Different legal traditions keep Hong Kong and China apart

Discordance over “one-country two-systems” has been growing, with Beijing insisting on implementing “one-country” and Hong Kong persisting in defending “two-systems”. A central issue creating this divide is that China operates on a civil law system and Hong Kong the common law system.

Legal systems reflect different styles of control over economic and social activities. The common law strategy seeks to support private and market-originated initiatives, whereas civil law seeks state-desired outcomes.

Tensions and misunderstandings between these two systems have given rise to some of the incongruences we observe in political culture, social and lifestyles. Recognizing these deep differences could be a first step toward political dialogue that could lead to accommodation.

Civil law, which originated with the French, is “policy implementing” and embraces socially-conditioned private contracting, while common law, which originated in England, is “dispute resolving” and supports unconditioned private contracting.

The contrast between the two is most prominent in terms of their influence on financial market development. The fact that after two centuries of modernization, London is an international financial center but Paris is not, speaks volumes about the difference between British common law and French civil law, and the persistence of legal origins.

Those effects can also be seen when comparing Hong Kong and Singapore, which have common law traditions, with Taiwan and South Korea, which have civil law traditions. Taiwan and South Korea have functioning democratic political systems, but not Hong Kong and Singapore. Yet the most robust international financial centers are found in Hong Kong and Singapore.

The differences between common and civil law are rooted in their distinct conceptions of freedom. French civil law emerged after the 1789 revolution in which the judiciary had sided with the monarchists – the losing side – and the revolutionaries were keen to dampen judges’ independence and law-making powers. Hence, it was necessary that the legislature draft a code without gaps. Conflicting provisions were to be avoided. The code had to be absolutely clear.

Common law emerged in England following revolution in the 17th century in which the lawyers were on the same side as the triumphant property owners. It followed that English judges gained considerable independence from the Crown and acquired the power to review administrative acts and interpret contracts without reference to public interest.

The legal institutions that evolved out of these two different conceptions and the historical contexts of their development in the birth of modern Europe led to critical differences:

First, the built-in judicial independence of common law, particularly in cases of administrative acts affecting individuals, has meant it is more respectful of private property and contracts than civil law.

Second, common law’s emphasis on the judicial resolution of private disputes, as opposed to legislation, as a solution to social problems, suggests greater emphasis on private contracts and orderings and less emphasis on government regulation.

Third, the greater respect for jurisprudence as a source of law suggests that common law is more adaptable to changing circumstances.

Government officials and scholars on the Mainland have expressed considerable perplexity, surprise and exasperation that Hong Kong people have failed to embrace “one-country” when it is the Chinese National People’s Congress that promulgated the Basic Law, enshrined the “two-systems,” and promised democratic elections after Britain had denied these during 150 years of rule. They have despaired at the thought that judges in Hong Kong have even failed to comprehend the Basic Law.

But underlying this perception is the failure to grasp that economic and social life here is organized according to a common law tradition different from the Mainland’s civil law tradition. Such habits of thinking are rooted in the civil law tradition. In common law systems, societies and economies, and sometimes even political life, are more organized from bottom up. In civil law systems they are more organized from top down.

Macau’s conversion has been easier because of the influence of its civil law tradition introduced by the Portuguese colonists. It also means that the people of Hong Kong have failed miserably in understanding and appreciating Chinese habits of thought and its civil law tradition. Sadly so has Beijing in misunderstanding Hong Kong.

The difficult political gridlock that now exists in Hong Kong between the executive and the legislative branches of government is unlikely to be quickly resolved, especially after the failed political reforms of the past summer. Without political consensus, the economic and social contradictions that have accumulated in the past three decades cannot be addressed.

Hong Kong’s judiciary provides an important alternative means of addressing some of these contradictions. Law alone cannot deal with all problems, but judicial independence provides some small amount of flexibility in handling them. Things in Hong Kong would have been even worse, and more grievances left unaddressed, if we had to rely on a civil law approach. Still, law is not a substitute for political reform.

Richard Wong Yue-chim is Philip Wong Kennedy Wong Professor in Political Economy at the University of Hong Kong