Research Group on 'China' FY2021-#2

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Introduction

Reform of the judicial system is one of the most important reforms under Xi Jinping's administration in order to realize the "rule of law". One of the reform proposals that has attracted the most attention is the centralization of the People's Court system. This is because Party committees at the same administrative level as the People's Courts have been in control of the People's Courts' personnel affairs, while governments at that same administrative level have been in control of the People's Courts' budgets. In order to drastically change this structure, the personnel and financial affairs of the Intermediate and Basic People's Courts (hereinafter referred to as "local People's Courts") have been unified and managed by provincial-level Party committees and the government. By centralizing the governance of local People's Courts at the provincial level, the reform aims to increase the independence of local People's Courts from the Party committees and governments at each administrative level. This reform has been realized in 21 provinces, while local People's Courts continue to be administered at the district level in 13 provinces¹. The degree of success in centralizing the People's Court system has varied from region to region.

This paper focuses on reform of the judicial system regarding the centralization of the People's Court system, compares the implementation status of reform in each region, and examines the conditions for success in judicial system reform. In addition, future developments based on the implementation status of judicial system reform in each region will be discussed.

1. Implementation Status of Judicial System Reform

This paper focuses on Shanghai, which was a pioneering area of a Judicial System Reform Test Zones, and Guangdong and Jiangxi provinces, which imitated Shanghai in implementing the reform. Shanghai and Guangdong are successful areas and Jiangxi is an unsuccessful area, but even the two successful areas did not implement the exact same reform plan. In this chapter, we will summarize the implementation status in each region based on secondary data.

1-1. Shanghai

The "Separate Fiscal Balance Management (Both Lines of Balance)" was implemented based on the "Pilot Plan for Reforming the Judicial System in Shanghai" adopted in June 2014 (Xu [2015]). Separate fiscal revenue and expenditure management refers to the fact that not only are the budgets of the local People's Courts ratified by the municipal People's Congress and distributed to the various courts by the municipal finance department in accordance with regulations, but also the litigation fees and fines collected by the local People's Courts are paid to the municipal-level finance department for distribution to the respective regions after investigation and registration by the municipal-level finance department. All revenues obtained, including the budgets of the local People's Courts, are now managed by the city's finance department (Yang [2016]). This allows the municipal finance department to manage the finances of the local People's Courts in a unified manner.

As for unified management of personnel affairs at the city level, a "unified nomination but appointment at different levels" system was implemented. The leadership cadres of the local People's Courts are nominated by the High-level People's Court Party Caucus and are jointly inspected by the Political Department of the local People's Courts, the organizational departments of the Party committees at each administrative level, and the Political and Legal Affairs Commission. Then, the view of the Party committee is sought before the People's Congress at each administrative level appoints or dismisses them. For personnel appointments other than leading cadres, the Standing Committee of the People's Congress at each administrative level appoints and dismisses persons selected by the Party Team of the High-level People's Court, nominated by the Judge Selection (Disciplinary) Committee established in the High-level People's Court Office and proposed by the President of the People's Court at each level in accordance with legal procedures (Yang [2016]). Appointments to the local People's Courts were changed to start with nominations by the Party organizations of the High-level People's Courts, which are provincial-level People's Courts.

1-2. Guangdong Province

In the unified provincial-level management of finances in Guangdong Province, the High-level People's Court has gained the right to manage and allocate the finances of the local People's Courts, unlike in Shanghai (Zhang and Li [2014]). If we take Guangzhou and Shenzhen as examples to look at personnel costs in the People's Court budgets, basic salaries are managed by the provincial-level finance department, but bonuses and allowances are managed and borne by the finance department at the same administrative level as the people's court (Liu [2017]). In contrast to Shanghai, authority over fiscal management in Guangdong is partially delegated to the High-level People's Court and the provincial finance department.

Second, different methods were used to appoint the president of the local People's Courts, leading cadres, and judges. While the provincial-level Party committee has unified control over the appointment of the president of the People's Court, the Party committee at the municipal and not the provincial level controls the appointment of leading cadres². As in Shanghai, the provincially established Judge Selection (Disciplinary) Committee has unified control over the selection of initial judges and their promotion to higher courts³. However, regarding the selection of judges of the Basic People's Courts, the Intermediate People's Court has been delegated the tasks of conducting examinations and evaluating personnel in order to reduce the workload of the High-level People's Court (Fang [2019]). As with financial management, the authority over personnel affairs has also been partially delegated to local organizations such as municipal-level Party committees and the Intermediate People's Court.

1-3. Jiangxi Province

As one of the regions in the third round of the Judicial System Reform Test Zones, Jiangxi Province attempted to implement judicial system reform on a trial basis, but the question arose as to how to take into account economic disparities within the province when implementing unified management at the provincial level. For example, judges' remuneration consists of basic salaries, allowances, benefits and bonuses, but the finance department at the provincial level could not solve the problem of how to ascertain the different economic conditions in different regions and how to allocate remuneration based on these differing conditions (Ye [2017]).

Another problem was eliminating the risk of intervention from higher-level courts into lower-level courts. If the provincial-level government, the Party committee or a higher-level People's Court delegates work to the Intermediate People's Court to a certain extent, as is the case in Guangdong Province, excessive interference from the higher-level court into the work of the lower-level court may occur. Even if centralization of the People's Court system makes local People's Courts independent of the government and Party committees at each administrative level, the independence of lower-level courts from higher-level courts cannot be guaranteed unless the internal regulations of the People's Courts and the scope of supervision of lower-level courts by higher-level courts are developed (Ye [2017]). For this reason, Jiangxi has abandoned unified provincial-level management of finances and personnel matters.

2. Conditions for Successful Judicial System Reform: A Comparison of Shanghai, Guangdong, and Jiangxi Provinces

Shanghai has achieved unified management of finances and personnel affairs at the provincial level, Guangdong has implemented partial unified management, while Jiangxi has chosen to continue with the existing management system. The success of judicial system reform in these three regions depends on the size of the province or city, specifically, on their diversity in terms of the number of local People's Courts in the province and the economic disparities within the province. Looking first at the number of local People's Courts in each province, Shanghai has three Intermediate People's Courts and 18 Basic People's Courts⁴, Guangdong Province has 21 Intermediate People's Courts and 134 Basic People's Courts⁵, and Jiangxi Province has 11 Intermediate People's Courts and 104 Basic People's Courts. Shanghai has by far the smallest number of courts. Because it takes a lot of manpower for the provincial finance or organization department to manage specific expenses and personnel information at each level of People's Court based on the Party Central Committee's request, it was difficult for Guangdong and Jiangxi, which are more than five times larger than Shanghai, to conduct unified management of finance and personnel at the provincial level (Xie [2015], Wang [ 2021]). This resulted in such measures as Guangdong's outsourcing of personnel matters of the Basic People's Court to the Intermediate People's Court.

Second, there is diversity within provinces. If a provincial-level finance department allocates budgets on an average basis without taking into account the financial situation of each People's Court, judges in economically affluent areas will be concerned about the reduction of their salaries. On the other hand, judges in economically poor regions will expect to receive additional pay due to the possibility of getting more than the People's Court's original budget (Niu [2016]). This concern and expectation arise from the fact that economic circumstances in a province vary, making it difficult to manage budgets uniformly at the provincial level. As a result, in economically affluent areas such as Guangzhou and Shenzhen, bonuses and allowances other than basic salaries were managed and borne by the finance department at the same administrative level as the People's Court. This was done in order to avoid the reduction of judges' salaries compared to their previous salaries by having the provincial level manage them in a unified manner. In addition, Jiangxi Province decided not to have a unified budget managed by the provincial-level finance department because it could not solve the problem of how to reflect the different economic conditions of each region in the budget allocations.

3. Future Developments in Judicial System Reform

In response to the results in the Judicial System Reform Test Zones, the Supreme People's Court announced the Fifth Five-Year Reform Program of the People's Court (2019-2023) (hereinafter referred to as the "Five-Year Reform Program"). The Five-Year Reform Program aims to realize unified management of personnel and finances at the provincial level nationwide, while pointing out the need to clarify the authority of the President of the People's Court and the Chief Justice of the People's Court, as well as the scope of their supervision and management of trials⁶. Although the Five-Year Reform Program did not include any description of the conditions of trials that need to be supervised by the President of the People's Court or the presiding judge, it did state that "a system for recording the entire process of supervision and management of trials by the President of the People's Court and the presiding judge will be fully established," which suggests that the balance between the autonomy of judges and the authority of the President of the People's Court and the presiding judge in trials will be adjusted through the accumulation of work within the People's Court. We believe that the balance between the autonomy of judges and the authority of the president and chief justice of the People's Court will be adjusted through the accumulation of work within the People's Court. As part of judicial system reform, unified management at the provincial level will be further promoted to increase the independence of local People's Courts, while supervision and management within the People's Courts will be further strengthened.

Conclusion

In this paper, I have introduced the cases of Shanghai, Guangdong, and Jiangxi to show how the unified management of personnel and finance at the provincial level has been implemented as part of the centralization of the People's Court system, and discussed the conditions for success. The conditions for successful judicial system reform discussed in this paper are the number of local People's Courts in the province due to differences in the size of provinces or cities, and the diversity within the province such as economic disparities. The Five-Year Reform Program aims to develop unified management of personnel and finances nationwide at the provincial level and, at the same time, strengthen supervision and management within the People's Courts in line with the results achieved in the Judicial System Reform Test Zones.

In order to realize unified management at the provincial level nationwide, I expect that there will be partial unified management at the provincial level based on the characteristics of regions such as Guangdong Province. I believe that the control of governments or Party committees at each administrative level over the personnel and finances of local People's Courts may be limited but will continue. In addition, judges in local People's Courts will be placed under a dual management system, as the internal supervision of judges in court work is also expected to increase.

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(This is an English translation of a paper originally published in Japanese on September 15, 2021.)