I am traveling at the moment, so my time to review articles published on Wechat is limited. But below are some links of interest.
Oldies but goodies
Several prominent media sources, the South China Morning Post among them, are running articles on China’s clean-up of the financial sector, this one pointing to the government’s focus on privately owned insurance companies.
The Ministry of Public Security (MPS) has recently issued its draft Detention Center Law for public comments (link to Chinalawtranslate.com’s translation. The draft has caused a great deal of comment within China and those concerned about the treatment of fellow human beings in criminal detention in China should read these articles:
I am tweaking the type of content on the blog, cutting down on the long analytical blogposts. I will provide links to reports and analysis on court and other legal matters on Wechat. I am concentrating on writing a book and some other related writing and editing projects.
It remains my hope that some followers with the financial wherewithal to do so will consider supporting (in some fashion) the blogs that are enabling the English speaking and reading public to perceive (through translation or bite-sized analysis) the “elephant” that is the Chinese legal system, among them Chinalawtranslate.com and this blog.
Supreme People’s Court (SPC) President Zhou Qiang’s report to the National People’s Congress in March of this year omitted data on private lending disputes. In 2016, Zhou Qiang stated that the courts dealt with approximately 1.5 million cases, up 41% from the year before. According to a widely cited study issued in November, 2016, private lending disputes were the leading type of civil dispute in the Chinese courts in 2011-2015. Data on private lending disputes in 2016 seems to be missing from year end reports by many local courts, although the the SPC is promoting the use of big data. The report discussed below is an exception to the general trend this year. Beijing’s Chaoyang District Court, one the busiest basic level court in China, recently published a report on private lending cases.
Data from Beijing’s Chaoyang District, numbers of cases accepted, 2013-2016:
The court noted that the year on year growth rate for private lending cases was 8.1% (2013-2014), 128.9% (2014-2015), 160.3% (2015-2016), with 2016 cases over five times the number in 2013. In the first four months of 2017, the Chaoyang court accepted 8777 new cases. The court expects the number of private lending cases to increase substantially during 2017.
Cases involving large amounts in dispute are on the rise: in 2013, 21 cases involved more than 10 million RMB, 31 in 2014, 61 in 2015 and 95 in 2016, with one case in 2016 involving 96 million RMB. Total amounts in dispute in 2016 were over 821 million USD.
Comments by court researchers:
Almost 1/3 of the cases involved one company.
Many of the cases involve P2P platforms (no specific numbers supplied);
because insufficient information is supplied, courts have problems serving process;
many platforms circumvent the restrictions on the rate of interest by imposing intermediary fees;
the loan agreements are badly drafted, making it difficult for judges to decide these cases;
Few cases were settled and over 20% were default judgments.
Failing to release judicial statistics about private lending on a national level does not send positive signals about the state of judicial transparency, but does indicate the way that the SPC needs to serve government strategies. These statistics, at a local level, do send signals about the state of the economy. Their absence at a national level does not mean the underlying economic concerns have vanished. Further concerns are raised by the fact that the Shanghai Justice Bureau, as of early April, has ordered public notaries to stop notarizing private lending agreements (notarizing an agreement makes court enforcement easier
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