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Following is the speech by the Secretary for Justice, Ms Elsie Leung at the opening ceremony of the "World Trade Organization and China Law Seminar" organised by the Isinolaw Research Center and WTO Shanghai Research Center today (November 20):

Dr Priscilla Leung, Professor Wang Yaotian, ladies and gentlemen,

Good morning! It is my great honour to be invited to this Opening Ceremony and to meet distinguished scholars, practitioners and guests from different parts of the world, to whom I extend my warmest welcome. I should also thank Dr Leung and Professor Wang for all their good efforts in organizing this seminar.

The Long Struggle

It has been more than 14 years since China applied for resumption of her membership in GATT. Following the transformation of GATT into WTO in 1995, China has stepped up its lobbying efforts, with a view to further open her domestic markets and to align them with the international one.

The long struggle, as you all know, has not been smooth sailing. Although progresses were made from time to time, not many of them brought breathing-space before new hurdles appeared. The comment that China has been taking a "roller-coaster ride" probably carries some justification.

When China signed the agreement with the US in November last year, her accession to WTO was widely described as a "done-deal". As the agreement with the EU was reached in May this year, China was reported to have obtained the support of the "quasi-totality" of the WTO membership. The highlight of this optimism was the US bill on normal trade relations with China, which became law about 6 weeks ago(1).

Against this background, the subsequent developments have come much as an anticlimax. As talks continued at the WTO headquarters in Geneva last month, Christopher Pattern, EU's External Relations Commissioner, commented that "very tough negotiations"(2) were being conducted. Although these difficulties are now overcome, China has to resolve its differences with Mexico, the last WTO member on the negotiation list. The demands of Mexico, however, was reported to be "higher than any country has asked for"(3).

While it still remains just a matter of time for China to gain this global membership, there are now some doubts if this can be achieved this year, or before President Clinton leaves his office in January.

In any event, the hard work of the Chinese officials in all these years demonstrates clearly their unswerving devotion. I salute their tireless efforts and hope that their persistence will soon be rewarded.

A Move for Common Good

The accession to WTO has clear advantages for China, as it fits nicely into her plan of economic development. Although China has lifted more than 200 million people out of poverty in the past 20 years(4), a lot more is being done to further raise the general living standard. While the Tenth Five-Year Plan for Economic and Social Development is being drafted, the bold decision to develop the western regions has been announced. The years ahead will certainly be marked with rapid growth, both in terms of trade volume and economic restructure.

China's move is also welcomed by the world as a whole, for the boost it gives to economic globalization. With the advancement of science and particularly information technology nowadays, mankind has never been closer than before. Economic globalization is no longer a way for the future, but a happening event, an everyday way of business. The underlying theme is a new order for common good. The goals and values of this new order is best set out in the Recital of the WTO Establishing Agreement, which recognizes that -

"...[multilateral] relations in the field of trade and economic endeavour should be conducted with a view to raising standards of living, ensuring full employment and...allowing for the optimal use of the world's resources in accordance with the objective of sustainable development...and seeking to protect and preserve the environment..."

With these goals and values so in mind, I feel sure that China's joy for joining WTO will be shared by all her fellow members, and everyone who treasure this spirit of common good.

A New Era for Chinese Law

Speaking of a new era for Chinese law, my observation is that it has already begun. A comprehensive set of published laws, coupled with a stable and transparent legal system, are at the very core of the things that any foreign investor will look for. In China, the reform of laws has taken place well before the WTO negotiation enters its final stage. I should perhaps quote some examples to illustrate my point.

The most significant step was the amendment of the constitution last year(5). Article 5 now enshrines the principle of "rule of law", and the determination to govern the country "according to law". Equally welcomed by the investors is Article 11, which expressly protects "the legitimate rights and interests of...private business".

Apart from constitutional amendment, a number of major trade-related laws came into effect last year. These include the new Securities Law(6), which relates to the listing and trading of securities, and the unified Contract Law(7), that supersedes the respective laws governing foreign economic and other types of specific contracts.

As to revision of existing laws, China's strong commitment was reiterated by Vice Minister LONG Yongtu, when he addressed the WTO Working Party in Geneva(8) earlier this month. He cited the recently revised Customs Law as an example, which is now consistent with the WTO Customs Valuation Agreement and the Agreement on Rules of Origin. He also revealed that more than 30 laws and regulations have been put on the agenda for revision. Further, efforts are being made to review department rules.

The protection of Intellectual Property Rights is another major concern for investors. In this regard, the revision of the Patent Law has been concluded in August. The draft amendment on the Trademark Law and the Copyright Law will be submitted to the Standing Committee of the National People's Congress next month(9).

Participation by Lawyers

A reform of the laws requires active participation of lawyers, including foreign lawyers. In particular, foreign lawyers have an important role to play in areas affecting foreign investors, such as syndicated loan, corporate restructure, project finance, telecommunication and etc. At present, because of the restrictions imposed on the provision of legal services, there are just about 100 foreign law firms operating in China(10). The restrictions are understandable, having regard to the fact that lawyers as a profession independent from the state only came into being in recent years, and the number of lawyers who are trained in practice on international standards are limited in number. If foreign firms are entitled to employ Chinese lawyers, it would be easy for international law firms to capture the cream of the talents with high salaries and this would impede the development of local expertise.

In July, the Ministry of Justice announced a new policy on the operation of foreign law firms. Many of the current restrictions will be lifted in phases. These will result in the free choice of office locations, and the abolition of the "One Firm, One Branch" rule. It is also expected that the system of granting operation licences will be made more open, reasonable and objective. In light of this new policy, the legal services market will be opened up at quick pace.

For Hong Kong lawyers, which comprise the bulk of the audience today, we all have been told of our edges in exploring the Chinese legal services market, including geographical proximity, historical and cultural ties, as well as our years of experiences in serving foreign clients. I would however urge you not to underestimate our competitors, who will certainly be first rate practitioners coming from various parts of the world. We must also appreciate that during the days when China first opened up its market to the outside world, all Hong Kong lawyers needed to do was to find a law firm in the Mainland and play a "left-hand-right-hand" position. With the legal profession fast developing in the Mainland, and the standard of English of Mainland lawyers improving, unless we can provide value added service to investors in Hong Kong and elsewhere in the world, we will soon be replaced by Mainland and overseas lawyers who will be able to communicate, take instructions and give advice to clients in Hong Kong and elsewhere in the world.

To enhance our competitiveness, we must strive to upgrade ourselves - our Chinese language skills, our professional abilities, and most importantly the understanding of our motherland, including the changing laws.

On that note, I must commend the visions of those organizing this seminar, namely Isinolaw Research Centre, WTO Shanghai Research Center and the co-organizers. I am sure that this seminar will help the participants to better equip themselves for the tremendous opportunities ahead.

Conclusion and The Way Forward

China's efforts for joining WTO has resulted in a heavy legislative agenda. As I have just said, the new era for Chinese law has already begun. That agenda will gain more weight as accession approaches, and yet even more weight thereafter, as China moves her way forward in fulfilling the duties of a WTO member.

China's determination to create a new legal order for foreign investors is beyond doubt. The continuing improvement of the laws is facilitated by a market force, the strength of which is indicated by the vast number of potential investors. For legal practitioners and scholars, what lies ahead is both challenging and rewarding. Our determination to rise to the challenges is not only to seize better opportunities for our practice, but also in pursuit of a mission : the mission to play our part in helping our own country in the development of the rule of law and the construction of a legal system that would meet the international standard in the new economic order.

Before I end this speech, I wish to pay special tribute to Professor Wang, for his pioneering efforts pertaining to China's accession to WTO. Professor Wang has taught, researched as well as drafted extensively laws on various related subjects. He has since 1984 been China's national adviser on WTO affairs. Had he so chosen, he could have happily retired long ago. But he is still selflessly serving his country. His dedication is indeed admirable.

Lastly, may I wish all of you a very stimulating and enlightening seminar, and for guests from overseas, the most pleasant stay in Hong Kong. Thank you.

Footnote:

(1) The bill was signed by President Clinton on 10.10.2000.

(2) "EU leader bullish on entry deal" - SCMP dd 21.10.2000.

(3) "China says Mexico demands stymie WTO efforts" - SCMP dd 14.11.2000.

(4) See speech by President Jiang Zemin at a luncheon co-sponsored by US National Committee on US-China Relationships and US-China Business Council, on 8.9.2000 in New York (Full text available at www.uschina.org)

(5) The amendments were passed on 15.3.1999.

(6) It came into effect on 1.7.1999.

(7) It came into effect on 1.10.1999.

(8) The 13th session of the Working Party on China's accession to the WTO. Mr. LONG's statement is available on WTO's official website : www.wto.org.

(9) See Mr. LONG's statement.

(10) The latest available figure is 105, as at June 1999. See "China's Top 2000" 1999, P. 8.

End/Monday, November 20, 2000

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