Conceptualizing a Hybrid Approach in Enforcement and Compliance in China: Adapting Responsive Regulation and Confucian Doctrines to Regulate Commerce

In the last few decades, China has transplanted a number of commercial laws from the West. However, without active enforcement of the laws, the Chinese economy in the mid to longer term is unlikely to benefits from the pledges of the new laws. This is not to say hefty number of prosecutions and successful litigation outcomes are unable to achieve the objects of the laws, rather this command and control approach creates an adversarial culture through protracted courtroom battles liken to a game of ‘cat and mouse’, not to mention the financial cost involved. Alternatively, regulators should combine regulatory innovations like responsive regulation pioneered by Ayres and Braithwaite with the Chinese business cultural values and practices to accomplish greater voluntary regulatory compliance. This approach would put the emphasis on forging a cooperative relationship between regulators and to bring about greater compliance with the spirit of the law. Adding to this is reviving elements of non-legal regulatory doctrine from Confucius that is a combination of moral precepts, hierarchical order and relational obligations between individuals and groups to compel voluntary compliance to codes of conducts known as ‘li’. And given Chinese business people belief in ‘guanxi’, this means relationships are valued more important than rules, embedded Confucian doctrines in regulation and compliance will be a sensible approach. In sum, enforcement should not be about ‘catch me if you can’. Instead, fostering a ‘culture of compliance’ with by adapting notions of responsive regulation by Ayres and Braithwaite with elements of Confucian legal doctrine will be more fitting for China.