Politburo Whisperer on Advancing “Foreign-Related Rule of Law”

By Moritz Rudolf

In official Chinese discourse, “foreign-related rule of law” (FRROL) [涉外法治] plays a crucial role in achieving the Communist Party’s Second Centenary Goal of “building China into a great modern socialist country in all respects and to advance the rejuvenation of the Chinese nation on all fronts through a Chinese path to modernization” by 2049. Yet FRROL is for the most part ignored outside of the PRC. This is a mistake. Understanding this concept is essential to grasping the fine-tuning of China’s global outreach.

In light of the Politburo’s November 27, 2023 group study session on FRROL, this post traces the evolving official framing of the concept. It also introduces and critically analyzes the recommendations for advancing FRROL that Prof. Huang Huikang [黄惠康], the most prominent authority on the subject within the PRC, likely shared with Chinese leaders at the study session. This post ends by assessing the outlook of the concept.

What Is “Foreign-Related Rule of Law”?

FRROL may be viewed as a bridge between China’s “domestic rule of law” [国内法治] and the “international rule of law” [国际法治]. (It is important to note that, given the PRC’s Sino-Marxist approach to the law, “法治” primarily carries the notion of “rules-based governance” rather than “rule of law” as understood in Western legal systems.) Prof. Huang defines FRROL as “the aggregate of the philosophies, principles, systems, mechanisms, and rules that regulate foreign-related legal relationships,” with components concerning foreign-related legislation, law enforcement, judicial administration, and legal services, as well as China-foreign judicial cooperation (p. 45).¹ He sees FRROL as an “indispensable” part of China’s “domestic [or national] rule of law,” which stands alongside the “international rule of law” (p. 46). FRROL catalyzes the development of both by strengthening China’s domestic governance and connecting the Chinese legal system to the international one.

In official Chinese discourse, FRROL is viewed as a core component of “law-based governance” [依法治国]. Under the Xi Jinping Thought on the Rule of Law, which expounds on the why and the how of law-based governance, the law primarily serves as a tool to achieve the Party’s development goals. Xi’s Thought on the Rule of Law has been boiled down to eleven key tasks—the so-called “11 Upholds” [十一个坚持]—which, while prioritizing the domestic legal environment, also include promoting FRROL.

At the 20^th Party Congress, Xi announced that, after having completed the First Centenary Goal in 2021 (“building a moderately prosperous society in all respects”), the Party’s priorities now lie in achieving the Second Centenary Goal. And it is the Party’s assessment that its “strategy of national rejuvenation” takes place amid—and therefore must take account of—“global changes of a magnitude not seen in a century.” The FRROL project is critical to this endeavor.

How Has the Chinese Leadership’s Framing of FRROL Evolved

Given the Party’s instrumentalist approach to the law and the shifts in the domestic and international environments, FRROL’s function is highly adaptable. Depending on the domestic and external circumstances, the Party may shift FRROL’s emphasis and function, employing it as a sword, a shield, or an accelerator of development. The key determining factors appear to be the state of U.S.-China relations and the PRC’s domestic economic situation.

Xi Jinping focused on the sword and shield functions of the “rule of law” when speaking at the first meeting of the Central Commission for Comprehensive Law-Based Governance (Commission) in August 2018, months before the term “FRROL” was coined. He remarked that, “in external struggles [对外斗争], we must take up legal arms, take over the commanding heights of the rule of law, and dare to say no to saboteurs and disruptors.”

The first official use of “FRROL” dates to February 2019, when Xi chaired the Commission’s second meeting. “The rule of law is indispensable for reform, development, and stability,” said Xi this time, underlining the law’s role in promoting development.

On November 16, 2020, when Xi first outlined the key components of his Thought on the Rule of Law at the Central Conference on Work Related to Comprehensive Law-Based Governance, he again emphasized the role of the rule of law as an accelerator of development, characterizing it as an important part of the PRC’s “core competitiveness.” He also called for advancing FRROL efforts to “better safeguard national sovereignty, security, and development interests”—stressing FRROL’s sword and shield function as well. In particular, Xi underscored the need to—

• expedite the establishment of a comprehensive system of foreign-related laws and regulations;
• enhance the efficiency of foreign-related law enforcement and judicial processes;
• encourage Chinese enterprises and citizens to abide by local laws, regulations, and customs when they go global, and to use the law to protect their rights; and
• nurture “world-class” arbitral institutions and law firms.

A year later, Xi Jinping used a more assertive framing of FRROL at the 35^th group study session of the 19^th Politburo in December 2021. He emphasized the project’s sword and shield functions, stressing the need to wield “legal tools in international struggles,” with little reference to its role as an accelerator of development. This may be explained by the deteriorating U.S.-China relations at the time. As priority tasks, he identified—

• strengthening foreign-related legislation;
• improving legislation to counter sanctions, interference, and “long-arm jurisdiction”;
• developing a legal system on the extraterritorial application of Chinese law;
• expanding bi- and multilateral judicial and law enforcement cooperation;
• extending the “security chain” for safeguarding China’s overseas interests; and
• cultivating FRROL talents.

Xi’s speech at the Politburo’s most recent study session on November 27 provided the most comprehensive account of the Chinese leadership’s priorities with respect to FRROL. Notably, Xi framed FRROL, to a large extent, as a tool to improve the domestic business environment and opening-up. He underlined that the expansion of “high-level opening up” should “go along with” FRROL’s development. This renewed emphasis on utilizing FRROL as a development accelerator corresponds with a more moderate tone from Beijing about its role in the world, slightly improving U.S.-China relations, and Beijing’s attempts to stimulate economic growth. Nevertheless, FRROL’s functions as a sword and a shield for China’s development interests remain crucial. Once the international environment, China’s domestic circumstances, and Beijing’s interests change, FRROL’s primary function is likely to change once again.

How to Advance FRROL?

On November 27, 2023, Prof. Huang Huikang provided the key input to the group study session. A distinguished international lawyer, Prof. Huang has been a member of the U.N. International Law Commission since 2011. He also served as a diplomat and now heads the Ministry of Foreign Affairs’ Advisory Committee on International Law. Huang has published and spoken extensively on FRROL. Notably, in February 2022, he gave a lecture to the NPC Standing Committee (NPCSC) on “understanding and advancing the development of FRROL from a strategic height” [从战略高度认知和推进涉外法治建设]. His work on the subject is therefore crucial to understanding where China is heading on FRROL.

Since Prof. Huang’s input on November 27 has not been disclosed, his lecture to the NPCSC— which was published in an academic journal with the “necessary additions and deletions”² in late 2022— remains the best indicator of the suggestions he put forward at the Politburo study session. In the 2022 article, Huang outlined the following five priority areas and provided a comprehensive set of recommendations for the future development of FRROL.

1. Enacting More Foreign-Related Legislation

Echoing official reform initiatives, Huang stressed the need to first and foremost “speed up the enactment and refinement of urgently needed foreign-related legislation and to form a systematic and complete system of foreign-related laws and regulations as soon as possible” (p. 48). He then laid out the following detailed legislative proposals (id.)³:

• In the field of foreign affairs, I recommend formulating, as early as possible, fundamental or specialized laws such as foreign relations law, law on the application of treaties, foreign state immunity law, basic law of the sea, anti-interference law, anti–foreign corruption law, foreign agents law; as well as establishing a legal system on foreign aid with Chinese characteristics, and improving laws and regulations on the services for and management of foreigners;
• In field of civil and commercial law, I recommend formulating a code of private international law to build a complete system of jurisdiction, application of law, and judicial assistance in foreign-related civil and commercial cases;
• In the field of criminal law, I recommend amending the Criminal Law to add a separate part or chapter/section on foreign-related matters and improve the provisions on the Criminal Law’s extraterritorial application; prescribing the procedures for foreign-related criminal proceedings in a separate chapter in the Criminal Procedure Law; and improving the International Criminal Justice Assistance Law;
• In the field of administrative law, I recommend amending the laws and regulations in such areas as administrative licensing, administrative penalties, taxation, environmental protection, cybersecurity, and customs to add corresponding provisions for their extraterritorial application; improving the procedures for foreign-related administrative litigation; and formulating an international mutual administrative assistance law; and
• In the field of economic law, I recommend amending the territoriality provisions in such laws as the Company Law, Enterprise Bankruptcy Law, [Commercial] Banks Law, Insurance Law, [Securities Investment] Funds Law, Anti-Monopoly Law, and Anti–Unfair Competition Law and adding in them foreign-related chapters to provide a clear legal basis for the extraterritorial application of domestic laws.

Recent Chinese legislation tracks Huang’s proposals. For instance, the NPC has since enacted several laws on his list, including the Foreign Relations Law (June 2023), Foreign State Immunity Law (September 2023), and amendments to Civil Procedure Law provisions on transnational civil litigation (same). Of note, the Foreign Relations Law codified initiatives to advance FRROL, to strengthen legislation in foreign-related fields, and to strengthen the development of FRROL systems. Several other projects proposed by Huang also appear on the NPC’s legislative agenda for the next five years. In addition, the Supreme People’s Court (SPC) has recently issued a new judicial interpretation of the Law on the Application of Law to Foreign-Related Civil Relations, focusing on the ascertainment of foreign law in civil and commercial litigation.

2. Improving the Business Environment for Foreign Investment

Prof. Huang’s 2022 article invoked Xi’s statement that “the rule of law provides the best business environment” [法治是最好的营商环境], stressing that constructing FRROL is of key importance in this regard (p. 48). Huang emphasized that the rule of law is essential to an open economic system, that domestic and foreign market participants should be treated equally, that China should establish “open and transparent” regulatory rules and standards (p. 49).

He also listed the following priority tasks (id.):

• [On foreign investments in China, I recommend] improving the legal systems on foreign trade and investment; improving the “pre-establishment national treatment plus negative list” management system for foreign investment; improving institutions such as national-security review of foreign investment, antitrust review, national technical security list management, and the Unreliable Entity List; and strengthening protections for the lawful rights and interests of foreign investors . . . ;
• [On China’s outbound investments, I recommend] promulgating laws and regulations on outbound investment; streamlining the system for managing outbound investment; . . . providing legal protections for Chinese enterprises and citizens in “going global”; and protecting the legitimate rights and interests of Chinese citizens and entities overseas;
• [On international commerce, I recommend] improving international commercial dispute resolution mechanisms, enhancing the attractiveness and competitiveness of Chinese judicial and arbitral institutions, increasing the PRC’s actual influence in international investment dispute settlement, and studying the establishment of mediation systems and mechanisms for international commercial disputes.

Some recent Chinese legislation is consistent with Huang’s recommendations in this respect. He lauded the 2019 Foreign Investment Law as a milestone in the PRC’s legal history for being the first “comprehensive and systematic” foreign investment statute (p. 49). He also cited the State Council’s 2019 Regulations on Improving the Business Environment [优化营商环境条例], which, among other things, vow to “expand opening-up, vigorously promote foreign investment, and equally treat all market participants, including Chinese-funded enterprises and foreign-invested enterprises.” It is necessary to repeal or amend lower-level legislation and policies that are inconsistent with the Regulations, he added (id.).

At the most recent Politburo study session, Xi stressed that developing FRROL should go hand in hand with widening China’s opening-up. This is very much in line with Huang’s recommendations. Nevertheless, the PRC will need to do a lot of convincing, in particular on “safeguarding the lawful rights and interests of foreign enterprises,” as many of them find it increasingly difficult to operate in China.

3. Strengthening the Legal Basis of the Belt and Road Initiative

In line with official priorities, Prof. Huang argued that it is crucial to strengthen the legal basis of the Belt and Road Initiative (BRI) (p. 50). First, Huang called on the PRC to sign more legally binding BRI treaties with other countries and international organizations. Second, he underscored the importance of carefully evaluating other BRI states’ legal environments, “especially their policies and legal safeguards for foreign investment,” and fostering bilateral anti-corruption cooperation. Third, he urged Chinese outbound investors to use the law to protect their rights, including by stipulating dispute resolution mechanisms in advance to “prevent major investment risks at the source.” Fourth, he called for establishing dispute resolution mechanisms that are appropriate for the BRI. He praised the SPC’s “one-stop” international commercial dispute resolution platform as a “useful experiment” and proposed a “uniform” BRI dispute resolution mechanism in the long run.

The idea to promote FRROL within the BRI is already in full swing. And the issues Prof. Huang raised had already been priorities of BRI legal cooperation, in particular the establishment of an integrity-based Silk Road (centering on anti-corruption cooperation). Also, the PRC continues to promote China-based international dispute resolution. In late September 2023, for instance, the SPC issued its fourth batch of “typical” BRI cases in part to “improve the quality of civil and commercial adjudication” by Chinese courts and to “enhance their global credibility and influence.”  (For coverage and commentary of these cases, please this post on the Supreme People’s Court Monitor). Furthermore, China’s recent ten-year action plan for the BRI, released in November 2023, dedicates a subchapter to improving foreign-related legal service systems for the BRI, including BRI dispute resolution mechanisms.

4. Clarifying the Status of Treaties in Domestic Law

An aspect of FRROL stressed by Prof. Huang that has not appeared in Xi’s speeches is domestic application of international treaties. As Huang’s 2022 article pointed out, while some specialized Chinese civil and commercial statutes (e.g., Civil Procedure Law, Maritime Law, and Civil Aviation Law) provide that applicable treaties override conflicting domestic provisions in those areas, there are no general rules on the status of treaties in China’s domestic legal system (p. 51).

He then proposed a way to incorporate treaties into China’s system of legislation (id.). Treaties ratified by the NPCSC would, for instance, rank below the PRC Constitution but have the same force as statutes. He also recommended either enacting a general rule that treaties prevail over conflicting domestic legislation, or addressing conflicts between treaties and domestic law on a case-by-case basis (id.).

Huang’s article also addressed the application of treaties in China. He suggested that China, in keeping with international practice, distinguish between “self-executing treaties” (which are judicially enforceable upon ratification) and “non-self-executing treaties” (which becomes enforceable only through legislative implementation) (id.). For instance, private law treaties (e.g., civil and commercial treaties), “whose contents are relatively specific, operable, and closely related to citizens’ personal interests,” should be self-executing. In contrast, public law treaties (concerning, e.g., political and judicial matters), “whose contents tend to be relatively general and abstract, lack operability, and be closely related to national interests,” should be non-self-executing, so as to “safeguard national sovereignty.”

5. Expanding the Extraterritorial Application of Chinese Law

The extraterritoriality of Chinese law has become an increasingly important topic in Chinese discourse on FRROL. The Party’s 2019 Fourth Plenum vowed to “accelerate the construction of legal systems on the extraterritorial application of Chinese law”—a project that Huang urged Chinese authorities to implement “without delay” (p. 59). He also explained that the project would require coordinated efforts by legislative, administrative, and judicial organs. In practice, a growing number of Chinese laws contain extraterritoriality provisions. Recent examples include the 2023 Counterespionage Law (art. 10), 2022 Law Against Telecommunications Network Fraud (art. 3), 2021 Data Security Law (art. 2), and 2021 Personal Information Protection Law (art. 3).

In his article, Huang differentiated between legitimate extraterritorial application of domestic law and “abuse” of “long-arm jurisdiction” (p. 52). According to Huang, “abuse” comes in three forms. First, he criticized the “overly broad” assertion of extraterritorial jurisdiction by the courts of some states—in particular, the United States. He claimed that U.S. courts exercise extraterritorial jurisdiction based on “minimum contacts” with the United States from even “a single phone call, email, or bank transfer” anywhere in the world. Second, Huang cited unilateral trade sanctions imposed by the United States “in violation of WTO rules,” especially secondary sanctions that restrict third-party transactions with sanctioned entities. Third, Huang accused some states of interfering with other states’ internal affairs “in the name of ‘human rights.’” These arguments track official Chinese criticisms of U.S. long-arm jurisdiction, so also mostly missed the mark (while ignoring better ways to criticize U.S. extraterritoriality). “Minimum contacts,” for instance, not only is not part of the U.S. legal doctrine on extraterritoriality, but in fact works to limit the extraterritorial application of U.S. law.

Despite his enthusiasm for greater extraterritorial application of Chinese law, Prof. Huang did not clearly explain how the extraterritorial application of Chinese law would be substantively different from U.S. practice. Indeed, as one expert notes, China currently exercises extraterritorial jurisdiction on the same bases as the United States does, thereby “open[ing] itself to charges of hypocrisy.”

Assessment

Prof. Huang’s 2022 article offers valuable insights into the future development of FRROL.The concept’s scope and the PRC’s ambitions to implement it are remarkable, and it appears to be just a matter of time until the impact of this long-term project is felt by individuals, businesses, and political decisionmakers who deal with the PRC.

What to expect going forward?

First, we can anticipate more legislation in the realm of FRROL. For instance, the NPC recently codified “foreign-related fields” as long-term legislative priorities, and according to its legislative plan for the current five-year term, several projects with a relevant FRROL angle are in the pipeline, including updates to the Foreign Trade Law, Maritime Law, Customs Law, and Arbitration Law; as well as proposed Tariff Law, Law on Countering Transnational Corruption, Space Law, and Law of the Sea.

Second, improving the business environment for foreign investment is the current priority in the development of FRROL. But with shifts in domestic and international circumstances, as well as the Party’s evolving interpretations thereof, FRROL will likely be alternatively prioritized as a sword, a shield, or an accelerator of development. For foreign investors, this versatility may lead to a high level of uncertainty. Given the delicate geopolitical environment and Western companies’ growing reluctance to invest in the PRC, whether this aspect of FRROL can succeed depends on the implementation of the proposed measures to improve the business environment.

Third, the legalization process for the BRI is already ongoing and likely to accelerate. The BRI remains the top foreign-policy agenda item for Xi Jinping. It will be important to monitor China’s focus on anti-corruption cooperation within the BRI as a potential gateway to synergize its legal system with that of BRI states. And this focus appears to be borrowed from the European Union, which prioritized it as part of its enlargement process.

Whether China will develop into a true global hub for international dispute resolution remains to be seen. As Susan Finder has explained in detail, the SPC-led court system plays an active role in the development of FRROL. In the words of former SPC President Zhou Qiang: “People’s courts’ foreign-related adjudication is an important part of FRROL efforts.” While foreign-related cases heard by the Chinese courts make up only a small fraction of their overall caseload, their number is steadily rising.

Fourth, the status of treaties in domestic law will be a key issue to monitor as the PRC’s global interconnectedness expands, including through the BRI’s legalization process. At this point, apart from a provision in the new Foreign Relations Law barring China from ratifying treaties that contravene the PRC Constitution, there are otherwise no signs of concrete implementation measures.

Fifth, advancing the extraterritorial application of Chinese law is the most discussed aspect of FRROL outside of the PRC. Beijing appears to be interested in following the footsteps of the United States while pledging to avoid abusive “long-arm jurisdiction.” This is a fine line. Huang does not provide the necessary answers as to how this can be achieved in practice.

Finally, while FRROL focuses on domestic Chinese law, it also corresponds to the PRC’s increasing willingness to participate in the formulation of international rules as well as to contribute to and lead global governance reform. FRROL may very well serve as a catalyst for China’s integration of its domestic standards into international treaties as well as for its engagement in global governance reform within identified priority areas (e.g., regulating artificial intelligence and the digital economy).

Just like other grand visions of the PRC, FRROL is highly flexible and more process-oriented than result-oriented. The concept will take a long time to implement and is likely to continue evolving along the way. We are still witnessing the very first steps of this development. China is currently engaging in a massive capacity buildup of its domestic, international, and foreign-related law expertise. Given the Chinese leadership’s strong emphasis on the swift development of FRROL, everyone focusing on China is well-advised to pay close attention.

Dr. Moritz Rudolf is a Research Scholar in Law and Fellow at Yale Law School’s Paul Tsai China Center, where he focuses on the implications of China’s rise for the international legal order.

1. All inline page citations are to 黄惠康 [Huang Huikang], 从战略高度和全球视角认知和推进涉外法治建设 [Understanding and Advancing the Development of Foreign-Related Rule of Law from a Strategic Height and a Global Perspective], 法治现代化研究 [Law & Modernization], no. 5, 2022, at 37. ↩︎
2. Id. at 37 n.*. ↩︎
3. We formatted the blockquotes in this post with boldface and bullet points to enhance readability. ↩︎