China is a bit of an enigma for economic and legal forecasters. News media outlets, journalists, and lawyers all differ in how to categorize the region. This has become especially difficult now that China has ascended to full membership in the World Trade Organization. Although the argument is multifaceted, most arguments fall into two main categories: China is communist but things are moving closer to a quasi-capitalist, free society (or) China is communist black and white, pure and simple.

The inherent complexity of the Chinese legal, economic, and governmental system makes any pure classification difficult. What is true for the current moment may not represent the future situation. But, those who see capitalism on China’s horizon point to private business expansion throughout China. International business transactions and foreign investment in the domestic Chinese market are common in some sectors. For instance, Starbucks has over 19 outlets in Beijing, Buick has a factory in Shanghai, and there is even a super Wal-Mart in Shenzhen. However, scholars who foresee easy change may be too optimistic. Among many areas, the communications and banking sectors are still not completely open for foreign companies. In addition, China’s history of nationalism, cultural pride, and government leaders’ self-interest in preventing an erosion of power are all factors that could impede change.

Those who take the second position point to negatives and argue that China remains the same communist nation responsible for the Tiananmen Square massacre. The argument for pure communist labeling centers upon the tight constraints placed on media and new technology-based communications as key examples of how things have not changed. The factual assertions of this approach often have merit as important points to consider in evaluating China. However, this argument fails to account for any gradation between communism and capitalism.

Because these issues are important for international trade and legal development, I am including several articles and website links that present poignant examples and interesting perspectives of the future for China and Hong Kong. They are representative of the ongoing debate about where the region is headed.

Is Your Web Site Available in China by Bruce Einhorn, BusinessWeek Online

China's Experiment: Read All About It! by Mark Clifford, BusinessWeek Online

Two Economies, One Country Features by  Jerry Borrell, Upside Magazine

China Journal, Daily Briefing BusinessWeek Online

Asia Pacific, International New York Times

Buicks, Starbucks and Fried Chicken.Still China? By Elisabeth Rosenthal, New York Times

China's New Game Time Asia

Current Law Journal Articles:

William I. Friedman, ALUMNI ARTICLE: ONE COUNTRY, TWO SYSTEMS: THE INHERENT CONFLICT BETWEEN CHINA'S COMMUNIST POLITICS AND CAPITALIST SECURITIES MARKET, 27 Brooklyn J. Int'l L. 477 (2002).
The article explores economic reforms made by the Chinese government, including conversion of stateowned enterprises to shareholding companies. The commentary points out some of the flaws that could impair economic growth, such as government corruption and strong state manipulation/control of the securities market.

Ian A. Rambarran, COMMENT: I Accept, But Do They? ... The Need for Electronic Signature Legislation on Mainland China, 15 Transnat'l Law. 405 (2002).
The article evaluates the various options available to China for electronic signature legislation. This is an increasingly important issue for e-commerce and businesses engaged in international trade.

Articles from the Florida State University College of Law's Journal of Transnational Law and Policy:

William I. Friedman, ARTICLE: CHINA'S ONE COUNTRY, TWO SYSTEMS PARADIGM EXTENDS ITSELF BEYOND THE MAINLAND'S BORDERS TO THE SOUTHERN PROVINCIAL GOVERNMENT OF HONG KONG, 11 J. Transnat'l L. & Pol'y 65 (2001).
The article points out Hong Kong's significance for having a stable "rule of law," indicating how this has attracted worldwide investment. Specifically, the author discusses the role that "Hong Kong's Independent Commission Against Corruption ("ICAC") will play in preserving the integrity of the territory's marketplace after its passage to Chinese sovereignty." Id, at 73.

J. Cameron Thurber, ARTICLE: WILL RETROCESSION TO A COMMUNIST SOVEREIGN HAVE A DETRIMENTAL EFFECT ON THE EMPHASIS AND ENFORCEMENT OF LAWS PROTECTING HONG KONG'S ENVIRONMENT? THE CZECH EXPERIENCE AS CONTRAPOSITION, 11 J. Transnat'l L. & Pol'y 39 (2001).
This article focuses on the issue of "whether the transfer of Hong Kong's sovereignty to a Communist government will have the reverse effect on environmental law when compared with the Czech experience in shedding its Communist system." I agree with the author's concluding point, that "any pressure applied by China will likely be subtle and indirect." Id. at 64

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