Skip to main content
SpringerLink
Log in

Oracle of Delphi: How China’s Judiciary Divines the Notion of ‘Financial Security’?

  • Article
  • Published:
European Business Organization Law Review Aims and scope Submit manuscript

Abstract

In the past few years, the term financial security has been increasingly referred to by politicians in China’s public discourse. This term was meant to broadly denote national security considerations in relation to financial markets. This article draws on and analyses a recent study of 242 Chinese court decisions undertaken by the authors and explores the nature and the extent of the term ‘financial security’ as used in judicial decisions in China. Our research demonstrates that the judiciary makes frequent use of this term even though it is a term which remains to be defined in legislation and regulation. This article offers a means of categorising the manner in which the term financial security is deployed, which may assist in a better understanding of the Chinese courts’ judgments in the contemporary context as well as in the future. It also offers an account of the thinking and motivation behind legal reasoning that assists in gaining an insight into the use and implications of financial security that appear to underpin these decisions. The adoption of the term financial security, similar to the Greek myth of the Delphic Oracles, is indicative of the role played by the courts in the light of the Chinese political system.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Figure 1

Similar content being viewed by others

Notes

  1. The term financial security was first introduced by President Xi Jinping in 2014 at the first meeting of the Chinese Communist Party National Security Committee. Financial security in the West generally refers to the security of personal finance. See Xinhua Net (2014).

  2. Rodriguez (2010), p 129; Borghard (2018).

  3. Sarnikar and Johnsen (2009), p 1.

  4. Sarnikar and Johnsen (2009), pp 6–7, 14–21.

  5. Rodriguez (2010), p 132.

  6. ‘Support to Critical Infrastructure at Greatest Risk (“Section 9 Report”) Summary’, US Department of Homeland Security (Presidential Executive Order, 8 May 2018), https://www.dhs.gov/sites/default/files/publications/EO-13800-Section-9-Report-Summary-20180508-508.pdf. Section 9 of Executive Order 13636 defines critical infrastructure entities as organizations that control critical infrastructure in which ‘a cybersecurity incident could reasonably result in catastrophic regional or national effects on public health or safety, economic security, or national security’.

  7. Borghard (2018), p 1.

  8. Borghard (2018), p 2.

  9. Rehman (2011), pp 123–124.

  10. Rehman (2011), pp 124–126. Accordingly, when a financial crisis occurs, an economic crisis ensues and governments are forced to review all expenditures, including defence plans and priorities.

  11. Rodriguez (2010), pp 135–136.

  12. Rodriguez (2010), pp 132–133.

  13. Malkawi (2011), p 191. Malkawi points out how national security events, such as the September 11 terrorist attacks, result in governments adopting security measures that are antithetical to trade and investment.

  14. Kuester (2013), p 75. Given the intersection between transnational financial crimes and threats to national security, foreign policy or the economy of the US, he argues, ‘the tools of the national security community are important to worldwide efforts to combat these crimes’. Kuester explains how an exchange of influence between law enforcement authorities and national security agencies can be mutually beneficial for both parties.

  15. Jianchi Zongti Guojia Anquanguan, Zou Zhongguo Tese Guojia Anquan Daolu (坚持总体国家安全观 走中国特色国家安全道路) [Adhering to National Security and Following National Security with Chinese Characteristics], http://www.xinhuanet.com//politics/2014-04/15/c_1110253910.htm (accessed 20 February 2020).

  16. Sina News (2014).

  17. Meng Jianzhu was one of the most powerful politicians in China. See People.com.cn (2013).

  18. See for detailed discussions on those scandals He (2018), p 230.

  19. Similarly, successive US Administrations have identified the deterrence of threats to the international financial system as a national security goal: For over a decade, government administrations have emphasised the importance of deterring and combating threats to the international financial system by identifying it as a national security goal. As new financial threats emerge, government policies build upon and refine prior efforts. However, the policies remain roughly consistent with the goals of prior administrations. The common security concerns evidenced by National Security Strategy documents throughout the Clinton, Bush, and Obama Administrations have been to combat crimes within the international financial system.

  20. Guoyou Zhongdian Jinrong Jigou Jianshihui Zhanxing Tiaolie (国有重点金融机构监事会暂行条例) [Regulation on Important State-owned Financial Institutions’ Supervisory Committee promulgated by the China Banking Regulatory Commission in 2000].

  21. Gongye Chanpin Shengchan Xukezheng Guanli Tiaolie (工业产品生产许可证管理条例) [Regulation on the Administration of Production Licences for Industrial Products issued by the State Council in 2005].

  22. For example, Zhongguo Jinchukou Yinhang Jiandu Guanli Banfa (中国进出口银行监督管理办法) [Measures for the Supervision and Administration of the Export-Import Bank of China], promulgated by the China Banking Regulatory Commission (dissolved) on 15 November 2017.

    According to Art. 33, the Export-Import Bank shall establish an information technology framework, an infrastructure and a network information system that meet the requirements of national financial security. See also Art. 32: the Agricultural Development Bank of China shall establish an information technology framework, an infrastructure and a network information system that meet the requirements of national financial security.

    See also Art. 27: the China Development Bank shall establish an information technology framework, an infrastructure and a network information system that meet the requirements of national financial security.

  23. Jinrong Jigou Fanxiqian Guiding (金融机构反洗钱规定) [Provisions on Anti-money Laundering through Financial Institutions], promulgated by the People’s Bank of China on 3 January 2003. According to Art. 1, the provisions were promulgated in accordance with the Law on the People’s Bank of China and other laws and administrative regulations.

  24. Jiceng Jinrong Danwei Zhian Baowei Gongzuo Zanxing Guiding (基层金融单位治安保卫工作暂行规定) [Provisional Regulations on Local Financial Institutions’ Security and Safeguarding Work], promulgated by the Ministry of Public Security and the People’s Bank of China on 22 February 1994. According to Art. 34, the superior financial institution, the financial institution or the Public Security shall reward entities or individuals who have been exemplary in […] 5) safeguarding financial security.

  25. In recent years, the US courts have acknowledged the impact that the financial system has on national security. Judicial discussion in this area primarily revolves around the occurrence of illicit activities and transnational crimes, such as money laundering and terrorist financing. Given that these activities pose just as significant a threat to the US national economy and security, courts place weight on such considerations in their legal reasoning, particularly where legislation expressly requires this. In United States v. Zarrab 2016 WL 6820737, a defendant was accused of conducting international financial transactions and concealing from US banks the fact that the services were being provided to the Government of Iran. In this case, the Court expressly affirmed that the International Emergency Economic Powers Act (IEEPA) and the Iranian Transactions and Sanctions Regulations (ITSR) ‘reflect the United States’ interest in protecting and defending itself against […] Iran’s sponsorship of international terrorism […] which implicate the national security, foreign policy, and the economy of the United States’. It was also accepted that the Iranian embargo was intended to deal with ‘the unusual and extraordinary threat to the national security, foreign policy, and economy of the United States posed by the actions and policies of the Government of Iran’. Similarly, in FBME Bank Ltd v. Lew 125 F.Supp. 3d 109, the US Treasury Department’s Financial Crimes Enforcement Network (‘FinCEN’) promulgated a Final Rule, which prevented a financial institution from continuing to do business in the US on the basis that it was of ‘primary money laundering concern’, and thus a threat to national security and the US financial system. In this case, the Court recognized the ‘grave threat to national security that financing of terrorist activity and transnational crime poses’. The Court further emphasized that ‘eliminating that financing, and extricating it from the U.S. financial system, are of paramount importance to the Government and the public’. Even so, the Court granted a preliminary injunction to the financial institution because it did not pose a current threat to the US financial system. The Court found that the financial institution was unable to access the US banking system, thus minimising the harm to the Government and the public from granting a temporary injunction.

  26. Guangdongsheng Gaoji Renmin Fayuan (广东省高级人民法院) [High Court of Guangdong Province], Xingshi Caiding Shu (刑事裁定书) [Criminal Order] (2008) Yuegaofa Xingyi Zhongzi 170 (粤高法刑一终字第170号) [Criminal Case, Final Instance, No. 170].

  27. Zuigao Renmin Fayuan (最高人民法院) [Supreme People’s Court of China], Minshi Caiding Shu (民事裁定书) [Civil Order] (2014) Minyi Zhongzi 30 (民一终字第30号) [Civil Case, Final Instance, No. 30].

  28. They all have varying degree of legal effects. See Guo (2018), pp 170–192. See also, Huang (2012), pp 124-129.

  29. Zhigao Renming Fayuan guanyu Renming Fayuan Zai Hulianwang Gongbu Caipan Wenshu de Guiding (最高人民法院关于人民法院在互联网公布裁判文书的规定) [the Supreme People’s Court’s Provisions on the Publication of Judgments on the Internet issued by the People’s Courts in 2014].

  30. OpenLaw (2016).

  31. Zhou Qiang, the then President of the Supreme People’s Court, said that it was somewhat selective in deciding which judgments were to be made public. See Court.gov.cn (2016).

  32. Zuigao Renming Fayuan Gongbao (最高人民法院公报) [Supreme Peoples’ Court’s Gazette].

  33. Shangshi Shengpan Zhidao (商事审判指导) [Guide on the Adjudication of Commercial Matters].

  34. Gansusheng Gaoji Renmin Fayuan (甘肃省高级人民法院) [High People’s Court of Gansu Province], Minshi Panjue Shu (民事判决书) [Civil Judgment] (2015) Ganmin Zhongzi 207 (甘民二终字第207号) [Civil Case, Final Instance, No. 207].

  35. Qingdaoshi Zhongji Renmin Fayuan (青岛市中级人民法院) [Intermediate People’s Court of Qingdao Municipality], Minshi Panjue Shu (民事判决书) [Civil Judgment] (2014) Qingmin Yizhongzi 157 (青民一终字第157号) [Labour Case, Final Instance, No. 157].

  36. Langfangshi Zhongji Renmin Fayuan (廊坊市中级人民法院) [Intermediate People’s Court of Langfang Municipality], Minshi Panjue Shu (民事判决书) [Civil Judgment] (2016) Ji 10 Minzhong 1719 (冀10民终1719号) [Civil Case, Appeal Instance, No. 1719]. See also, Kaifengshi Zhongji Renmin Fayuan (开封市中级人民法院) [Intermediate People’s Court of Kaifeng Municipality], Minshi Panjue Shu (民事判决书) [Civil Judgment] (2016) Yu 02 Minzhong 2899 (豫02民终2899号) [Civil Case, Appeal Instance, No. 2899].

  37. Taizhoushi Luqiaoqu Renmin Fayuan (台州市路桥区人民法院) [People’s Court of Luqiao District, Taizhou Municipality], Minshi Panjue Shu (民事判决书) [Civil Judgment] (2006) Luminer Chuzi 750 (路民二初字第750号) [Civil Case, First Instance, No. 750].

  38. Guanyu Jingyibu Jiaqiang Jinrong Shengpan Gongzuo de Ruogan Yijian (关于进一步加强金融审判工作的若干意见) [Notice of the Supreme People’s Court on Issuing the Several Opinions on Further Strengthening the Adjudication of Finance-related Cases].

  39. China Court (2019).

  40. A. Hamilton, Federalist No. 78, 1788.

  41. Marbury v. Madison, 5 US 137 (1803).

  42. People.com.cn (2019).

  43. China News (2014).

  44. Ji (2006), pp 4-20.

  45. Deckert and Vikers (2011), p 44.

  46. Mattila (2006), p 39.

  47. Zaozhuangshi Shizhongqu Renmin Fayuan (枣庄市市中区人民法院) [People’s Court of Shizhong District, Zaozhuang Municipality], Minshi Panjue Shu (民事判决书) [Civil Judgment] (2016) Lu 0402 Minchu 2823 (鲁0402民初2823号) [Commercial Case, First Instance, No. 2823].

  48. Ai (2008), pp 98–151.

  49. Nanjingshi Xuanwuqu Renmin Fayuan (南京市玄武区人民法院) [People’s Court of Nanjing City, Xuanwu Municipality] Minshi Panjue Shu (民事判决书) [Civil Judgment] (2016) Su 0102 Minch 3076 ( (2016) 苏0102民初3076号) [Commercial Case, First Instance, No. 3076].

  50. Zhonghua Renmin Gongheguo Zuigao Renmin Fayuan Gongbao (中华人民共和国最高人民法院公报) [the Supreme Peoples’ Court’s Gazette] 183 qi (183期) [Issue 183].

  51. The first tier financial centres including New York, London, Hongkong and Singapore are all common law jurisdictions, in which judge-made laws make up a considerable part of the rules governing the financial markets. See The Global Financial Centres Index 24 (2018), https://www.longfinance.net/media/documents/GFCI_24_final_Report.pdf.

  52. Posner (1973); Merryman (1985).

  53. La Porta et al. (1998).

  54. Coffee (2001).

  55. Chenguang (2006), pp 524–549.

  56. China Insolvency Law (2014).

  57. Shenzhen Qianhai Hezuoqu Renmin Fayuan (深圳前海合作区人民法院) [People’s Court of Shenzhen City, Qianhai Municipality] Minshi Panjue Shu (民事判决书) [Civil Judgment] (2016) Ao 0102 Minch 380((2016) 粤0391民初380号) [Commercial Case, First Instance, No. 380].

  58. Zhonghua Renmin Gongheguo Zhenquan Fa (中华人民共和国证券法) [Securities Law of the People’s Republic of China], first promulgated by the Standing Committee of the National People’s Conference on 29 December 1998. The law underwent major amendments in 2005 and 2019, and relatively minor changes in 2004, 2013 and 2014. The 2019 amendment will take effect from 1 March 2020. Hence it is customarily abbreviated as the 2005 Securities Law. See Art. 2: The present Law shall apply to the issuance and trading of stocks, corporate bonds as well as any other securities as lawfully recognized by the State Council within the territory of the People’s Republic of China.

  59. SEC v. Howey Co., 328 US 293 (1946).

  60. Beijingshi Xichengqu Renmin Fayuan (北京市西城区人民法院) [People’s Court of Xicheng District, Beijing Municipality], Minshi Panjue Shu (民事判决书) [Civil Judgment] (2016) Jing 0102 Minchu 32738 (京0102民初32738号) [Civil case, First Instance, No. 32738].

  61. Guiyangshi Zhongji Renmin Fayuan (贵阳市中级人民法院) [Intermediate People’s Court of Guiyang Municipality], Minshi Panjue Shu (民事判决书) [Civil Judgment] (2018) Qian 01 Minchu 367 (黔01民初367号) [Civil case, First Instance, No. 367].

  62. Wulanchabushi Zhongji Renmin Fayuan (乌兰察布市中级人民法院) [Intermediate People’s Court of Wulanchabu Municipality], Minshi Panjue Shu (民事判决书) [Civil Judgment] (2009) Wumin Chuzi 25 (乌民初字第25号) [Civil case, First Instance, No. 25].

  63. Zuigao Renmin Fayuan Guanyu Jiaqiang Sifa Jianyi Gongzuo de Yijian de Tongzhi (最高人民法院关于加强司法建议工作的意见的通知) [Notice of the Supreme People’s Court of China on the Opinion of Enhancing Judicial Construction] issued by the Supreme People’s Court on 15 March 2012.

  64. One noteworthy example is that in a competition called ‘National Judicial Suggestions’ organised by the Supreme People’s Court in 2012. The Intermediate People’s Court of Yancheng in Jiangsu Province was rewarded for being one of the top ten suggestions with its article ‘Judicial Suggestions on Resolving Financial Operation Risks and Optimising City-wide Financial Environment’. The reason for its award was that ‘it is imperative to enhance city-wide financial security activities; it is significantly important to maintain financial order and security; the Intermediate People’s Court of Yancheng targets resolving financial risks and proposes judicial suggestions to the municipal party committee and the municipal government’. As such, the reference to ‘financial security’ in the judicial suggestions promotes and justifies the ‘matching’ of the exercise of judicial power and the national governance in a broad sense. See China Court (2013).

  65. China Court (2018).

  66. As to judicial economy, it is the efficient management of litigation so as to minimize the duplication of effort. It also avoids wasting the judiciary’s time and resources. For example, a court may consolidate two cases for trial to save the court and parties from having two trials. It may also order a separate trial on certain issues for the purpose of avoiding a later trial that would be more complex and time consuming. The promotion of judicial economy is the primary reason that interlocutory review is not favoured. Butorac v. Fuddruckers Inc., 1988 US Dist. LEXIS 11144 (D. Kan. Sept. 22, 1988).

  67. See example in Zhong shuijing yu Hunan Jiufeng Guoji Shangpin Xianhuo Jiaoyi Shichang Youxian Gongsi Weituo Licai Hetong Jiufeng (张水金与湖南久丰国际商品现货交易市场有限公司委托理财合同纠纷案) [Zhang Shui Jiang and Hunan Jiufeng International Goods Trade Ltd Wealth Management Contract Dispute] Zhejiang Anji Renmin Fayuan (浙江省安吉县人民法院) [People’s Court of Zhejiang Province, Anji Municipality] Minshi Panjue Shu (民事判决书) [Civil Judgment] (2017) Zhe 0523 Minch 5902 [Commercial Case, First Instance, No. 5902].

  68. Zuigao Renmin Fayuan (最高人民法院) [Supreme People’s Court of China], Minshi Caiding Shu (民事裁定书) [Civil Order] (2014) Zuigaofa Minshen 4790 (最高法民申4790号) [Civil case, Appeal Instance, No. 4790].

  69. Shanghaishi Minhangqu Renmin Fayuan (上海市闵行区人民法院) [People’s Court of Minhang District, Shanghai Municipality], Minshi Panjue Shu (民事判决书) [Civil Judgment] (2011) Minminwu (Min) Chuzi 905 (闵民五(民)初字第905号) [Civil case, First Instance, No. 905].

  70. Zhuigao Renmin Fayuan Guanyu Yifa Pingdeng Baohu Feigongyouzhi Jingji Chujing Feigongyouzhi Jingji Jiankang Fazhang de Yijian (最高人民法院关于依法平等保护非公有制经济促进非公有制经济健康发展的意见) [Guidelines on the Equal Protection of Non-state Property Rights and Encouraging the Development of the Non-state Economic Sector].

  71. Xinhua Net (2019).

  72. Guowuyuan Guanyu 2017 Nian Jinrong Qiye Guoyou Zichan de Zhuangxiang Baogao (国务院关于2017年度金融企业国有资产的专项报告).

  73. Guanyu Wanshan Guoyou Jinrong Ziben Guanli de Zhidao Yijian (关于完善国有金融资本管理的指导意见) [Guidelines on the Management of State-owned Capital].

  74. Chinese Academy of Social Sciences (2016), pp 35–41.

  75. Zhao (2002), p 12.

  76. Gansusheng Gaoji Renmin Fayuan (甘肃省高级人民法院) [High People’s Court of Gansu Province], Minshi Panjue Shu (民事判决书) [Civil Judgment] (2009) Ganmin Zaizhongzi 4 (甘民再终字第4号) [Civil case, Appeal Instance, No. 4].

  77. Zuigao Renmin Fayuan Guanyu Renmin Fayuan Wei Qiye Jianbingchongzu Tigong Sifa Baozhang de Zhidaoyijian (最高人民法院关于人民法院为企业兼并重组提供司法保障的指导意见) [Guidelines on Courts Providing a Legal Avenue for Corporate Mergers and Acquisitions].

  78. Zuigao Renmin Fayuan (最高人民法院) [Supreme People’s Court], Minshi Panjue Shu (民事判决书) [Civil Judgment] (2009) Mintizi 129 (民提字第125号) [Civil case, Appeal Instance, No. 125].

  79. Qinghaisheng Gaoji Renmin Fayuan (青海省高级人民法院) [High People’s Court of Qinghai Province], Minshi Panjue Shu (民事判决书) [Civil Judgment] (2010) Qing Miner Zhongzi 6 (青民二终字第6号) [Civil case, Final Instance, No. 6].

  80. According to Art. 92 of the Civil Procedure Law, a public notice is only applicable where the whereabouts of the person to be served is unknown or the service of process is not possible by other means as set out in the law. In this case, the debtor’s whereabouts was known. See Zhonghua Renmin Gongheguo Minshi Susong Fa (中华人民共和国民事诉讼法) [Civil Procedure Law of the People’s Republic of China], first promulgated by the Standing Committee of the National People’s Congress on 9 April 1991.

  81. Yibinshi Zhongji Renmin Fayuan (宜宾市中级人民发现) [Intermediate People’s Court of Yibin Municipality], Minshi Panjue Shu (民事判决书) [Civil Judgment] (2018) Chuan 15 Minzhong 323 Hao (川15民终323号) [Civil case, Final Instance, No. 323].

  82. Guowuyuan Bangongting Zhuanfa Renmin Yinhang, Caizhengbu, Zhengjianhui Guanyu Zujian Zhongguo Xinda Zichan Guanli Gongsi Yijian de Tongzhi (国务院办公厅转发人民银行、财政部、证监会关于组建中国信达资产管理公司意见的通知) [Notice of the General Office of the State Council Forwarding the Opinion of the People’s Bank of China, Ministry of Finance, China Securities Regulatory Commission on Establishing China Cinda Asset Management Co., Ltd. (People’s Republic of China) State Council], issued by the State Council on 21 July 1999.

    See also, Guowuyuan Bangongting Zhuanfa Renmin Yinhang, Caizhengbu, Zhengjianhui Guanyu Zujian Huarong Zichan Guanli Gongsi, Zhongguo Changcheng Zichan Guanli Gongsi he Zhongguo Dongfang Zichan Guanli Gongsi Yijian de Tongzhi (国务院办公厅转发人民银行、财政部、证监会关于组建中国华融资产管理公司、中国长城资产管理公司和中国东方资产管理公司意见的通知) [Notice of the General Office of the State Council Forwarding the Opinion of the People’s Bank of China, Ministry of Finance, China Securities Regulatory Commission on Establishing China Huarong Asset Management Co., Ltd., China Greatwall Asset Management Co., Ltd. and China Orient Asset Management Co., Ltd], issued by the State Council on 21 July 1999.

  83. These rules include: Guanyu Shenli Sheji Jinrong Zichan Guanli Gongsi Shougou, Guanli, Chuzhi Guoyou Yinhang Buliang Daikuan Xingcheng de Zichan de Anjian Shiyong Falv Ruogan Wenti de Guiding (关于审理涉及金融资产管理公司收购、管理、处置国有银行不良贷款形成的资产的案件适用法律若干问题的规定) [Rules of the Supreme People’s Court of China on the Application of Law in Hearing Cases Relating to Assets from the Financial Asset Management Companies’ Acquiring, Managing and Disposing of State-owned Banks’ Non-performing Loans], issued by the Supreme People’s Court on 3 April 2001.

    See also, Guanyu Guoyou Jinrong Zichan Guanli Gongsi Chuzhi Guoyou Shangye Yinhang Buliang Zichan Anjian Jiaona Susong Feiyong de Tongzhi (关于国有金融资产管理公司处置国有商业银行不良资产案件交纳诉讼费用的通知) [Notice of the Supreme People’s Court of China on Litigation Payment in Cases of State-owned Financial Asset Management Companies Disposing of State-owned Banks’ Non-performing Loans], issued by the Supreme People’s Court on 25 October 2001.

    See also, Dui <Guanyu Guanche Zhixing Zuigao Renmin Fayuan ‘Shier Tiao’ Sifa Jieshi Youguan Wenti de Han> de Dafu (对<关于贯彻执行最高人民法院’十二条’司法解释有关问题的函>的答复) [Reply of the Supreme People’s Court of China to <Letter on Relevant Questions Regarding Carrying out the Supreme People’s Court of China’s ‘Twelve Provisions’ Judicial Explanation>], issued by the Supreme People’s Court on 7 January 2002.

    See also, Guanyu Jinrong Zichan Guanli Gongsi Shougou, Chuzhi Yinhang Buliang Zichan Youguan Wenti de Buchong Tongzhi (关于金融资产管理公司收购、处置银行不良资产有关问题的补充通知) [Supplementary Notice of the Supreme People’s Court on the Purchase and Disposal of Non-performing Assets by Financial Asset Management Companies], issued by the Supreme People’s Court on 30 May 2005.

    See also, Guanyu Yanchang Guoyou Jinrong Zichan Guanli Gongsi Chuli Guoyou Shangye Yinhang Buliang Zichan Anjian Jianban Jiaona Susong Feiyong Qixian de Tongzhi (关于延长国有金融资产管理公司处理国有商业银行不良资产案件减半缴纳诉讼费用期限的通知) [Notice of the Supreme People’s Court on Extending the Period of the Waiver of Court Costs by 50% for Cases Involving the Disposal of Distressed Assets of State-Owned Commercial Banks by State-Owned Financial Assets Management Companies], issued by the Supreme People’s Court on 13 April 2006.

  84. Li (2002).

  85. Guanyu Shenli Sheji Jinrong Zichan Guanli Gongsi Shougou, Guanli, Chuzhi Guoyou Yinhang Buliang Daikuan Xingcheng de Zichan de Anjian Shiyong Falv Ruogan Wenti de Guiding (关于审理涉及金融资产管理公司收购、管理、处置国有银行不良贷款形成的资产的案件适用法律若干问题的规定) [Rules of the Supreme People’s Court of China on the Application of Law in Hearing Cases Relating to Assets from the Financial Asset Management Companies’ Acquiring, Managing and Disposing of State-owned Banks’ Non-performing Loans], issued by Supreme People’s Court on 3 April 2001.

  86. Guanyu Shenli Sheji Jinrong Buliang Zhaiquan Zhuanrang Anjian Gongzuo Zuotanhui Jiyao (关于审理涉及金融不良债权转让案件工作座谈会纪要) [Notice of the Supreme People’s Court on Issuing the Summary of Minutes of the Symposium on Hearing Cases on the Assignment of Distressed Claims Involving Financial Institutions], issued by the Supreme People’s Court on 30 March 2009.

  87. Beijingshi Dier Zhongji Renmin Fayuan (北京市第二中级人民法院) [Second Intermediate People’s Court of Beijing], Minshi Caiding Shu (民事裁定书) [Civil Order] (2015) Erzhong Min (Shang) Zhongzi 05792 (二中民 (商) 终字第05792号) [Civil case, Final Instance, No. 05792].

  88. The Supreme People’s Court explained the policy considerations underpinning such treatment ‘to best protect state-owned financial property, to reduce and dispose of non-performing loans of state-owned commercial banks and to ensure the competitiveness and repayment capacity of state-owned commercial banks, the CCP and the State Council had implemented strategies to strip and dispose of non-performing loans. From 1999 to the second half of 2008, the big four banks had stripped non-performing loans (NPLs) of the astonishing amount of up to more than RMB 2 trillion. All levels of the judiciary shall follow the Supreme People’s Court’s Rules of 2001 on Adjudicating cases involving financial asset management companies purchasing, managing and disposing of the NPLs of the state-owned banks and other relevant rules, and to provide protection for national financial assets (credit rights). These rules include: Guanyu Shenli Sheji Jinrong Zichan Guanli Gongsi Shougou, Guanli, Chuzhi Guoyou Yinhang Buliang Daikuan Xingcheng de Zichan de Anjian Shiyong Falv Ruogan Wenti de Guiding (关于审理涉及金融资产管理公司收购、管理、处置国有银行不良贷款形成的资产的案件适用法律若干问题的规定) [Rules of the Supreme People’s Court of China on the Application of Law in Hearing Cases Relating to Assets from the Financial Asset Management Companies’ Acquiring, Managing and Disposing of State-owned Banks’ Non-performing Loans], issued by the Supreme People’s Court on 3 April 2001.

    See also, Guanyu Guoyou Jinrong Zichan Guanli Gongsi Chuzhi Guoyou Shangye Yinhang Buliang Zichan Anjian Jiaona Susong Feiyong de Tongzhi (关于国有金融资产管理公司处置国有商业银行不良资产案件交纳诉讼费用的通知) [Notice of the Supreme People’s Court of China on Litigation Payments in Cases of State- owned Financial Asset Management Companies Disposing of State-owned Bank Non-performing Loans], issued by the Supreme People’s Court on 25 October 2001.

    See also, Dui <Guanyu Guanche Zhixing Zuigao Renmin Fayuan ‘Shier Tiao’ Sifa Jieshi Youguan Wenti de Han> de Dafu (对<关于贯彻执行最高人民法院’十二条’司法解释有关问题的函>的答复) [Reply of the Supreme People’s Court of China to <Letter on Relevant Questions Regarding Carrying out the Supreme People’s Court of China’s ‘Twelve Provisions’ Judicial Explanation>], issued by the Supreme People’s Court on 7 January 2002.

    See also, Guanyu Jinrong Zichan Guanli Gongsi Shougou, Chuzhi Yinhang Buliang Zichan Youguan Wenti de Buchong Tongzhi (关于金融资产管理公司收购、处置银行不良资产有关问题的补充通知) [Supplementary Notice of the Supreme People’s Court on the Purchase and Disposal of Non-performing Assets by Financial Asset Management Companies], issued by the Supreme People’s Court on 30 May 2005.

    See also, Guanyu Yanchang Guoyou Jinrong Zichan Guanli Gongsi Chuli Guoyou Shangye Yinhang Buliang Zichan Anjian Jianban Jiaona Susong Feiyong Qixian de Tongzhi (关于延长国有金融资产管理公司处理国有商业银行不良资产案件减半缴纳诉讼费用期限的通知) [Notice of the Supreme People’s Court on Extending the Period of the Waiver of Court Costs by 50% for Cases Involving the Disposal of Distressed Assets of State-Owned Commercial Banks by State-Owned Financial Assets Management Companies], issued by the Supreme People’s Court on 13 April 2006.

    At the same time, within the boundaries of the law and judicial interpretation, the courts shall protect, to the best of their ability, national financial assets (creditor rights) concerning matters such as the validity of contracts and statutory limitation periods—See Zuigao Renmin Fayuan Yinfa <Guanyu wei Weihu Guojia Jinrong Anquan he Jingji Quanmian Xietiao Kechixu Fazhan Tigong Sifa Baozhang he Falv Fuwu de Ruogan Yijian> de Tongzhi (最高人民法院印发《关于为维护国家金融安全和经济全面协调可持续发展提供司法保障和法律服务的若干意见》的通知) [Notice of the Supreme People's Court on Issuing Several Opinions on Providing Judicial Guarantees and Legal Services for the Maintenance of National Financial Security and Comprehensive, Coordinated and Sustainable Economic Development], issued by the Supreme People’s Court on 3 December 2008.

  89. Wu (2009).

  90. Public policy could be interpreted broadly including the law, regulations, rules etc. See Kilpatrick (2000).

  91. Zuigao Renmin Fayuan Fuyuanzhang Xi Xiaoming Zai Renmin Fayuan Yingdui Jinrongweiji Shangshi Shengpan Gongzuo Zuotanhuishang de Jianghua-Jijiyingdui, Gongkeshixian, Weiweihui Guojia Jinrong Anquan he Jingji Pingweng Jiaokuai Fazhan Tigong Youli Sifa Baozhang (最高人民法院副院长奚晓明在人民法院应对金融危机商事审判工作座谈会上的讲话--积极应对, 共克时艰, 为维护国家金融安全和经济平稳较快发展提供有力司法保障).

  92. ZuiGao Renmin Fayuan (最高人民法院) [Supreme People’s Court], Minshi Caiding Shu (民事裁定书) [Civil Order] (2017) (最高法民申2454号) [Civil Case, Final Instance, No. 2454].

  93. Jiangsu Province Gaoji Renmin Fayuan (江苏省高级人民法院) [High Court of Jiangsu Province], Minshi Caiding Shu (民事裁定书) [Civil Order] (2015) Sushangzongzidi ( (2015) 苏商终字第00542号) [Civil Case, Final Instance, No. 00542].

  94. Zhongguo Yijianhui Nongcun Zhongxiao Jinrong Jigou Xingzhengxuke Shixiang Shishi Banfa he Shangye Yinghang Gongsi Zhili Zhiying (中国银监会农村中小金融机构行政许可事项实施办法) 和(商业银行公司治理指引) [Rural Medium and Small Financial Institutions Administrative Licencing Rules and Guidelines on the Corporate Governance of Commercial Banks].

  95. Piaoju Fa (票据法) [Law on Negotiable Instruments].

  96. Among the examples, there are three decisions that have resorted to this line of reasoning. They are: Zuigao Renmin Fayuan (最高人民法院) [Supreme People’s Court], Minshi Panjue Shu (民事判决书) [Civil Judgment] (2016) Zuigaofa Minzai 66 (最高法民再66号) [Civil case, Appeal Instance, No. 66].

    See also, Zuigao Renmin Fayuan (最高人民法院) [Supreme People’s Court], Minshi Panjue Shu (民事判决书) [Civil Judgment] (2016) Zuigaofa Minzai 68 (最高法民再68号) [Civil case, Appeal Instance, No. 68].

    See also, Zuigao Renmin Fayuan (最高人民法院) [Supreme People’s Court], Minshi Panjue Shu (民事判决书) [Civil Judgment] (2017) Zuigaofa Minzai 116 (最高法民再116号) [Civil case, Appeal Instance, No. 116].

  97. Hunan Changsha Zhongji Renmin Fayuan (湖南省长沙市中级人民法院) [Hunan Province Changsha City Intermediate Court] Minshi Panjue Shu (民事判决书) [Civil Judgment] (2014) Changzhong minchu 00890(2014) 长中民二初字第00890号 [Civil Case, Second Instance, No. 00890].

  98. Guangdong Sheng Gaoji Renmin Fayuan (广东省高级人民法院) [Guangdong Province People’s High Court] Minshi Panjue Shu (民事判决书) [Civil Judgment] (2010) Changzhong minchu 00890 (2010) [Civil Case, Second Instance, No. 114].

  99. For example, the courts in Shanghai have adopted the view of encouraging financial innovation. A senior judge and the Chief Judge of the financial division at the High People’s Court of Shanghai stated that ‘financial innovation is something that the courts should encourage. On occasions when financial innovation and the interests of financial consumers come into conflict, we need to achieve a balancing act. We need to consider how to encourage financial innovation’. See Lujiazui Forum (2013).

    However, such judicial opinions are subject to change. In recent years, strict regulation and risk avoidance have featured more dominantly in judicial documents. For example, the High People’s Court in Shanghai stated that ‘disputes involving financial innovative products must be adjudicated cautiously […] including financial innovative trading methods that are non-compliant with regulatory rules and the spirit thereof, and financial transactions that, under the disguise of financial innovation, understate financial risks, evade financial regulation’. See Shanghaishi Gaoji Renmin Fayuan Guanyu Luoshi Jinrong Fengxian Fangfan Gongzuo de Shishi Yijian (上海市高级人民法院关于落实金融风险防范工作的实施意见) [Implementation Opinions of the Higher People’s Court of Shanghai on the Implementing the Prevention of Financial Risks], issued by the High People’s Court of Shanghai on 25 June 2018.

  100. Lu (2006) p 107.

  101. This is in contrast to the roles of the courts in the US where the courts see their role as an interpreter of legislation, and are not willing to act as a super-legislature to weigh the wisdom of legislation, see Ferguson v. Skrupa, 372 US 726 (1963).

  102. In the US, only the Supreme Court has a role to play in national policy making. See Casper (1976), pp 50-63. And also quoting Oliver Wendell Holmes, Jr. in Ferguson v. Skrupa, 372 US 726, 731-732 (1963) that ‘we emphatically refuse to go back to the time when courts used the Due Process Clause “to strike down state laws, regulatory of business and industrial conditions, because they may be unwise, improvident, or out of harmony with a particular school of thought” […] [n]or are we able or willing to draw lines by calling a law “prohibitory” or “regulatory”. Whether the legislature takes for its textbook Adam Smith, Herbert Spencer, Lord Keynes, or some other is no concern of ours’. By contrast, the courts at all levels in China implement the government’s policy.

  103. Bowden (2005), p 49.

  104. Bowden (2005), p 51.

References

  • Ai J (2008) Zhongguo Faguan Zuidahua Shenme (中国法官最大化什么) [What China’s judges should maximise]. Falv he Shehui Kexue (法律和社会科学) [Law and Social Science] 2008(3):98–151

  • Borghard E (2018) Protecting financial institutions against cyber threats: a national security issue. Working Paper, Carnegie Endowment for International Peace

  • Bowden H (2005) Classical Athens and the Delphic Oracle: divination and democracy. Cambridge University Press, Cambridge

    Google Scholar 

  • Casper JD (1976) The Supreme Court and national policy making. Am Political Sci Rev 70(1):50–63

    Article  Google Scholar 

  • Chenguang W (2006) Law-making functions of the Chinese courts: judicial activism in a country of rapid social changes. Front Law China 1(4):524–549

    Article  Google Scholar 

  • China Court (2013) Yancheng: Yize Sifa Jianyi Yinqi Quanshi Jinrong Zhixu Guifan (盐城: 一则司法建议引发全市金融秩序规范) [Yancheng: judicial advice triggered city-wide normative financial order]. http://rmfyb.chinacourt.org/paper/images/2013-03/08/04/2013030804_pdf.pdf. Accessed 20 Feb 2020

  • China Court (2018) Sifa Jianyishu (最高人民法院司法建议书) [People’s Supreme Court of China, Judicial recommendations]. https://www.chinacourt.org/article/detail/2018/03/id/3249187.shtml. Accessed 23 July 2019

  • China Court (2019) Jianchi Dang dui Renmin Fayuan Gongzuo de Juedui Lingdao (坚持党对人民法院工作的绝对领导) [Adhering to the CCP’s leadership of the People’s Courts]. https://www.chinacourt.org/article/detail/2019/02/id/3736207.shtml. Accessed 13 Aug 2019

  • China Insolvency Law (2014) Zuigao Renmin Fayuan Fuyuanzhang Xi Xiaoming zai Quanguo Bufen Zhonggaoji Renmin Fayuan Shenli Zhengquan Gongsi Pochan Anjian Zuotanhui shang de Jianghua—Jiexuan (最高人民法院副院长奚晓明在全国部分中、高级人民法院审理证券公司破产案件座谈会上的讲话-节选) [Excerpts from the Speech by Xi Xiaoming, the Vice President of the Supreme People’s Court, at the Securities Firm Insolvency Forum with attendees from some nationwide intermediate and High People’s Courts nationwide]. http://syclaw.sjtu.edu.cn/pochan/show.aspx?info_lb=766&flag=753&info_id=155. Accessed 20 Feb 2020

  • China News (2014) Zhouqiang: Yao Ganyu Xiang Xifang Cuowu Sichao Liangjian (周强: 要敢于向西方错误思潮亮剑) [Zhou Qiang: We should have the courage to show the sword to Western erroneous notions]. http://www.chinanews.com/gn/2017/01-14/8124300.shtml. Accessed 20 Feb 2020

  • Chinese Academy of Social Sciences (2016) Zhongguo Shehui Kexueyuan ‘Pushi Jiezhi’ Lun Pipan Wenxuan (中国社会科学院’普世价值’论批判文选) [Critical digest of ‘universal value’ by the Chinese Academy of Social Sciences]. Zhongguo Shehui Kexue Chubanshe (中国社会科学出版社) [Chinese Academy of Social Sciences Press] 6:35-41

  • Coffee JC Jr (2001) The rise of dispersed ownership: the roles of law and the state in the separation of ownership and control. Yale Law J 111(1):1–82

    Article  Google Scholar 

  • Court.gov.cn (2016) Zuigao Renmin Fayuan Guanyu Shenhua Sifa Gongkai, Cujin Sifa Gongzheng Qingkuang de Baogao (最高人民法院关于深化司法公开、促进司法公正情况的报告) [Report of the Supreme People’s Court on extending judicial publicity and promoting judicial fairness]. http://www.court.gov.cn/zixun-xiangqing-30161.html. Accessed 20 Feb 2020

  • Deckert SK, Vikers CH (2011) An introduction to sociolinguistics: society and identity. Bloomsbury, New York

    Google Scholar 

  • Guo S (2018) Sifa Wenjian de Zhongguo Tese yu Shijian Kaocha (司法文件的中国特色与实践考察) [The Chinese characteristics and a practical review of judicial documents]. Huanqiu Falv Pinglun (环球法律评论) [Global Law Review] 4:170-192

  • He W (2018) The regulation of securities markets in China. Palgrave Macmillian, New York

    Book  Google Scholar 

  • Huang T (2012) Zuigao Renmin Fayuan de Sifa Wenjian: Xianzhuang, Wenti yu Qianjing (最高人民法院的司法文件: 现状、问题与前景) [Judicial documents from the Supreme People’s Court: current status, problems and prospects]. Faxue Luntan (法学论坛) [Legal Forum] 4:124–129

  • Ji W (2006) Zuigao Renmin Fayuan de Juese Jiqi Yanhua (最高人民法院的角色及其演化) [Role of the Supreme People’s Court and its adaptation]. Qinghua Faxue (清华法学) [Tsinghua University Law Journal] 1:4–20

  • Kilpatrick DG (2000) Definitions of public policy and the law. https://mainweb-v.musc.edu/vawprevention/policy/definition.shtml. Accessed 20 Feb 2020

  • Kuester J (2013) Transnational influences on financial crime. Natl Secur Armed Confl Law Rev 4:71–79

    Google Scholar 

  • La Porta R, Lopez-de-Silanes F, Shleifer A, Vishny RW (1998) Law and finance. J Polit Econ 106(6):1113–1155

    Article  Google Scholar 

  • Li G (2002) Renqing Xingshi, Tigao Renshi, Nuli Shijian Gongzheng yu Xiaolv Shiji Zhuti, Kaituo Minshangshi Shenpan Gongzuo Xinjumian—Zai Quanguo Fayuan Minshangshi Shenpan Gongzuo Huiyi de Jianghua (认清形势 提高认识 努力实践公正与效率世纪主题 开拓民商事审判工作新局面—在全国法院民商事审判工作会议上的讲话) [Understanding the situation, improving recognition, hardly practising the century-old theme of fairness and efficiency, exploring the new situation of civil and business justice—speech at the National Working Conference of Civil Courts and Business Justice]. Renmin Fayuan Chubanshe (人民法院出版社) People’s Court Press, Beijing

  • Lu L (2006) Lun Zuigao Fayuan zai Hongguan Tiaokong zhong de Juese Dingwei (论最高法院在宏观调控中的角色定位) [Role and position of the Supreme People’s Court in macro-control]. Xiandai Faxue (现代法学) [Modern Law Science] 6:107–121

  • Lujiazui Forum (2013) Shanghaishi Gaoji Renmin Fayuan Jinrong Shenpanting Tingzhang, Gaoji Faguan Yanglu Fayan Shilu (上海市高级人民法院金融审判庭庭长、高级法官杨路发言实录) [Speech given by Yang Lu, Senior Judge and the Chief Judge of the Financial Division at High People’s Court of Shanghai, 2013 Lujiazui Forum Series]. http://sh.eastday.com/m/2013ljz/u1a7487288.html. Accessed 20 Feb 2020

  • Malkawi BH (2011) Balancing open investment with national security: review of US and UAE laws with DP World as a case study. Univ Notre Dame Austr Law Rev 13:153–192

    Google Scholar 

  • Mattila H (2006) Comparative legal linguistics. Ashgate, Aldershot

    Google Scholar 

  • Merryman H (1985) The civil law tradition: an introduction to the legal systems of Western Europe and Latin America. Stanford University Press, Stanford

    Google Scholar 

  • OpenLaw (2016) Dashuju Jiedu 2014 Nian Zhongguo Caipan Wenshu Gongkai (大数据解读2014年中国裁判文书公开) [Using big data to analyse the publicity of judgments in China in 2014]. http://openlaw.cn/research/15253c218332830dca02eb150d800870. Accessed 20 Feb 2020

  • People.com.cn (2013) Mengjianzhu Tongzhi Jianli (孟建柱同志简历) [Brief biography of Meng Jianzhu]. http://cpc.people.com.cn/n/2012/1115/c351757-19594462.html. Accessed 20 Feb 2020

  • People.com.cn (2019) Xi Jinping: Quanmian Shenru Zuohao Xinshidai Zhengfa Gexiang Gongzuo, Cujin Shehui Gongping Zhengyi Baozhang Renmin Anju Leye (习近平: 全面深入做好新时代政法各项工作 促进社会公平正义保障人民安居乐业) [Xi Jinping: Comprehensively and profoundly ensuring political and legal work, promoting societal fairness and justice and guaranteeing that people live and work in peace]. http://cpc.people.com.cn/n1/2019/0117/c64094-30560032.html. Accessed 20 Feb 2020

  • Posner R (1973) Economic analysis of the law. Little Brown and Company, Chicago

    Google Scholar 

  • Rehman SS (2011) National security challenges and the global financial crisis. Florida Int Univ Law Rev 7:119–148

    Google Scholar 

  • Rodriguez RV (2010) Economic terror: market manifestations of terror attacks. Natl Secur Law Brief 1:129–136

    Google Scholar 

  • Sarnikar S, Johnsen DJ (2009) Cyber security in the national market system. Rutgers Bus Law J 6:1–28

    Google Scholar 

  • Sina News (2014) Xi Jinping zai G20 Fenghui Diyi Jieduan Huiyi shang de Fayan—Quanwen (习近平在G20峰会第一阶段会议上的发言—全文) [Xi Jinping’s speech at the G20 Summit first stage meeting—full text]. http://news.sina.com.cn/c/2014-11-16/153331152863.shtml. Accessed 20 Feb 2020

  • Wu X (2009) ‘Jinrong Buliang Zhaiquan Zhuanrang’ Zhun Sifa Jieshi Fuyu Difang Zhengfu Youxian Goumaiquan—Zuigaoyuan Minerting Youguan Fuzeren Huiying Gejie Zhiyi (‘金融不良债权转让’准司法解释赋予地方政府优先购买权—最高院民二庭有关负责人回应各界质疑) [The anticipated judicial interpretation of ‘Financially distressed debt assignment’ gives local government prior purchase rights—responsible person from Civil Division II of the Supreme People’s Court, Responses to Questions from the Public]. Fazhi Ribao (法制日报) [Legal Daily], 14 May 2009

  • Xinhua Net (2014) Jianchi Zongti Guojia Anquanguan, Zou Zhongguo Tese Guojia Anquan Daolu (坚持总体国家安全观 走中国特色国家安全道路) [Adhering to national security, and following national security with Chinese characteristics]. http://www.xinhuanet.com//politics/2014-04/15/c_1110253910.htm. Accessed 20 Feb 2020

  • Xinhua Net (2019) Xi Jinping Zhuchi Zhaokai Zhongyang Quanmian Yifa Zhiguo Weiyuanhui Dierci Huiyi (习近平主持召开中央全面依法治国委员会第二次会议) [Xi Jinping hosts the Second Conference of the Central Commission for Comprehensively Ruling the Country by Law]. http://www.xinhuanet.com/2019-02/25/c_1124161654.htm. Accessed 20 Feb 2020

  • Zhao F (2002) Fahui Shenpan, Zhixing Zhineng Zuoyong, Baozhang Guojia Jinrong Anquan—Fang Zuigao Renmin Fayuan Fuyuanzhang Li Guoguang (发挥审判、执行职能作用 保障国家金融安全—访最高人民法院副院长李国光) [Making use of judicial and enforcement functions and safeguarding national financial securities—interview with Li Guoguang, Vice President of the Supreme People’s Court]. Renmin Sifa (人民司法) [People’s Judicature] 8:12–15

Download references

Author information

Authors and Affiliations

  1. Research Professor, Guanghua Law School, Zhejiang University, Hangzhou, China

    Tao Huang

  2. Lecturer, Law Faculty, Monash University, Melbourne, Australia

    Weiping He

Authors
  1. Weiping He
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Tao Huang
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Tao Huang.

Additional information

Publisher's Note

Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.

Unless indicated otherwise the translations of the Chinese quotations are by the authors.

Rights and permissions

Reprints and permissions

About this article

Check for updates. Verify currency and authenticity via CrossMark

Cite this article

He, W., Huang, T. Oracle of Delphi: How China’s Judiciary Divines the Notion of ‘Financial Security’?. Eur Bus Org Law Rev 22, 317–350 (2021). https://doi.org/10.1007/s40804-021-00208-0

Download citation

  • Accepted:

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s40804-021-00208-0

Keywords

Search

Navigation