Arizona Journal of International and Comparative Law
This article provides an objective assessment of the potential risks that foreign lawyers face in China as they push the boundaries of the limits on their activities set by Chinese law. When the Shanghai Bar Association (SBA), a government-controlled organization, accused foreign lawyers of violating Chinese law and called for official action, some scholars dismissed the threat, claiming that there was no legal basis for a crackdown on foreign lawyers. These scholars erroneously maintained that the Chinese laws that regulate foreign lawyers are ambiguous and create "gray areas." In fact, the claims of the SBA are justified because the applicable provisions of Chinese law are clear and unambiguous, and the conduct of some foreign firms appears to plainly exceed what is permitted. Foreign firms are at risk of being found to have violated relevant legislative enactments, particularly because of the rise of nationalism in China and the emergence of a hostile regulatory environment that poses threats to foreign investors, including foreign law firms.
This article sounds an alarm for foreign law firms currently practicing in China and for other firms contemplating entering the Chinese legal market. After providing an overview of the laws regulating foreign lawyers, this article examines the plain meaning of these laws. Since the Chinese government has not issued an official interpretation of the two most relevant laws, it is imperative for firms to focus on the actual wording of the governing provisions. An examination of their "plain meaning" reveals that the laws are clear and unambiguous. Any effort to argue that the relevant provisions are ambiguous is ill-advised because that argument masks the perils faced by foreign law firms and their clients.
Finally, this article examines certain unique features of the Chinese legal environment, such as local protectionism, judicial corruption, and the existence of the adjudication committee. These issues, though not taught in Chinese law schools, are clearly understood by practicing Chinese lawyers. However, they are often not adequately appreciated by foreign lawyers.
Chenglin Liu, Risks Faced by Foreign Lawyers in China, 35 Ariz. J. Int'l & Comp. L. 131 (2018).