China's Legal Scene: Reform and the Race for Business

By Arjun Subrahmanyan

Visiting Shanghai or Beijing today and seeing the new high-rise office towers that house some of the leading international and domestic law firms, it is amazing to consider that China's modern legal history is only a little over 20 years long. With the beginning of economic reforms in 1978, and the promulgation of the first foreign investment laws in 1979, China began a process of building legal institutions that has accompanied an extraordinary process of economic liberalization and growth; one that in many ways has produced results that are the envy of many other developing countries around the world.

In the aftermath of the Cultural Revolution, China's leaders sought legitimacy by creating an economic system that bettered people's lives and created wealth. A vital aspect of this process has been the creation of a legal system to protect economic interests. At the beginning of the reform period, China was forced to resurrect the legal system, including the legitimacy of law as a profession. Given the starting point for this process, when there was hardly any legal education and professionalism was subordinate to political goals, the country's progress to date in creating a complex system of commercial law has been nothing short of astounding.