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Doing Business in China by Jane Menzies

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Chapter 5

The Legal System

How Can You Use It to Your Benefit?

The legal system in China is often described as complicated, non-transparent, hard to understand, heavily influenced by the government, and unenforceable. China uses a bureaucratic law system, which is distinct from common law used in Australia, and is derived from Soviet and European civil code principles.1 The case involving the Chinese-born Australian national and Rio Tinto Manager, Stern Hu, who was arrested in 2009, demonstrates the ambiguity in the Chinese legal system.2 At the time, analysts questioned whether Stern Hu’s arrest was a result of allegedly “stealing state secrets” or was it a political reaction to Rio Tinto’s withdrawal from a deal proposed by the Chinese company ...

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