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On May 28, 2020, China’s top legislature – the 13th National People’s Congress passed the long-expected Civil Code. Comprised of seven parts plus supplementary provisions, 84 chapters and 1,260 articles, the Civil Code is the most extensive legislation in the history of the People’s Republic of China, and this is the only legislation officially named a “code”.

The Civil Code will take effect on 1 January 2021, and when it takes effect, it will abolish, among other laws, the General Provisions of the PRC Civil Law, the PRC Marriage Law, the PRC Guarantee Law, the PRC Contract Law, the PRC Property Law and the PRC Tort Liability Law. 

The Civil Code touches upon almost every dimension of civil society and is a significant legislation for every individual in China. The adoption of the Civil Code is widely acclaimed as a milestone in the development of China’s legal system, as the Civil Code not only codifies the fundamental rules of law on civil and commercial matters but also strengthens the protection of citizens’ personal rights such as rights of privacy and personal information. This legislation will certainly have influence on foreign-related dealings in China. The purpose of this article is to introduce the newly enacted Civil Code and its implication on foreign-related contracts. 

A brief history of the PRC Civil Code 

The quest for a comprehensive civil code in the PRC dates back to 1954 when the Standing Committee of the National People’s Congress (NPCSC) appointed a panel to lead the drafting of a civil code. The first two attempts in 1954 and 1962 failed because of the then struggling economy and political turmoil in China.

After the Chinese government launched the ‘reform and opening-up policy’ in December 1978, the NPCSC re-commenced the drafting of a civil code in an attempt to meet the needs of building a market-oriented economy in 1979. The sweeping changes in the country’s economic and social conditions made it impossible to create a complete civil code at the time. Therefore, the NPCSC ultimately decided to embrace a new approach – to enact a series of separate civil law statutes first and then integrate them into a unified code when conditions were ripe for change.

A large number of civil law statutes have been formulated or amended since then, among them the General Provisions of the Civil Law, Marriage Law, Inheritance Law, Guarantee Law, and Contract Law, etc.  

The Chinese legislature attempted for the fourth time to create a civil code in 2001. A draft civil code was submitted to the NPCSC for its review in 2002, but was shelved at the time because of its complexity and controversy. Nonetheless, the NPCSC continued with the approach to adopt separate civil law statutes. As such, the Property Law and Tort Liability Law were enacted and a number of other statutes were substantially revised, which laid the groundwork for a future civil code.

In October 2014, the Communist Party of China, as a necessary step in advancing the country’s rule of law, resolved to compile a unified civil code by 2020. In March 2017, the general provisions of the Civil Code was ratified, and beginning in August 2018, six draft parts were reviewed in different sessions of the NPCSC. The Civil Code in its finalized form was thus presented to and adopted by the NPC at its annual session on 28 May 2020, concluding the country’s six-decade journey to enacting a comprehensive and modern civil code.