A ranking Chinese judge has promised foreign firms World Trade Organization rules will take precedence in litigation after China enters the trade body, state media said Monday.
Local regulations will take second place and only be applied if they are in harmony with WTO rules, the Xinhua news agency reported, citing Li Guoguang, vice president of the Supreme People's Court.
"If WTO rules are not consistent with Chinese domestic laws, WTO rules have priority," Li said at a meeting on civil trials.
But foreign-invested enterprises that are registered in China will still be treated as Chinese legal entities and domestic law will be applied in their cases, Xinhua said.
It remains to be seen if Chinese membership of the WTO will make it easier for foreign companies to navigate China's legal system, which has been built almost from scratch over the past two decades of reform.
When US Trade Representative Charlene Barshefsky reached an agreement with China on WTO entry in November last year, she said the deal would "strengthen the rule of law in China."
In the past, foreign companies have generally tried to avoid Chinese courts "at all costs," according to a white paper published earlier this year by the American Chamber of Commerce.
This is because of skepticism about the independence and professionalism of Chinese courts and worries that court judgments are difficult to enforce, according to the white paper.
China is expected to complete its 14-year bid for membership of the WTO later this year or early next year.
Negotiations on securing a multilateral agreement incorporating China's commitments to WTO regulations are to resume in Geneva on November 2 -- BEIJING (AFP)
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