UPDATE (June 19, 2018): On Tuesday (June 19), it was revealed that the State Council had submitted a draft amendment to the Individual Income Tax Law (个人所得税法) to the ongoing NPCSC session. This amendment came as a surprise because it was only a preparatory project in the NPCSC’s 2018 legislative plan. State media on Tuesday also released the Ministry of Finance’s explanation of the draft amendment. We expect to publish a summary of the draft after it is released for public comments.
In addition, the NPCSC will not vote on the E-Commerce Law at the end of the current session. We thus expect it to return for a fourth and final round of deliberation by the end of 2018, likely in August or October.
The Council of Chairmen decided on Monday (June 11) that the next NPC Standing Committee (NPCSC) session will take place from June 19 to 22. The session will consider three draft laws and two potentially significant draft decisions. A rundown of the agenda follows.
The draft E-Commerce Law (电子商务法) returns for a third—and likely final—round of deliberation. The draft was last reviewed in October 2017, when the NPCSC seemed poised to pass the law in December because it set a shorter-than-usual comments period for the second draft—a strong sign of the imminent passage of a bill. But then several Chinese bike-sharing companies (including then-third largest, Bluegogo) went bankrupt towards the end of 2017, disappearing with their customers’ deposits. The draft presumably needed further revision to address this and other problems exposed by the burst of the bike-sharing bubble. For a host of reasons, it’s highly likely that the NPCSC will adopt the law at this month’s session—though we wouldn’t discount the possibility of a fourth and final review in August.
Revisions to both the People’s Courts Organic Law (人民法院组织法) and the People’s Procuratorates Organic Law (人民检察院组织法) are back for a second round of deliberation. And at least another round awaits both. English translations of the first drafts of the revisions are available on the two laws’ wiki pages.
A draft revision to the Patent Law (专利法) was originally planned for this session but has apparently been dropped. The latest U.S.-China trade consultations might have made further changes to the draft necessary as the joint statement specifically states that “China will advance relevant amendments to . . . the Patent Law.”
We expect the NPCSC to release all draft bills not approved by the upcoming session for public comments after the session ends.
The two draft decisions submitted to the NPCSC’s upcoming session are both sequels of the far-reaching State institution reorganization plan adopted earlier this year.
The first decision concerns the duties of the new NPC Constitution and Law Committee (宪法和法律委员会), which replaced the old Law Committee (法律委员会) at this year’s NPC session. (All but one of the new Committee’s members have legal background.) According to the reorganization plan:
The NPC Constitution and Law Committee, on the basis of continuing to undertake the uniform deliberation of legislative bills [a process whereby the Committee deliberates all pending legislative bills and suggests revisions thereto based on legislators’ opinions], shall assume such additional duties as promoting the implementation of the Constitution, carrying out constitutional interpretation, advancing constitutional review, strengthening constitutional oversight, and cooperating with publicizing the Constitution.
The Law Committee is mentioned by name in five laws: the NPC Organic Law, the NPC Rules of Procedure, the NPCSC Rules of Procedure, the Legislation Law, and the Oversight Law. We expect the decision to in part affirm that the new Committee will take on the old Committee’s duties as prescribed in those laws: uniform deliberation and a minor role in the recording-and-review (备案审查) process.
What could be more significant is if the decision concretizes the Committee’s new duties as outlined in the reorganization plan—if, for example, the decision transfers to the 19-strong Committee the recording-and-review function (encompassing constitutional review) of the NPCSC Legislative Affairs Commission, which carries out such a crucial function through only an approximately 10-member office.
In addition, the Central Military Commission submitted a draft decision that would grant the China Coast Guard (中国海警局), now part of the People’s Armed Police (PAP) under the reorganization plan, authority to protect China’s maritime rights and carry out maritime law enforcement. The PAP itself was put under sole military control on January 1, 2018 in accordance with a November 2017 NPCSC authorization; it previously also reported to the State Council. That same NPCSC authorization suspended relevant provisions of the People’s Armed Police Law to expand the PAP’s duties to include “maritime rights protection” and others. We expect the new draft decision to specifically allocate such a duty to the Coast Guard. An expert wrote that a militarized China Coast Guard “will have major symbolic implications for China’s presence in disputed waters.”
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The consistently reliable harbinger of additional, as-yet unannounced bills—“等” or “et cetera”—appears once again in the official report of the Council of Chairmen’s meeting. We anticipate, as we’ve said in this month’s NPC Calendar, that the State Council would submit one or more amendments to existing laws to implement the reorganization plan—as it did in April.