CHINA: LAW, FINANCE & SECURITY

On February 10, 2006, a day-long program on China was held at the University of Iowa College of Law. Free and open to the public, the program brought together eminent scholars on China who addressed three important topics: 1) China and the rule of law; 2) developments in China’s financial sector, and 3) relations between China and Taiwan.

Rule of Law

The first panel in the morning addressed the development of the rule of law in China. While the term “rule of law” may not have definitive meaning even in the legal systems of developed countries, this same term, as used in China today, can be characterized as an under-defined expression of a state-led effort to modernize a developing society, as well as a slow process of solid legal reforms that can eventually serve the interests of many Chinese citizens. It is therefore very important to discuss what the idea of “rule of law” may entail in China, how it suits and reconciles the demands of a market economy, the government’s current thinking on social stability, and the people’s increasing awareness of the need for a fair system of dispute resolution.

Developments in China’s Financial Sector

The morning session was followed by a luncheon talk on developments in China’s financial sector. Continued success of the Chinese economy will hinge upon the development of its banking sector and financial markets. Even a country pursuing an export-led growth strategy will eventually need robust domestic demand to facilitate sustainable long-term growth. Currently, the Chinese banking sector, burdened by over $200 billion in non-performing loans, is far from being in a position to spur domestic demand and may actually be dampening growth. Top Government officials have repeatedly spoken of the need for immediate banking reform. In addition to decreasing non-performing loans, regulators must improve corporate governance and institute a more thorough risk management system. And effectively regulated and efficient equity and bond markets will afford investors a wider range of investment opportunities, create alternate sources of funding for businesses, and provide much-needed competition for the banks.

China’s Relations with Taiwan

The afternoon session addressed “the Taiwan question,” one of the most perplexing and difficult issues currently existing in international law. The problem was created by ambiguities in treaties made at the end of World War II and by the split of Chinese sovereignty that occurred at the end of the Chinese civil war. The People’s Republic of China claims that Taiwan is a renegade province that has been a part of the mainland since ancient times and vociferously opposes third-nation intervention in a matter that the PRC considers to be entirely internal. Taiwan points to its vibrant democracy and complete autonomy in political decision-making as evidence that it is an independent political entity, if not an independent nation. Concerned nations are caught between, on the one hand, interacting economically and politically with the PRC on the condition that they not support Taiwanese independence and, on the other hand, assisting the Taiwanese people’s struggle for democratic self-government. As the PRC’s stature on the global economic and political stages rises, the need for a peaceful solution to the “Taiwan question” is increasingly important.

Sponsors

The program was sponsored by the University of Iowa College of Law, the University of Iowa Center for International Finance & Development, the University of Iowa Center for Asian and Pacific Studies, the Journal of Transnational Law & Contemporary Problems, the University of Iowa’s International Programs, the International Law Society at the College of Law, and the University of Iowa Student Government.