Chinese law is developed along the civil law model. Unlike the English law system, judicial decisions in China generally have no force of law. Chinese legislation for foreign investment is made at many levels of government and by various bodies.

The National People's Congress (NPC) is the highest legislative body in China (the parliament) and passes all national legislation. The NPC headed by a President and a Vice-President who are elected by NPC members to fill these positions for a term of five years, with a limit of two consecutive terms. The NPC amends the Constitution, enacts laws, elects the President and Vice President of the PRC (People's Republic of China), elects the President of the Supreme People's Court, decides on questions of war and peace, and also has various removal powers. Typically, the pivotal roles within the NPC are held by important members of the Chinese Communist Party (CCP). The NPC approves policies submitted by the State Council that have previously been endorsed by the central committee of the CCP. As most of the laws adopted by the NPC and its Standing Committee are general in nature, they are usually supplemented by more detailed regulations and rules promulgated by the State Council.

When not in session the daily running of the state is taken over by the NPC Standing Committee. Below this sit four bodies:

1) The State Council: The highest executive body of the Chinese government. Below the State Council sit State Commissions (administrative and policy-making bodies), Ministries (government departments), Subordinate Institutions and Administration Offices of the State Council (supervisory and regulatory bodies) and Ministry-level Corporations and Companies. These may in turn contain or supervise various bureaux, and may have representation at both national and local level. The ministries, commissions and other regulatory bodies under the State Council are authorised to issue orders, regulations and rules within the jurisdiction of their respective departments and in accordance with the law and the administrative rules and regulations, decisions and orders issued by the State Council.
2 The Supreme People's Court: China's highest court.
3) The Supreme People's Procuratorate: China's highest prosecutor.
4) The Central Military Commission: he country's top military command body; sets policy for the People' s Liberation Army (PLA).

Local congresses and local governments of provinces, autonomous regions, municipalities directly under the central government, and some cities where provincial and autonomous region's people's governments are located also have the legislative power to enact laws suitable to local conditions, provided that such laws and regulations do not contravene the PRC Constitution, or the laws or regulations adopted by the central government.


How Chinese law can affect your business
There are a number of legal requirements in setting up a business in China, the first of which involves obtaining an approved business licence. Once this is done there are nine more government bodies (depending on location and the business) with which the company must register. Different locations have differing government policies. All registrations must be completed in a specific order and all require separate applications and approvals. It can take between three and 12 months to set up in China depending on the business scope and the form of investment.

• An introduction to the Chinese Legal and Government Structure - click to view