medical, and travel needs—to attract these professionals to work inside the country or offer their knowledge and skills from afar. In addition, overseas Chinese have leveraged their connections and/or their own success around the world to bring investment to China. Official data show that since China began its reform in the late 1970s to welcome foreign investment, the country has seen more than 60% of foreign direct investment in the country being funded by overseas Chinese and 70% of foreign-funded enterprises established in the country being owned by overseas Chinese.

Protection of Rights and Interests of Overseas Chinese & Related Challenges

“[…] the Chinese leadership emphasizes the need to ‘safeguard the rights and interests of overseas Chinese in accordance with law’.”

Because of the important role played by overseas Chinese, in the Decision of the Central Committee of the Communist Party of China on Several Major Issues Concerning the Comprehensive Promotion of Governing the Country in Accordance with Law (adopted in October 2014), the Chinese leadership emphasizes the need to “safeguard the rights and interests of overseas Chinese in accordance with law”.

To this end, Chinese authorities have introduced a wide range of measures, which have not been without their own challenges. These challenges include, but are not limited to, the following:

“Some local [governments] and departments do not fully understand the special and important role of overseas Chinese […. Consequently,] some policies and measures involving the vital interests of overseas Chinese have not been fully implemented […].”

“Some local governments still have such problems as failing to fulfill their commitments to attract investment and arbitrarily changing plans [that affect investment]. This […] has caused concerns over the infringement of rights and interests of overseas Chinese-invested enterprises, which has become a prominent issue.”

The Recent Initiative of the Supreme People’s Court

These challenges facing Chinese authorities have prompted them to highlight the need to, inter alia, “resolve, in accordance with law, prominent issues encountered by overseas Chinese in their lives, work, and innovative entrepreneurship in China, such as infringement of rights and interests, [inadequate] protection of intellectual property, and economic disputes”.

A recent initiative undertaken by the Supreme People’s Court helps meet this need, even though the initiative does not specifically target overseas Chinese. In July, the highest court released its first batch of Typical Cases (five in total) concerning the ascertainment of foreign laws to illuminate how the Chinese judiciary ascertains and applies—with assistance from foreign law firms and other experts after they have completed rigorous procedures—foreign laws when adjudicating foreign-related civil and commercial cases. The Chinese courts overseeing these five cases were able to ascertain related laws of the United States, the United Kingdom, Mexico, Tajikistan, and China’s Hong Kong Special Administrative Region (“Hong Kong”)—this special administrative region has its own legal system according to China’s “one country, two systems” principle (see explanations in this article)—to resolve key legal issues arising from investment projects and contracts involved in these cases.

One of these five Typical Cases is illustrative. A British company signed a distribution agreement with a Hong Kong company, authorizing the Hong Kong company to sell the British company’s medical products in China. However, according to the agreement, if the medical products purchased by the Hong Kong company from the British company during a certain year covered by the agreement were worth less than USD 500,000 in total, the British company would be allowed to terminate the agreement. Later, the British company terminated the agreement, claiming that medical products purchased by the Hong Kong company in 2020 were worth less than USD 500,000 in total. The Hong Kong company disagreed and brought a lawsuit against the British company to recover the losses the Hong Kong company asserted it had sustained.

The case was presided over by the Intermediate People’s Court of Guangzhou City, Guangdong Province. As the contractual dispute at issue required the court’s accurate understanding of the laws of England and Wales, both parties entrusted experts to prepare reports to assist the court in ascertaining these laws. In the end, the court compared the two reports and followed the analysis stated in the report submitted by the British company—which was prepared by a British barrister—to rule against the Hong Kong company. According to the Supreme People’s Court, this Typical Case is significant for the following reasons:

First, legal opinions, no matter whether they are issued by a center specializing in the ascertainment of foreign laws or a foreign lawyer, have the nature of expert testimonies on foreign laws and should be submitted to the parties for cross-examination.

Second, when there are a large number of foreign case laws and both parties disagree on the content, understanding, and application of foreign laws and cannot reach a consensus, a people’s court should, based on the specific circumstances of the case and materials provided by the parties, including the legal content, related auxiliary academic materials, as well as opinions and explanations of relevant legal experts, make a final determination on the content of foreign laws after comprehensive analysis, comparison, and selection. [The people’s court] cannot simply determine that foreign laws cannot be ascertained on the grounds that the parties have disagreements.

[emphasis added]

As Typical Cases released by the Supreme People’s Court are designated to have referential value (see, e.g., explanations in this article), courts across China are expected to apply the principles established in these Typical Cases to adjudicate similar cases. Because such similar cases can happen to involve overseas Chinese, who are often parties to contracts embedded with legal issues requiring the Chinese judiciary’s ascertainment of foreign laws, the release of these Typical Cases can help safeguard the protection of rights and interests of overseas Chinese. More illuminating cases like these Typical Cases should be released in the form of Typical Cases—or, even better, as Guiding Cases, which have de facto binding effect in China—to enhance the judicial credibility of Chinese courts.

The citation of this article is: The Editorial Board of SINOTALKS^®, The Olympics, Overseas Chinese, & Foreign Laws, SINOTALKS.COM^®, SinoExpress™, Aug. 14, 2024, https://sinotalks.com/sinoexpress/202408-english-overseas-chinese-foreign-laws. ↩︎