Following the enactment of the 2009 Tort Liability Law, the product liability system in China is largely complete. This article sketches the development of this system before outlining some of the main substantive provisions in force today and drawing comparisons between the Chinese approach and the US and European provisions. The Article will conclude that China’s product liability system provides an interesting case study which enriches the study of global trends and norms in the product liability arena. In line with many other countries, particularly in the Asia-Pacific region, the main influence on China has been the EC Directive rather than the US model.Thomas states
With the recent adoption of the 2009 Tort Liability Law (TLL) (in force from July 2010), it is timely to examine the development of the product liability regime in the People’s Republic of China (PRC). This paper seeks to outline the evolution of product liability in modern China from the initial introduction of a rudimentary set of tortious principles in the 1980s, to the more detailed provisions promulgated in the 1993 Product Quality Law and 1993 Consumer Rights and Interests Protection Law, and to the increasingly sophisticated Chinese consumers who are ever more willing to pursue their claims to court.
The evolution of the product liability system in China also needs to be set against a complex background of (over-)reliance on administrative remedies and multi-agency jurisdiction over defective products. Although these issues are not unique to China, they can also offer a useful perspective on the developing institutional capacity and regulatory norms in a country striving to move from a Socialist command economy to a modern economy driven by both exports and domestic demand. Both of these avenues for potential growth rely on product quality as a key factor and thus the development of a functional product liability system is crucial to secure the continued economic development of China in the future.
Further, examining the contemporary product liability system in China can illuminate aspects of the evolution of the wider Chinese legal system, such as the tensions between mediation and litigation as preferred methods of dispute resolution; the parallel tensions between civil liability and regulation via administrative means; and the emerging rule of law in China. Analysis of the Chinese product liability system can also contribute to existing debates on product liability on a global basis, including harmonization of product liability norms around the world, as well as the desirability (or otherwise) of such convergence; the increasingly blurred lines between the common law and civil law ‘families’ (and where East Asian legal systems fit into such a classification); and the twin dominance of the US model and systems based on the EC Directive as opposing models for developing product liability systems to emulate.
The TLL largely completed the formation of a modern product liability system which had been under construction for nearly 30 years. Although the TLL did not alter the pre-existing fundamental roots of the product liability system, it consolidated previous provisions on tortious liability, which were scattered throughout a range of laws, regulations and judicial interpretations, into an inclusive law with 12 chapters and a total of 92 Articles. In particular, the TLL increased the civil remedies available to consumers by introducing punitive damages, only previously available for certain product classes/categories, as well as mandating a universal warning and product recall system. Thus, the second part of this article will cover the background of product liability in China which culminated in the 2009 TLL and essentially aims to detail how and why the product liability regime developed as it did. This section will also contain some comments about how the Chinese experience compares to the development of product liability regimes in other jurisdictions, focusing on the US and Europe.
Next, the third part will discuss some of the most significant substantive provisions of the product liability system in China and draw comparisons with other product liability regimes around the world, in order to evaluate the Chinese system more systematically. In particular, reference will be made to the US product liability system post-Third Restatement3 and to countries adopting the 1985 EC Directive on Liability for Defective Products,4 in order to highlight to what extent the Chinese product liability regime is converging or diverging away from product liability norms in other jurisdictions. This section will focus on certain key elements of the product liability system, including: where the relevant rules can be found; whether the basis of liability is strict or based on fault; the remedies available including the potential availability or otherwise of punitive damages; and the mechanisms available for enforcement either by individual consumers or consumer bodies. The final section will draw these observations together to discuss what the Chinese product liability system can tell us more broadly about the general development of the Chinese legal system, the implications for product liability norms globally, as well as considering any enduring practical and political barriers to the operation of an effective product liability system in China.