NPC Enacts General Provisions of Civil Code

On 15 March 2017, the National People’s Congress (“NPC”) enacted the General Provisions of the Civil Code of the People’s Republic of China, which will take effect 1 October 2017.

The general provisions are comprised of existing civil norms and legal rules based on, and developed from, the General Principles of the Civil Law of the People’s Republic of China 1986. The civil code will be expanded in future to include more specific chapters governing property rights, contracts, tort liability, family law and inheritance.

Top highlights of the new or revised civil norms in this final version include:

  • Providing civil capacity to protect the property and personal rights of a foetus, provided the foetus survives the pregnancy.
  • Obligating adult children to care for, support and protect their parents, even where the parents have full civil capacity.
  • Lowering the age for the limited civil capacity of minors to eight years old from ten years old.
  • Clarifying the scope of non-profit legal persons to include foundations and social service organisations.
  • Prohibiting any person from collecting, utilising, processing, transmitting personal data illegally or supplying, making public or selling personal data illegally.
  • Providing increased protection for virtual property rights, including data information and networks.
  • Increasing the statute of limitations to three years from two years.

Market Reaction

Paul McKenzie, Partner, Morrison & Foerster, Beijing and Shanghai

“The General Provisions represent the first step in putting in place a comprehensive national civil code, which will ultimately supplant the patchwork of laws and regulations that currently comprise China’s civil law system. It is an important milestone in the development of China’s legal system. However, likely of greater concrete relevance to international businesses will be the legislative work still to come in completing the full civil code, which official commentary suggests will include chapters addressing matters such as property rights, contracts, infringement of rights, marriage and family, and inheritance. An aggressive legislative schedule has been set, with the various individual chapters to be submitted to the standing committee of the NPC for review and approval by 2018 and the full civil code to be presented to the NPC itself for approval by 2020.”

Action Items

Counsel for companies that might be involved in litigation in China should note the extension of statute of limitations for protecting civil rights to three years from two years. Counsel will want to watch for circulation of draft chapters that address specific areas of Chinese law, such as property rights and contracts that may affect clients in China, particularly insofar as these developments impact the rights of customers, employees and other interested parties.