http://dspace.cityu.edu.hk:80/handle/2031/755 2013-04-30T07:38:15Z 2013-04-30T07:38:15Z Xiong, Jun (熊雋) http://dspace.cityu.edu.hk:80/handle/2031/6280 2011-05-25T01:20:22Z 2010-01-01T00:00:00Z

Title: A study of private securities litigation against false corporate disclosure in the People's Republic of China Authors: Xiong, Jun (熊雋) Abstract: In the early 1990s, stock markets were introduced by the Chinese government to assist in the reform of poorly performing state-owned enterprises (SOEs) by providing SOEs a channel to raise capital from private individuals and by installing market discipline on SOE managers. The development of the stock markets since then has been phenomenal, albeit in the absence of an investor-friendly legal framework. In the late 1990s, the markets were riddled with exposures of corporate disclosure frauds in which the interests of millions of minority (individual) investors were infringed upon. Investors who fell victim to these scandals responded by bringing private securities litigation (hereafter as "PSL") suits. This study examines the emergence, development, existing problems and future trends of PSL in relation to false corporate disclosure in China. The study is primarily motivated by the observed narrow scope of the several prior studies and the lack of a systematic account of recent court practices in PSL. An updated study is needed in light of the recent progress in capital market and corporate reforms. The research aims to fill the gap that to date there has been little systematic assessment of PSL in China, in particular, concerning the practice of people's courts in handling PSL suits and a detailed comparison of the PSL rules in China with those in the U.S. from which the 2003 SPC Rule has heavily borrowed. Chapter 1 of the study provides an overview of the study. Chapter 2 of the study first examines the frequency and extent of false corporate disclosure in China, and then identifies several institutional reasons for the rampant disclosure frauds. It also explores the tension between minority investor protection and the traditional political ideology that commits to safeguarding state interests and maintaining state control. This tension is the key to understanding the development of PSL in China. Through a comparison of differences in the causes and effects of PSL in the U.S. and in China, the chapter concludes that minority investors are more vulnerable and winning PSL is more difficult for them in China than in the U.S. The differences and complications in China also suggest that the development of PSL might be a long and bumpy ride. In Chapter 3 I identify two independent but logically coherent theories on a country's choice of corporate rules with a selective adaptation approach. They are Bebchuk- Roe's theory on a country's choice of corporate rules and Potter's selective adaptation of international norms. Both theories propose three mutually consistent key elements that affect the selective adaptation including political ideology. I show that both frameworks can be treated as a unified analytical framework that is capable of explaining the emergence of PSL in China. Adopting this selective adaptation framework also enables me to develop a central argument in Chapter 4 that the lack of detailed rules supporting Article 63 of the Securities Law (1998) is not the main reason for people's courts' passive and reluctant attitude towards taking on and actively adjudicating PSL suits. After reviewing all the relevant laws and regulations governing false corporate disclosure in Chapter 4, the study finds that until the recent major revision of Company Law and Securities Law in 2005, Chinese laws and regulations have primarily relied on public enforcements (administrative sanctions and criminal penalties) to combat disclosure frauds. Nevertheless, Article 63 of the Securities Law (1998) does provide a legal basis for investors who suffered a loss as a result of disclosure frauds in securities issuance to seek civil remedies. Then what explained the three-stage emergence of the PSL in China (marked by the issuance of the 2003 SPC Rule)? Using the Bebchuk-Roe and Potter's theoretical framework on a country's selective adaptation of corporate rules, I find that (a) public-regarding judgments as to which rules would be most efficient, (b) the effect of interest group politics, and (c) culture and political ideology all played a role in the emergence of PSL in China. The latter two elements on "culture & ideology" and interest group politics thus means that the emergence of PSL in China is bound to be slow and gradual, which reflects a more complicated and dynamic selective adaptation process. While Article 63 created a high market demand for PSL, it did not result in a corresponding supply of PSL court service. I argue that understanding this disparity is central to understanding the key factors behind the emergence of PSL in China. After carefully analyzing the stages of the PSL development and people's courts changes in behaviors, I conclude that people's courts' passivity and reluctance in taking on PSL suits in the early stage of the PSL development (before 2002) is likely a strategic choice and a reflection of the tension between traditional political ideology and protecting private investors. In contrast, the commonly blamed lack of detailed operational rules does not appear to be the major reason. My analysis also reveals that legal reforms clearly lagged capital market developments in China and the emergence of PSL in China is also consistent with the "crash-then-law" argument. Chapter 5 provides an up-to-date assessment of the progress of PSL against corporate false disclosure in China following the implementation of the 2003 SPC Rule by analyzing court handling of three large-scale representative cases. I conclude that PSL in practice is far from being effective in China. The somewhat disappointing progress in "law in action" provides another test of the argument that Article 63 of the Securities Law (1998) was not enforced is not due to the lack of detailed supporting rules. Indeed, during the five years following the implementation of the detailed 2003 SPC Rule, courts still frequently refuse to follow the rule in taking on and trying PSL suits. The inherent tension between investor protection and socialist political ideology and local protectionism seem to play an important role. It also highlights the importance of supporting institutions and infrastructures to the enforcement of PSL rules. The 2003 SPC Rule was heavily influenced by the PSL in the U.S., for example, in terms of the adoption of the fraud-on-the-market theory. To help better understand and evaluate the 2003 SPC Rule, Chapter 6 provides an up-to-date review of PSL in the U.S. including the major governing statutory federal laws and their relevant antifraud provisions. My analysis of the PSL in the U.S. also highlights its problems and helps clear up some misconceptions that people tend to have about PSL in the U.S. The implication for China is that even in the U.S. that has comprehensive investor protection, defendant-friendly legal changes can still open the door for a new wave of securities frauds and PSL rules must be stringent. This chapter provides a benchmark for comparison in discussing the 2003 SPC Rule in Chapter 7 to help us understand how drafters of the PSL rule in China have selectively adapted the borrowed PSL rules to suit local cultural and ideological needs. Chapter 7 introduces and evaluates in detail the 2003 SPC Rule - the prevailing judicial regulation that governs the handling of PSL relating to false corporate disclosure. The rationale, pros and cons of each key article are analyzed by reference to people's courts' practice in trying PSL cases and the practice in the U.S. where appropriate. The 2003 SPC Rule's similarities to, and differences from, the U.S. PSL rules and judicial practice are analyzed using the powerful Bebchuk-Roe and Potter's selective adaptation frameworks. I find that the 2003 SPC Rule is laudable in many aspects of liberal borrowing of the U.S. practice, in particular, it has made a bold move in adopting the fraud-on-the-market theory despite the controversy about the market efficiency in China. The PSL rule drafters also have carefully adapted some U.S. rules to suit local circumstances. On the one hand, two aspects of the 2003 PSL Rule are more stringent than those in the U.S. (i.e., the strict liability of fraudulent company and its controlling shareholders in secondary market cases, and the liability of securities service professionals that act as aiders and abettors in secondary market cases). On the other hand, local regulatory culture of state control and political ideology of safeguarding state interests have found their way to modify PSL by introducing three "smart" ways that constitute major barriers for bringing PSL suits. These three barriers - the prerequisites to bringing a suit, jurisdictional requirements conducive to local protectionism, and the lack of an efficient form of litigation - ensure that PSL will not endanger the socialist ideology. How far PSL in China can move depends on the government's leeway in adapting its regulatory philosophy on state control and to what extent it is willing to balance state interests and private interests. My analysis also identifies some inconsistencies in articles regarding loss causation and the calculation of losses in relation to market systemic risk, which are not reported in prior studies. Finally, some preliminary suggestions are offered to solve the identified problems. China is well-known for its big difference between law on the books and law in action, as revealed by my case studies in Chapter 5. The implication is that law in action depends on supporting institutions and infrastructures. Indeed, rules can be transplanted, but supporting institutions and infrastructures are hard and must be home-grown. Chapter 8 focuses on judiciary that enforces law and infrastructures that help secure financial means for rendering relief to aggrieved investors. Both issues are important and crucially affect the enforcement of PSL rules. I analyze the weak judiciary in China that lacks independence, authority, and competence. The analysis also identifies the regional variations in local protectionism and competence of courts, suggesting that the behaviors of the local government and court and possibly the effect of judicial reform may vary according to the development level of the local economy. Two tentative measures are proposed to mitigate the adverse effect of courts' lack of independence and competence in adjudication before the full-blown judicial and political reforms are completed. One measure is to change the jurisdictional requirement in the 2003 SPC Rule and the other is to introduce the case precedent system by the SPC. Finally, the chapter, by reference to the latest developments and trend in the U.S., examines another supporting infrastructure of PSL - how financial means to provide sufficient compensation to defrauded investors can be secured via various insurance mechanisms, returning corporate and personal fines for shareholder remedies, and setting up a market-wide investor compensation fund. This study concludes in Chapter 9. The recent emergence and development of PSL in China and the issuance of the 2003 SPC Rule have been remarkable and of significance. The gradual emergence of PSL in China fits nicely Bebchuk-Roe and Potter's selective adaptation frameworks. Though the 2003 SPC Rule resembles the key features of the American PSL practice, it aims for different goals and will produce different results. While the government intends to provide a way for defrauded investors to seek economic relief, it maintains state interests through some procedural safeguards. Since the legal infrastructures (e.g., judiciary and mechanism securing financial means for providing compensation for investors) in China are still weak and will remain so in the foreseeable future, PSL in action is expected to exhibit some persistence with the old practice - i.e., law in action will be different from the law on the books. The ride of PSL in China is bound to be a long and bumpy one. I wrap up the thesis by discussing the limitations of PSL and the implications for investors. Notes: CityU Call Number: KNQ962 .X56 2010; xxiii, 475 leaves 30 cm.; Thesis (Ph.D.)--City University of Hong Kong, 2010.; Includes bibliographical references (leaves 456-475)

2010-01-01T00:00:00Z Wang, Chao (王超) http://dspace.cityu.edu.hk:80/handle/2031/6278 2011-05-25T01:20:18Z 2009-01-01T00:00:00Z

Title: Trade remedies in regional trade arrangements : the practice, the law and beyond Authors: Wang, Chao (王超) Abstract: Against the background of economic globalization, today‟s world economy shows a number of characteristics, among which the continued proliferation of regionalism and the increasing use of trade remedies are two of the most significant ones. Importantly, within the WTO multilateral trading system, which is essentially established on the non-discrimination principle, regional trade agreements (RTAs) are allowed on condition that some requirements are satisfied in accord with GATT Article XXIV and the 1994 Understanding. However, the meanings of certain legal requirements are by no means clear and amenable to different interpretations. One example is that it is not clear with regard to the application of trade remedy measures in the RTA context, and in practice the choices have virtually been left to the individual WTO members. As a result, many and varied approaches are found in the hundreds of RTAs currently in force. This dissertation research provides a comprehensive and in-depth study of the complicated landscape of using trade remedies in RTAs: it intensively studies the contents of the trade remedy provisions in some 120 selected RTAs, provides a classification and abstract of the different types of these provisions, analyzes and evaluates the roles, effects, functioning, and other implications of those RTA-specific trade remedy provisions. In addition, it also conducts a legality examination of those innovative approaches in terms of their consistency with the relevant GATT/WTO provisions. Based on these studies, the desirable approaches for the use of trade remedies in the RTAs context, and the proposals for future reform to address the existing problems in light of promoting free and fair international trade are further discussed. Notes: CityU Call Number: K4600 .W36 2009; xiv, 358 leaves 30 cm.; Thesis (Ph.D.)--City University of Hong Kong, 2009.; Includes bibliographical references (leaves 340-355)

2009-01-01T00:00:00Z Jiang, Qinfeng (姜勤峰) http://dspace.cityu.edu.hk:80/handle/2031/5024 2008-02-11T07:08:22Z 2007-01-01T00:00:00Z

Title: China and TRIPS : diversification of intellectual property laws after harmonization Authors: Jiang, Qinfeng (姜勤峰) Abstract: After China incorporates TRIPS into its intellectual property laws, one may argue that China has been in line with the international standards in terms of the legal regime for intellectual property rights. However, it is clear that the infringement of intellectual property rights in China is growing rather than diminishing. To analyze this phenomenon, this thesis conducts a detailed study of China’s enforcement of intellectual property laws. The first section of the thesis investigates how the enforcement measure of TRIPS is implemented in China and how its administrative and judicial institutions function to deal with various intellectual property infringements. Particularly, the thesis is interested in looking into cases concerning legal issues not harmonized by TRIPS, such as patent claim interpretation, the standard of originality for copyright, copyright liability on the Internet, the protection of folklore, the similarity of trademarks, reverse passing off, disputes between a well-known trademark and domain name holders, the conflict of intellectual property rights, database protection etc. Moreover, the thesis investigates how criminal liability for intellectual property infringement is enforced in China. As a whole, this part shows the divergent legal principles in enforcing intellectual property rights in China after harmonization with TRIPS. Secondly, this thesis evaluates four factors that still impede the enforcement of intellectual property laws in China: the legal tradition, conflicts amongst competing domestic laws, lower level of technological level, and increased international competition. These problems illustrate how difficult it is to undertake the protection of intellectual property in China even after the incorporation of TRIPS into China’s domestic legislation. Thirdly, the thesis studies Hong Kong’s intellectual property legislation and cases law for comparative reference. It looks at how the Hong Kong government has adopted intellectual property policies geared to the private interests and emphasizing the function of stronger intellectual property protection as means of providing economic incentives for investment in intellectual property-related industries. It looks in detail at how Hong Kong has followed the UK tradition in dealing with intellectual property issues such as claim interpretation of patent, originality standard and infringement standards of copyright, the protection of goodwill by the law of passing off, and the protection of trade secrets through non-solicitation obligation and fiduciary duties. It illustrates that in various aspects of intellectual property laws not harmonized by TRIPS, Hong Kong has developed divergent legal principles more detailed and comprehensive than China. Finally, the thesis highlights the domestic and international factors that impact the development of intellectual property rights in China and examines how domestic incentive will promote the reformation of future intellectual property laws in China. It puts forward suggestions for reform of certain aspects of China’s intellectual property laws, namely: the protection of the tile of a work, copyrights in a work made for hire, damage calculation, liability for distributors and end users of software and non-competition obligations. These are areas of intellectual property law that have not been addressed in detail by TRIPS. Therefore, as China is unable to obtain direct guidance from TRIPS in these areas, it must learn from its own experience as well as foreign law and practice to develop its own statutory principles. Notes: CityU Call Number: K1401.A41994 J53 2007; Includes bibliographical references (leaves 343-373); Thesis (Ph.D.)--City University of Hong Kong, 2007; xxix, 373 leaves ; 30 cm.

2007-01-01T00:00:00Z Luo, Qing (羅慶) http://dspace.cityu.edu.hk:80/handle/2031/4540 2007-07-12T02:03:36Z 2006-01-01T00:00:00Z

Title: The legal protection of the insured : a comparative study of Chinese, UK, Australian insurance law Authors: Luo, Qing (羅慶) Abstract: Insurance originated in England. Many common law principles and rules enunciated centuries ago in respect of insurance are still applied. Chinese insurance legislation is much affected by the English common law principles as well as by principles and rules enunciated in other western countries. The present Chinese Insurance Law is not only modeled on the common law principles and rules, it also has several characteristics of traditional Chinese law. It is a comprehensive piece of insurance legislation which deals with many issues in insurance including insurance contracts, insurance organizations, insurance supervision and insurance intermediaries. Besides, the protection of the insured’s interest is also an important issue dealt with by the Chinese Insurance Law. Due to lack of professional knowledge and skills, insureds are always in a weak bargaining position when they face a contract of insurance containing obscure and complicated terms. The insured’s power to negotiate contractual terms is very limited since the insurer will only be prepared to enter into a contract of insurance upon its own terms. In addition, insurance laws and regulations generally protect the insurance industry and the insurer, and impose onerous duties on the insured. For example, the insured is required to fully disclose all the material facts to the insurer, even facts outside his actual knowledge. If the insured fails in this duty, the consequences could be serious for him. These insurance regulations perpetrate the inequity between the insurer and the insured. In the last few decades, however, much attention has been paid to the weaker position of the insured. Insurance law reforms are taking place in many countries for reestablishing justice and balancing the rights and duties of the insurer and the insured. Such reforms put the insured in somewhat better position. The reforms concern several important questions, such as the bargaining power of the insurer and the insured, the need for insurance contracts to strike a balance between the interest of the insurer and the insured, the desirability of ensuring that the manner in which insurance contracts are negotiated and entered into is not unfair, and there are no unfair provisions in insurance contracts. In addition, with economic globalization and insurance liberalization, free competition is regarded as important for the insurance industry, because it ensures the provision of the best products at the cheapest prices. This thesis puts special emphasis on Chinese insurance laws and regulations. Through comprehensive discussions of insurance regulatory issues, including the doctrine of utmost good faith, duty of disclosure, insurable interest, insurance contract, claims, supervision of insurance industry, the thesis examines the essential elements of legal protection of the insured and analyses the relevant regulatory issues. A comparative study of the relevant regulations existing in China and developed common law countries, like the UK and Australia, has been made whenever appropriate. This approach helps us not only to examine and evaluate insurance laws and regulations of China, but also to indicate the gaps that exist in the Chinese insurance laws and regulations. It also gives us an insight into recent developments in this field. Notes: CityU Call Number: KNQ998.L86 2006; Includes bibliographical references.; Thesis (Ph.D.)--City University of Hong Kong, 2006; xvii, 356, viii leaves ; 30 cm.

2006-01-01T00:00:00Z