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Debt Collection in the Less Developed Regions of China: An Empirical Study from a Basic-Level Court in Shaanxi Province*

Published online by Cambridge University Press:  20 June 2011

Xin He
Xin He
Affiliation:
City University of Hong Kong. Email: [email protected]
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Abstract

Contrary to the prevailing view in the literature that Chinese courts have been notoriously incompetent in enforcement, this article contends that the situation may not be so bad. Based on in-depth fieldwork investigations of 60 debt collection cases at a basic-level court in the less developed hinterland region of China, this study finds that the majority of plaintiffs recover most of their debts through the court. Local protectionism persists, but seems to be contained within legal rules. Nevertheless, the underdeveloped economy of the region has limited the effectiveness of several core judicial reform measures. Unlike the situation in more developed regions, the forces of economic development outside the court have not been significant enough to reshape the power structure inside the court. The overall situation suggests, however, that China's efforts in the field of legal reform, including the promulgation of substantive laws as well as strengthened institution-building have, in general, been conducive to the effective processing of routine debt collection cases.

Type
Special Section on Law and Enforcement in China
Information
The China Quarterly , Volume 206 , June 2011 , pp. 253 - 275
Copyright
Copyright © The China Quarterly 2011

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References

1 China Law and Governance Review 2004, available online at http://www.chinareview.info/issue2/pages/legal.htm, accessed 19 April 2007.

2 Ibid.

3 “Half of China's civil court rulings remain on paper,” People's Daily, 13 March 2004, available online at http://english.people.com.cn/200403/13/eng20040313_137390.shtml, accessed 20 April 2007. The title of the article indicates that half of the civil court rulings are not enforced. The article specifically mentions that according to some official estimates, the enforcement rate on loans borrowed by SOEs from banks is only 12%.

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21 “Susongfei jiaona banfa” (“Measures for taking litigation fees”), issued on 19 December 2006 by the State Council and implemented on 1 April 2007, available online at http://news.xinhuanet.com/legal/2006-12/30/content_5549692.htm, accessed 29 December 2009.

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23 A sample containing 60–80 cases would probably present a picture of the normal distribution.

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25 In September 2002 a judicial policy on mediation was promulgated, re-emphasizing higher mediation and withdrawal rates. See “Guanyu shenli sheji minshi anjian de youguan guiding” (“Several stipulations on adjudicating mediation-related cases”), promulgated by the SPC.

26 Usually the benefits include a lower appeal rate and a simpler court decision.

27 Interview with Judge A, 14 November 2008.

28 Minxin Pei, “Does legal reform protect economic transactions?” pp. 180–210.

29 Interviews.

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37 Article 18 of “Renmin fayuan wu nian gaige de gangyao” (“The five-year reform outlines”) states: “The court decisions shall be rendered by the chief adjudicator or the sole adjudicator according to the law by 2000.” Promulgated by the SPC on 20 October 1999.

38 Interviews with Judges A and D.

39 Interviews.

40 Not all the plaintiffs were in a position to respond to this question, because some of them withdrew their cases almost immediately after they had filed the lawsuits. Overall, only 18 cases, or 30%, entered into the compulsory enforcement stage. Only this group of plaintiffs experienced the court's enforcement abilities.

41 In the Pearl River Delta study, 71% held positive views on the adjudication phase, and only 32% were negative about the enforcement phase. See Xin He, “Enforcing commercial judgments,” p. 455.

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54 Tong Ji, “The basic situations with regard to adjudication and enforcement,” at p. 78.

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