Previous Studies of Compliance in the Chinese Context

Detailed studies into China’s compliance with international commitments are limited, but are beginning to emerge in various areas of international law. In the context of international economic law specifically, China has been highlighted as an interesting test case of the effectiveness of international multilateralism as it can act as a “least-likely” case to comply with (neo-) liberal institutions such as the WTO (Kent 2007, p. 2). Additionally, China’s pattern of compliance is also of interest, because it exhibits such extreme differential levels of compliance, depending on the international regime in question (Webster 2014, p. 4). Existing studies of China’s compliance have focused mainly on the areas of arms control, trade, environmental protection and human rights, as well as some broad-brush multidisciplinary analyses of China’s compliance with its international obligations more generally.

One of the earliest studies of compliance in China was an early study of China’s compliance with international treaty agreements from the 1960s which found that overall, “with respect to trade agreements, except for difficulties in connection with the Great Leap Forward and the Cultural Revolution, the PRC has enjoyed an excellent reputation for meeting its obligations” (Lee 1969, p. 119). Due to China’s lack of diplomatic recognition at this time, trade agreements were concluded at the Associational level, for example, between the Canadian Wheat Board and the China Resources Corporation regarding grain imports and exports. Lee (1969, p. 119) concluded that “the consensus appears to be that, while negotiation with Peking is not always an easy matter, once an unambiguous agreement is reached, compliance likely will follow.” Applying this finding to China’s compliance with WTO obligations, it must not be forgotten that China actively negotiated the trade agreements of the

1960s and furthermore, these agreements were bilateral. Conversely, China’s commitment to the WTO, specifically in the field of IP protection was based on a multilateral agreement (the TRIPS Agreement), the terms of which had already been fully negotiated prior to China’s entry. It is therefore conceivable that any problems that China experiences in fully complying with the TRIPS Agreement may be created by the nature of accession to the WTO on “take it or leave it” basis.

In terms of more recent multidisciplinary studies of China’s engagement with international legal regimes in the reform era, Feinerman (1995) was unable to find a unifying pattern of compliance spanning the disciplines. Just over a decade later, Potter (2007) used the concept of “selective adaptation” to explain China’s compliance (or otherwise) with a variety of international legal regimes. By suggesting that China was acting in pursuit of its own national interest through actively selecting which norms to comply with, this analysis adhered to a realist approach. A more explicitly realist approach was also taken by Kim (1994, p. 419) who described China’s engagement with the international legal order as following a “maxi/mini principle.” In other words, China was said to be seeking the maximum benefits in terms of technical assistance and trade benefits and linkages but making minimal concessions in terms of reforming domestic laws and institutions.

In another multidisciplinary study of China’s interactions with global legal institutions, Kent (2007, pp. 26-7) proposed five levels of international and domestic compliance, which could also be applied to China’s compliance with its IP commitments: first, accession to treaties or agreements; second, procedural compliance with reporting and other requirements; third, substantive compliance; fourth, de jure compliance—the implementation of international norms in domestic legislative provisions; and finally, de facto compliance or compliance at the level of domestic practice, which can also be further divided into political and social implementation. The first three levels represent international compliance and could also be considered as “superficial” compliance as the norms embodied in the international accord are not necessarily accepted and absorbed. The final two levels of compliance in this model represent domestic compliance and could also be considered as “deep” compliance, as the norms are thus internalised into domestic practice. Thus, this model or “spectrum” of compliance is useful for further considering compliance which falls short of full compliance; problems with compliance can be identified at a specific level of acceptance. This model also reflects the distinction in compliance theory between implementation, compliance and effectiveness. Kent (2007, p. 3) also distinguishes between compliance and cooperation as a more comprehensive test of the internalisation of international norms, further underlining the need to look beyond the formal legal rules to obtain a fuller, richer picture of compliance.

China’s pattern of entry into and implementation of international accords has also been studied in the context of single disciplines such as compliance with international environmental agreements. Oksenberg and Economy

(1998, p. 356) found that China acceded to international accords only after careful consideration of the costs, benefits and responsibilities involved. This corresponds with the impression given from the historical research on China’s compliance with international agreements discussed above: that China takes a long time to commit to an international accord, but once it has committed, then compliance should follow as China has already weighed up the costs and benefits of the agreement. This study of China’s implementation of and compliance with environmental accords also found several factors which determine the success of implementation. These ranged from the status of the implementing agency and the level of support from high-level political leaders, to the visible nature of the agreement and whether the requirements “are congruent and converge with the path China was pursuing prior to signing the agreement” (Oksenberg and Economy 1998, p. 358). However, in terms of codification of these environmental agreements, Oksenberg and Economy (1998, p. 392) also found that China was often ahead of the necessary timescale for commitments and the real problem lay in the enforcement of these domestic laws and regulations.

China’s arms control compliance has also been analysed. Frieman’s study of China’s compliance with international arms control agreements set up a framework of costs and benefits to understand how China responds to different arms control regimes (Frieman 2004, p. 149). The potential costs Frieman identified include: provision of data, prevention and limitation of exports, refraining from testing or use, making legal commitments, making verifiable commitments, submitting to inspection or other international verification and setting up monitoring stations. The potential benefits include enhanced security, economic or financial gain, avoidance of censure, access to new technology or new information and the ability to shape the international regime and gain prestige (Frieman 2004, p. 149). Many of these costs and benefits such as the desire to access the latest technology also apply to compliance with international IP commitments. However, Frieman’s main conclusion was that “despite the absence of compelling tangible benefits, China has been willing to bear substantial costs” (Frieman 2004, p. 171). China has been willing to pay substantial costs for only marginal benefits because the international arms control regime is seen as inevitable and thus, China would rather play a role in shaping the future regime from the inside. This desire to be able to influence the system could also apply to China’s implementation of the obligations associated with the TRIPS Agreement. Johnston (1996) also considered China’s compliance in the context of arms control regimes and concluded that there was a clear distinction between learning and adaptation, with the former a result of constructivist interactions with the regime in question and the latter a realist position that true adaptation only takes place once it is matches China’s national interest. On the other hand, Angelova (1999, p. 449) cautions against the application of the managerial theory of compliance to China’s interactions with the missile technology control regime as she argues that Chinese compliance was ultimately only forthcoming through the use of coercive sanctions.

Compliance theory has also been directly applied to the protection of IP in China. One study which focuses more specifically on China’s compliance with international IP norms is Carter’s study of trademark enforcement in China in the 1990s. Carter’s model of trademark enforcement is based on “four factors, inherent in the Chinese brand of Socialist legality, [that] could prevent the Western-style trademark law from gaining the acceptance of people in the PRC” (Carter 1996, pp. 41-2) and five factors inherent in Chinese culture which operate against the acceptance of trademark law. The four factors inherent to the Chinese legal system are: firstly, “as a rule, PRC laws and regulations are enacted to achieve specific, immediate policy objectives”, but these objectives may be the appeasement of international pressure, rather than the effective protection of IP; secondly, “some PRC laws remain secret” and this lack of transparency does not allow for widespread public familiarity with the law which would be the first step to acceptance of the law as legitimate; thirdly, “many PRC laws are intentionally vague in order that policy-makers and implementing officers may have flexibility in interpretation.” This vagueness can also operate against the acceptance of the law as legitimate. The fourth and final characteristic of the Chinese legal system that Carter (1996) identifies is that “many PRC laws are programmatic, that is, they present ideals or goals rather than implementation details.” In other words, the lack of transparency and precision in the substantive law prevent effective trademark enforcement in China. It may be interesting to see whether this is equally applicable to other areas of the IP system.

The five cultural factors which Carter (1996) identified as operating against the acceptance of IP law are as follows: firstly, “traders might think that ‘copying’ is not wrong because emulation was seen as an exercise in deference and socialisation in Chinese society”; secondly, there is no tradition of individual property ownership; thirdly, under Marxist thought, IP is seen “as products of the society from which they emerge”; next, Chinese consumers are used to relying on brands to guide their choices; and finally,guanxi (relationships) and networks “override formal law-based obligations.” Carter places equal emphasis on both cultural factors and systemic factors in the legal system as responsible for the current condition of the trademark system in China. According to Carter, these nine legal and cultural factors operate together to prevent the successful legal transplant of international standards of trademark law by inhibiting the legitimation of trademark protection in Chinese society. Carter’s emphasis on factors based on China’s legal system and cultural traditions appears to highlight the importance of factors specific to China under the Jacobson and Brown Weiss comprehensive model of compliance outlined above.

It is indeed necessary to acknowledge the role of cultural values in any legal system. “The nature and role of law are delineated in any society within its particular cultural and institutional matrix” (Haley 1991, p. 4). Thus, cultural factors are indeed significant in analysing compliance with international legal norms. Furthermore, recent analyses of IP and its role in international relations have also focused on moving beyond a formalist concept of international law to a more normative approach. This is in line with the Rawlsian approach which “maintains that international relations are not solely about states, but are also about people and peoples.”³ This corresponds with Ryan’s study of the politics of international IP described as “knowledge diplomacy,” which agrees that “state power offers only a superficial explanation of the multilateral diplomacy concerning intellectual property rights that has been conducted in the 1980s and 1990s” (Ryan 1998, p. 3). For example, “US patent and copyright business interest groups drove trade-related IP policy in the 1980s and 1990s, although the diplomacy was conducted on their behalf by the US executive branch” (Ryan 1998, p. 8). Accordingly, it is no longer sufficient to solely examine the law and government policy in order to analyse IP law; it is crucial to also examine the many interest groups also involved in IP law-making and enforcement. This shift of emphasis from the state as the sole actor in IP to other groups and individuals reflects the emergence of liberal theory in international relations literature which also focuses on the role of the individual. Thus, previous studies of China’s compliance may be outdated if they ignore the role of actors below the level of the state.

Finally, a recent study of China’s compliance in global affairs by Chan (2006) considered China’s compliance with international trade agreements such as those mentioned above, as well as the previously discussed areas of arms control, environmental protection and human rights. His overall conclusion is that “it can be concluded that China’s overall compliance record in global affairs is satisfactory to good, given the difficulties that it faces in its economic, social and political transitions, and given the fact that compliance measurement is difficult to make” (Chan 2006, p. 204). Chan further concluded that China’s compliance with its global trade commitments is judged as “satisfactory” overall, but highlighted IP as an area in which China has had problems fully meeting its international obligations. Chan also considered the impact of different theories in China’s interactions in global trade, including neorealism, liberal institutionalism and social constructivism, but overall takes a fairly neorealist approach to compliance, for example stating that “nation-states are still the main actors in international affairs” (Chan 2006, p. 210). Considering this tension between commentators who hold that, at least in China’s case, the state is the most important player, and those commentators who insist that the role of other interest groups is also significant, it may be interesting to consider who exactly are the main actors in China’s developing IP system.

In terms of research into China’s IP system specifically, there is a persistent idea that IP “has always evolved in response to economic and political necessity” (Endeshaw 1996, p. 79). Some observers have used this idea as a basis for explaining why China lacks effective IP protection. The dominant theory draws on the experience of Taiwan and Korea to argue that a combination of external and internal pressure is truly necessary to bring about genuine change in IP protection (Maruyama 1999, p. 167). Based on the development of IP protection elsewhere in Asia (such as Korea, Japan and Taiwan), a three-phase model has therefore been proposed for the development of an effective IP regime. These three stages are as follows: first, external trade pressure leads to legal formalities such as adequate laws and regulations; then, a stop-gap form of enforcement by government edict emerges following US pressure; finally, IP agreements become self-sustaining and a genuine rule of law begins to emerge due to the development of indigenous technologies (Maruyama 1999, p. 207).

In China, the first two stages can clearly be witnessed in the US-Sino Agreements of the 1990s, which first emphasised the substantive legislation on IP and then focused on the enforcement of IP. Therefore, if this model also applies to China, in the final stage of the model, IP needs to be developed by Chinese rights-holders in order to become self-sustaining. This theory is supported by many observers who believe that if Chinese private companies possessed more IP, protection would be sought and obtained for these rights (Endeshaw 1996, p. 79).

This three-stage theory of China’s development of IP protection and moves towards global IP norms also reflects some aspects of the compliance theories outlined above. It is clear that codifying international obligations into domestic legislation is insufficient for full compliance. Furthermore, this model seems to reflect Koh’s theory of transnational legal process in that only when the imported norms have been internalised can full compliance be observed. Finally, this model is similar to the five stages of compliance identified by Kent, in that procedural compliance is distinguished from de jure and de facto compliance. De jure compliance could be seen as equating to implementation under the Jacobson and Brown Weiss model of compliance and de facto compliance means enforcement of these laws in practice. However, this theory of IP development has been criticised as a form of “historical determinism” that “developing countries mount a deterministic development ladder, from light assembly to heavy manufacturing and on to high-tech products, and, having achieved this degree of industrialization, they begin to create, and protect IP” (Stevenson-Yang and DeWoskin 2005, p. 10). This reflects the criticism levelled at many compliance theories that they do not adequately explain the process of change, which will be the focus of Chap. 7 in this book.

Furthermore, China often does not follow conventional models of development. For example, strong rule of law and clear protection for personal property rights are usually thought to be required as a prerequisite for economic development, but China appears to have experienced significant growth without either, presenting a puzzle for economists, political scientists and legal scholars alike (Peerenboom 2002, p. 19). Consequently, although strong IP may have necessarily developed elsewhere in Asia in order to maintain economic growth, “an examination of the present situation in China indicates that this historical lesson may be inapplicable to China, at least for the present” (Chow 2000). Additionally, there may be key differences between China and other Asian countries which mean that the path of IP development is different. Overall, these previous studies of IP in China are simplistic and rely on emphasising one factor such as economic development or the role of individual rights holders to the exclusion of all others. Clearly, the issue of trying to rationalise non-enforcement of IP needs further analysis before a conclusive model can be agreed upon and this “enforcement gap” will be the focus of Chap. 6.

Finally, in terms of China’s compliance with its WTO obligations, there is now an emerging body of work in this area. Existing compliance theory would predict relatively higher levels of compliance with international trade rules as trade is seen as more closely aligning with national interest (Downs and Trento 2004). Kent, in her 2007 mini case study of China’s WTO participation, anticipated high levels of compliance with WTO obligations not only because accession offered clear material advantages to China, but also because it was so hard won (Kent 2007, p. 234). Webster’s study of China’s compliance with the rulings of the WTO Dispute Settlement Body (DSB) found that “to the extent China complies, it is largely discursive rather than digestive, focusing on words... rather than deeds” (Webster 2014, p. 23). This chimes with Kent’s overall judgement of China’s WTO compliance, that “China is, on the whole, compliant but not wholly cooperative” (Kent 2007, p. 238). Consequently, the existing literature would suggest that China’s formal laws and regulations appear to substantially comply with its WTO obligations, but actual practice may present a more mixed picture. Thus, this study will probe this purported gap between rules and practice in more depth to obtain a more complete picture of TRIPS compliance, as well as including a uniquely long-term analysis of China’s changing compliance with its TRIPS obligations since WTO accession in 2001.