Foreign-Related Rule of Law: Beyond the Buzz

Home | China Law Blog | Foreign-Related Rule of Law: Beyond the Buzz Table of Contents Toggle Foreign Related Rule of Law Foreign-related rule of law (涉外法治) is a relatively new buzz phrase that has been making the rounds in China's policy circles, with even Xi Jinping himself getting in on the action. Like other language coined by Chinese officialdom, the phrase is somewhat vague. At its core, this initiative aims to align China's legal system with international standards, making it more accessible and predictable for foreign businesses operating in the country. This in turn, it is hoped, will facilitate the country's integration into the global economy, with its accompanying legal complexities. Xi Jinping’s Vision: Strengthening China's International-Facing Legal System Xi Jinping has emphasized the importance of strengthening foreign-related rule of law as a crucial step towards building a strong China and integrating into the global economy. Given the signals from the very top, the legal community has been in overdrive. The Supreme People's Court (SPC) is weighing in on the subject and law schools are holding moot court competitions inspired by it. Judicial Interpretations and Typical Cases Last year the SPC issued a judicial interpretation on the application of foreign law to civil disputes, for the first time since 2012. It then followed up by publishing five typical cases (典型案例) involving foreign legal elements. These cases, the facts of which are considered by the SPC to be representative of the most common foreign-related disputes heard by Chinese courts, provide guidance to lower courts on applying foreign law within the Chinese legal system, helping promote consistency in judicial decision-making. Application of Foreign Laws in Chinese Courts The typical cases involve matters of Delaware, England and Wales, Mexico, Tajikistan, and Hong Kong law. In the first of these cases, a Shanghai court had to consider whether an investor had become a shareholder or director in a Delaware company. Relying on Delaware law, the Shanghai court determined that the investor had in fact become a director and a shareholder. In addition to its judicial interpretation mentioned above, in 2023 the SPC also issued a judicial interpretation on the application of international treaties and international practices by Chinese courts. This was again followed by the publication of typical cases. Earlier this year, the SPC published typical cases on the review of arbitration, including one in which the same Shanghai court as in the Delaware matter described above upheld an arbitration agreement that called for arbitration in China by a foreign arbitral institution. The focus on foreign-related rule of law also led to changes in China's Civil Procedure Law, which as our partner Dan Harris explained earlier this year in Enforcing U.S. Judgments in China: What You Need to Know, have the potential to lead to easier and more frequent enforcement of foreign judgments in China. With these judicial interpretations and typical cases, China is signaling its commitment to a more predictable legal environment for foreign entities—a move that could alleviate long-standing concerns about fairness and encourage continued foreign investment. The Path Ahead for China Foreign Investment Foreign companies have long navigated a complex legal landscape in China. While the country's vast market has been a powerful draw, concerns about a level playing field have persisted. One factor driving phenomena like nearshoring, which involves shifting production activities away from China, is the perception that foreign businesses cannot receive fair treatment in China. As China introduces these legal reforms under the banner of foreign-related rule of law, foreign businesses may view this as a positive signal that the country is becoming more welcoming and predictable for international investment. The prospect of a legal system that aligns more closely with international standards would reduce -- at least somewhat -- the perceived risks of operating in China, potentially leading to increased foreign direct investment. While these reforms present a promising development, foreign investors must remain vigilant, as the true test will be in their implementation. Only time will reveal whether these changes will deliver the substantive shifts necessary to help level the playing field for foreign businesses in China. Check Out Our China Law Services Share Twitter Facebook LinkedIn E-mail Comment Fred Rocafort Fred leads Harris Sliwoski’s intellectual property practice and is the coordinator of the firm’s international team. Much of Fred’s practice consists of helping cannabis businesses protect their brands. He also works with entrepreneurs and companies entering the Web3 space, a new frontier for IP law. Prior to joining Harris Sliwoski, Fred worked overseas for more than a decade, in both government and private sector roles. Fred is a regular contributor to the award-winning China Law Blog and Canna Law Blog. Fred began his career overseas as a U.S. consular officer in Guangzhou, China, where he advocated for fairer treatment of American companies and citizens in China and for stronger intellectual property rights enforcement. After entering the private sector, Fred worked at a Shanghai law firm as a foreign legal advisor and later joined one of the oldest American law firms in China, helping foreign companies navigate the Chinese legal environment. He also led the legal team at a Hong Kong-based brand protection consultancy, spending most of his time out in the field, protecting clients against counterfeiters and fraudsters in Greater China, Southeast Asia and Latin America. In addition to his IP work, as a native Spanish speaker, Fred works closely with different Harris Sliwoski teams on Latin America and Spain matters. Fred also provides advice to cannabis industry participants and other businesses on import and export transactions. Fred is an ardent supporter of FC Barcelona—and would be even in the absence of Catalan forebears who immigrated to Puerto Rico in the mid-1800s. Harris Sliwoski Attorney Read more posts [email protected] Read More Basics of China Business Law, Legal News Related Posts September 15, 2026 Your AI-Drafted China Contract Says It Needs a Lawyer. Listen to It. September 11, 2026 Forensic Accountants in China Business Litigation: How True Numbers Can Tell the Wrong Story September 4, 2026 China NNN Agreement or Trademark Registration? You Usually Need Both September 1, 2026 AI Didn't Replace Lawyers. It Gave Us the 48-Page Contract. August 27, 2026 Do I Need a China NNN Agreement or a China Manufacturing Agreement? Usually Both. August 26, 2026 China’s New Overseas Investment Rules: Can Your Chinese Investor Actually Get the Money Out? August 24, 2026 International IP Protection for Startups: What to Protect and Where August 19, 2026 The Documents Are the International Deal August 19, 2026 China Supplier Fraud in Yiwu: Why We Recommended the Police, Not a Lawsuit August 17, 2026 China Trademark Registration: Why U.S. Companies Need More Than a Filing Agent August 10, 2026 Buying Expensive Equipment from China: Seven Questions to Answer Before You Pay August 7, 2026 DDP Shipping Risks: What Boise Cascade’s Guilty Plea Means for U.S. Buyers August 6, 2026 Protecting Your Artwork Internationally: What Artists Need to Do Before the Work Travels August 5, 2026 Your China Employee Signed the Vacation Policy. You Can Still Lose. July 29, 2026 The RedNote Contract Lesson for Companies Doing Business in China Leave a comment Cancel reply