Legislation of China

Sources of law in China form a highly centralised and hierarchical framework, where higher-level normative acts hold absolute precedence over subordinate ones. Primary authority is vested in national statutes and administrative regulations, while judicial precedent in its classical common-law definition does not exist.

Furthermore, while China actively engages with international legal mechanisms, it carefully harmonises external obligations with domestic legislation, maintaining strict ultimate priority for its internal constitutional and legal norms.

High People’s Courts operate at the provincial level, including in autonomous regions and municipalities directly under the central government. They are part of the people’s court hierarchy, with the Supreme People’s Court exercising supervisory authority over their judicial work.

In corporate and civil and commercial matters, their key functions include:

• Hearing major disputes at first instance: They hear civil, commercial and administrative cases that are significant within their respective jurisdictions, subject to the applicable rules on jurisdiction.
• Hearing appeals: They consider appeals against judgments and rulings of Intermediate People’s Courts within their jurisdictions. In the ordinary two-instance system, their decisions generally conclude the appellate proceedings, subject to the statutory procedures for retrial.
• Judicial supervision and consistency: They supervise the judicial work of lower courts within their jurisdictions and help promote consistent application of legislation and relevant judicial interpretations and guidance.

Intermediate People’s Courts operate in cities at the prefecture level, prefectures and autonomous prefectures. In municipalities directly under the central government, the court structure is organised according to the relevant local arrangements.

For businesses and foreign investors, Intermediate People’s Courts are an important part of the judicial system. Their principal functions include:

• Hearing foreign-related disputes: Depending on the applicable jurisdictional rules, certain foreign-related civil and commercial cases are heard at first instance by Intermediate People’s Courts. These may involve foreign investors, international contracts or foreign capital, including disputes involving wholly foreign-owned enterprises.
• Hearing cases of greater significance: Their first-instance jurisdiction includes certain cases with significant implications within their jurisdiction, as well as cases assigned to them under the applicable rules on subject matter and monetary thresholds. Their remit may also include specified criminal cases and intellectual property disputes, where jurisdiction has not been assigned to a specialised court.
• Hearing appeals: They hear appeals against judgments and rulings of Basic People’s Courts and exercise judicial supervision over lower courts in accordance with the law.

Basic People’s Courts are courts of first instance for most ordinary civil, commercial, administrative and criminal cases. They operate at county and autonomous county level, in urban districts, county-level cities, banners and autonomous banners, as applicable.

They handle the majority of routine civil and commercial disputes, including local companies’ disputes over office leases, employment matters, smaller debt claims and ordinary disputes with suppliers.

In remote and rural areas, the law provides for the establishment of People’s Tribunals (人民法庭) as local branches of Basic People’s Courts. Their establishment depends on the needs of the relevant area, population distribution and the nature of local disputes.

People’s Tribunals do not constitute a separate level of the PRC judicial system. They form part of a Basic People’s Court and administer justice on its behalf.

China also has specialised courts. They do not form a separate level of the judicial hierarchy; rather, they are integrated into the existing system and exercise jurisdiction at the level specified by law.

The development of specialised courts reflects the increasing complexity of economic relations and the need for specialised expertise in areas such as intellectual property, finance and online transactions. These courts are intended to handle particular categories of disputes within their designated jurisdictions.

• Intellectual Property Courts (知识产权法院): Hear specified intellectual property disputes, including complex patent cases and certain cases involving trade marks, copyright and trade secrets.
• Financial Courts (金融法院): Hear designated financial disputes involving areas such as banking, insurance, securities and investment.
• Internet Courts (互联网法院): Hear specified disputes arising in the digital environment, including certain online shopping and electronic contract disputes, online infringement and disputes involving personal information or domain names. Proceedings may be conducted online in accordance with the applicable procedural rules.

China has established a multi-level intellectual property protection framework, with the China National Intellectual Property Administration (CNIPA) playing a central role. CNIPA is responsible for developing the regulatory framework, examining and registering intellectual property rights, and providing guidance on related enforcement activities. The principal legislation includes laws on patents, trade marks, copyright and protection against unfair competition.

To ensure swift dispute resolution, the judicial system operates a dedicated network of specialised intellectual property courts and 129 state-level centres for rapid IP protection. Alternative dispute resolution mechanisms, including administrative proceedings, mediation and arbitration, are also being developed. Legislation provides for multiple damages for intentional infringement and imposes stricter liability for the unlawful use of trade secrets. Particular attention is being paid to emerging areas: rules on data protection are under development, and courts are developing case law on disputes involving artificial intelligence.