Judiciary throws support behind economy

PUBLISHED : Saturday, 12 March, 2011, 12:00am
UPDATED : Saturday, 12 March, 2011, 12:00am

Top judicial officials vowed yesterday to safeguard the mainland's economy, with figures showing a sharp rise in contractual disputes, bankruptcies and forced liquidations last year.

In their annual reports to the National People's Congress, the officials also vowed to step up work to protect state security, maintain social stability and battle corruption, against a background of rising social conflict and concerns over the spread of anti-government protests from the Arab world.

Economic problems were given rare prominence in the report by the Supreme People's Court yesterday. Court president Wang Shengjun emphasised the need to strengthen the judiciary's capacity to rule on a 'new category' of cases such as bankruptcies, corporate restructuring, unpaid debts, protection of workers' rights in failed corporations, and disputes involving different financial instruments.

'Impacted by the global financial crisis and changes in the macro-economic environment, a lot of corporations have lapsed into difficulty ... legal problems are intertwined with social problems, and all kinds of conflicts have arisen,' Wang said.

'We must properly resolve the problems of employee settlement, and the protection of debtors, in order to safeguard our market order.'

Last year, the courts concluded about 580,000 financial disputes, 11.6 per cent more than in 2009, while the number of people charged with commercial crimes rose 19.5 per cent.

The courts also concluded nearly 14,700 cases 'to support economic activities that benefit the speeding up of a change in the country's mode of economic development', including mergers and acquisitions, corporate restructuring, bankruptcies, forced liquidations and share transfers - 56.9 per cent more than in 2009.

Wang also highlighted the clampdown on intellectual property rights infringements - an area that overshadows many of China's trade talks. The courts concluded more than 48,000 of such cases last year, a third more than in 2009.

Chinese People's Political Consultative Conference delegate Mei Xingbao, a former chairman of China Orient Asset Management, said the courts had responded very well to the financial crisis by launching guidelines to protect creditors' interests. But 'regional protectionism and corruption' were still the biggest problems plaguing the judicial system, Mei said.

Gao Jie, another CPPCC delegate and vice-chairman of the Beijing Returned Overseas Chinese Federation, said foreign investors faced another common problem. 'We have heard a lot of complaints from overseas Chinese investors over deals with local governments, who are keen to attract overseas investment and make empty promises to investors,' Gao said.

'But in these cases, what the judicial department can do is very limited in the face of the strong power of the governments.'

Professor Zhang Gu from Zhejiang University's Guanghua Law School said the rise in bankruptcy cases should prompt the government to speed up financial reform, since most companies that failed were small and medium-sized enterprises which could not compete with well-resourced state-owned companies.

Apart from the economy, stability and corruption remain the focus of prosecution work.

Supreme People's Procuratorate chief Cao Jianming said the number of people who faced criminal charges last year rose slightly. Cao vowed to step up the 'struggle against infiltration, subversion and sedition'.

More prosecutors have been sent to Tibet and Xinjiang to ensure stability.

The number of officials at the county level or above who were investigated for corruption increased 2 per cent to 2,723, while the number of people investigated for offering bribes rose 24.3 per cent to 3,969.

Despite a continued push to increase the number of judges, their growing caseload is underlined by the average of 57 cases handled by each judge last year, up from 55.5 in 2009 and 52 in 2008.

The death penalty system remains secretive. The number of executions last year - a figure much sought after by human rights watchers - was not mentioned in the court's report.

The prominent emphasis on a 'proactive judiciary' - with judges urged to take an active role in investigating and mediating cases - also reaffirmed worries by many legal professionals, who said it could mark a backward step in reforms towards a more independent judiciary.

2010 cases in figures

Financial disputes concluded: 578,919, up 11.63%

Cases related to corporate restructuring concluded: 14,694, up 56.9%

Intellectual property cases concluded: 48,051, up 32.96%

Number of people charged for commercial crimes: 50,775, up 19.5%

Number of people convicted in anti-corruption cases: 28,652, up 9.25%

Number of officials investigated for abuse of power in relation to construction projects and material procurements: 8,584

Number of officials investigated for abuse of power in relation to land administration: 1,246

Number of judicial officials subject to criminal investigation: 2,721