Contracts in the People’s Republic of China: An outline of the Chinese law from the perspective of Europe and Hong-Kong

By Jacques H. Herbots

A complete and well-documented review of contract law in China.

This in-depth introduction to the law of contracts of Mainland China was written for Western lawyers who have contacts with the People’s Republic of China, for scholars and students of comparative law or of Sinology. As stated above the book is merely an introduction, not a technical legal treatise for specialised
private lawyers. It is therefore useful for businessmen too. Without using stale language, this work also places the law of contractual obligations in an historical and socio-political context. It sketches, besides the general theory of contractual obligations and the provisions on the several specific contracts,
the Chinese case law on international sales contracts, as well as the law on the dispute resolution. It can be said that with regard to the private law the book opens a window on the continental Chinese legal culture, as Zweigert and Kötz would call it.

An essential handbook for all lawyers who wish to be fully involved in international relationships

ABOUT THE AUTHOR

Jacques H. Herbots devoted his PhD thesis to African law. Thereafter, for many years he taught contracts, obligations and comparative law at the renowned university of Louvain. Besides his main tasks as a professor, he kept feeling the pulse of the living law as a deputy judge, as an assessor in the Belgian Council of State and as a member of the High Council for the Judiciary. He is currently still arbitrator in the Belgian Centre for Arbitration and Mediation, and he was appointed to the panel of the CIETAC in Beijing. Ever since a visit to the People’s Republic in 1974, one may safely say he has been fascinated by the Empire of the Middle.

• Language: English
• Publisher: Die Keure Publishing
• Release date: Mar 12, 2018
• ISBN: 9789048632732

Book preview

FOREWORD KOEN GEENS

You should most definitely read this book because it is written by an erudite man who has always considered the comparison of our laws to those of non-European legal systems to be of paramount importance. Studying Chinese law in the native legal language demands an enormous amount of willpower, legal expertise, and linguistic skill. Professor Jacques Herbots possesses superior amounts of educational theory, willpower, comparative law expertise, and linguistic skills.

Professor Herbots justifiably notes in this book that, Western lawyers involved in international relations cannot remain ignorant of the Chinese legal system any longer. In these modern times of globalisation and digitisation of our daily lives, a superpower like China plays an incredibly important role as both a consumer and a supplier. Everybody has probably concluded some kind of ‘contract’ with a third party in China, be it physically or digitally.

The tendency to make deals daily with international parties and, as a rule, to give these form within a contract will only grow stronger in the future. Hence the importance of, on the one hand, knowledge of the law, and on the other, access to legislation that is clear, transparent, and user-friendly.

The National People’s Congress in China has, in light of the abovementioned evolutions, adopted The first general part of the Chinese Civil Code in 2017. A broader revision of the civil law is expected to take place in China in 2020.

Hard work is also being done in Belgium at the moment on recodifying the basic laws. In addition to the Penal Code and the Code of Criminal Procedures, the Civil Code and the Commercial Code are also undergoing thorough revisions. Every one of these legislative branches is fundamentally important to our social fabric. This book abundantly demonstrates this by explaining, in addition to the thorough analysis of Chinese contractual law, the history and social fabric that was created by this. For instance, this book includes an overview of Chinese history, the Chinese constitution, the People’s Court, the language, and the Communist Party.

As far as Belgian contractual law is concerned, major parts of the civil law and corporate law are currently being revised. Large parts of the voluminous Civil Code no longer comply with the law as this is currently being applied in practice. Antiquated provisions have led to the creation of a corpus of jurisprudence. Today, following the letter of the law no longer guarantees that it will be applied as such by the courts and tribunals. The Civil Code is antiquated and must therefore be amended in the spirit of a (more) modern society. The same applies to the Commercial Code. The Commercial Code was plundered at the end of the 20th century by special legislation, such as the insolvency and insurance laws, or by recodification of more restrictive domains, such as economic law or company law. Together with the implementation of new business concepts, the Commercial Code was further dismantled and clarity on just exactly what an enterprise is was created. Lastly, the Companies Code is also undergoing a thorough revision and being updated.

From the above, you can determine that the (re)codification of legislation, both in the East and in the West, is aimed at the same objective, i.e. finding fair solutions for human problems and transcribing these into simple, understandable, and accessible legislation. As the Minister of Justice, I want to continue to build upon this idea.

I recommend this book to anyone who likes to look far ahead and make comparisons, as well as anyone who has any legal or commercial contact with the Chinese culture. I wish the author, who is my former professor and a very learned man, Jacques Herbots, the very best. All the success he experiences upon the publication of this book is well deserved.

Koen GEENS

Minister of Justice

FOREWORD CHEN MIN

In the past four decades, China has undergone fundamental upheavals in all aspects of life. These radical changes in turn require new legislation to shape and monitor the conduct of citizens, enterprises and governments, contract law being a case in point. Professor Herbots’ new book provides insight to the evolution of, and the footprints engraved on, China’s contract law.

Jacques Herbots, Katholieke Universiteit of Leuven, is a Mandarin speaker who initiated his first contact with the prestigious Renmin University of China Law School in 1974, four years before China began opening up to the outside world. Ever since he has been a keen observer of developments in China and has lectured for 25 years on China’s contract law. This book is the outcome of his insights and deliberations.

In the year 2016 alone, of the 4.226 million commercial legal cases, 8,445 were international ones lodged with Chinese Courts or submitted for arbitration. In addition, more than 16,000 maritime disputes, most of them involving foreign elements, were brought for resolution. This book seeks to explain the substantive rules applied in the litigation process, its great strength being that it makes the subject-matter intelligible to the European way of thinking, particularly with respect to contract law.

As this reviewer can attest from personal experience of 11,000 cases over 24 years’ law practice in China, a major difficulty in dealing with cases involving legal professionals from as many as 47 countries is the lack of common ground on which to build a consensus. This book will definitely help in that important regard. Although it does not cover each specific article of China’s contract law, it does sift out all the unique and critical points – such as the Anglo-American contract formation, the subrogation claim and the special agency transfer of Articles 402/403 – to showcase the legislative intent. It does not explain everything, but it serves as a magic key to unlocking an understanding of the whole system.

Prof. CHEN Min

Deputy Secretary General of China International Economic and Trade Arbitration Commission

Secretary General of China Maritime Arbitration Commission

General Representative of China Chamber of International Commerce EU Office

I. THE BACKGROUND

§ 1. The aim of this book

1. Keys for Western lawyers. During the days of the Roman empire a road ran between China and the West. Now it is being resurrected. The Silk Road Summit of May 2014, covering President Xi Jinping’s One Belt, One Road plan, was as much about celebrating China’s rise as the 2008 Olympics were. Over the past forty years, the People’s Republic of China (PRC) – with its enormous population, rapidly developing economy and astounding industrial capacity – has transformed the world’s economy while simultaneously developing and reforming its own institutions. Even more noticeably since its accession to the World Trade Organisation on 11 December 2001, China’s influence on the global system of trade has been immense. Western lawyers involved in international relations cannot any longer remain ignorant of the Chinese legal system. This book sketching the great lines of the law of contracts of mainland China is written mainly for them. It should provide the keys, but not a full-scale exposition of the law of contract. The practitioner who needs advice on Chinese law will go to an expert, but he will understand the expert’s opinion the better for possessing the essential keys.

This presentation of the Chinese law on contracts is limited to mainland China (dà lù), and excludes the law of Hong Kong, where according to the principle one country, two systems the Common Law is applied, and the law of Macao, with his roots in the Portuguese law, and also Taiwan, which is a separately governed part of China. Throughout this book different examples will be met of differences between the private law of Hong Kong and that of mainland China. For example: consideration, specific performance, good faith. When a Chinese continental law text is translated into English by a lawyer of Hong Kong educated in the Common Law, a word of warning is necessary against the danger of mixing up notions of Common Law and civil law¹. Foreign legal ideas can be incorporated through a translation².

From a viewpoint of comparative law links will be made in this book with the law of contracts of continental Europe and with that of Hong Kong, which belongs to the English Common Law family, as mentioned above. Comparative lawyers know of the watershed between Civil law and Common Law, a significant divide.³

To place the book in a correct perspective, a word has first to be said about the Chinese Constitution and the rule of law, about the ultimate source of power, namely the Chinese Communist Party (CCP), about the People’s courts, and finally also about the obstacle for Western lawyers of the Chinese language, and about the Chinese legal terminology.

§ 2. The rule by law in the PRC

2. Fazhi. Since the end of the Chinese civil war in 1949, for several decades no real effort was made to distinguish politics from law. Since the death of Mao Zedong in 1976, however, the PRC has undergone dramatic transformations, including the establishment of a less political and more institutionalised and codified system of law. It could, however, be that the reader of this book has read in The Economist of some years ago the words of Fu Xiancai, a poor Chinese peasant who after being evicted from his ancestral home due to the (ecologically irresponsible) construction of the Three Gorges Dam, could not obtain compensation and wrote literally: My foot! A legal system? It serves only to fool the people, and to erect a façade for the foreigners.⁴ A façade? It is a poignant question to start with.

One of the most commonly used phrases in contemporary China, by legal scholars and politicians, is "fazhi. It can be translated as rule of law, but the question is whether it shouldn’t be translated as rule by law", which means the instrumental use of laws by rulers to facilitate social control and to impose punishment as understood in the Chinese philosophical legalist tradition. The related concepts of yi fazhi guo, "governing the nation in accordance with law", and jianshe shehui zhuyi fazhi guojia, "building a socialist rule of law state have been part of the Chinese Communist Party’s official policy since the mid-1990s. In 1999, the National People’s Congress (NPC) adopted an amendment to the Chinese Constitution, incorporating both concepts in Article 5, which now reads: The People’s Republic of China governs the country according to law and makes it a socialist country under rule of law".

Since he took over as China’s leader in 2012, Xi Jinping has often pledged to improve the rule of law. There have been positive results. Professional standards have improved in some spheres, particularly in commercial law. Mr. Xi means to apply the term mostly to businesses, and other parts of civil law. Lower-level courts have gained greater independence from local governments. In May 2015 a new procedure made it far easier to sue. Since then, the number of court cases has increased by a third compared with the previous two years say state media. Standards at China’s law schools are improving, and judges better qualified. But in any area where the rule of law is in contest with the power of the Communist Party, the decision of the Party wins the day.⁵

3. The Constitution. The Chinese Constitution occupies in this discussion a pre-eminent place. Moreover, the law of contract has also a constitutional dimension. Therefore the Constitution must be mentioned at the threshold of this book. The current Chinese Constitution was enacted in 1982⁶ and was revised in 1988 (land use rights), 1993 (socialist market economy), 1999 (rule of law) and 2004 (human rights). The text mirrors China’s willingness to depart from a state in perpetual revolution and the intention to build up a modern and more stable society. In this respect, the 1982 Constitution appears to be less ideological than its previous versions during the Mao era. However, the text presents contradictions. On the one hand, Article 1 still formally describes the PRC as a "socialist state under the people’s democratic dictatorship led by the working class and based on the alliance of workers and peasants – a strongly ideologically connoted description that departs significantly from the reality of contemporary China.⁷ The constitutional reform of 2004 added a new paragraph 3 in article 33 which reads: the state respects and protects human rights". The Constitution refers to numerous economic, social, cultural and political rights with no less than 27 references to very diverse individual rights.

The 2014 Fourth Plenum of the Chinese Communist Party (CCP) made Ruling the country according to law the central theme of its debate for the first time. An important caveat must be added straight away, which is President Xi Jinping’s warning that the purpose of the discussion had nothing to do with implementing the rule of law as an independent check on Party power.⁸ It remains unclear whether the CCP should be himself submitted to the Constitution. Then, there is no mechanism of judicial review. The government has continuously fought against constitutional activism, while party officials with a low legal background were elevated within the Ministry of Justice. This negative picture should still not undermine the important role played by the Constitution. Despite the said paradoxes, one must pay regard to both the actual effects of the Constitution and its functions in agenda-setting; source of inspiration for further legal and political changes and raiser of constitutional awareness.⁹ Mathieu BURNAY argues that China’s legal system can be a multiple-speeds legal system in which respect for the rule of law varies depending on the impact of the rules on the legal, political, economic and social stability of the country. A distinction must be made between implementing the rule of law as serving and protecting socio-economic relations and the rule of law as a principle to restrain the power of the public authorities. While tremendous progress has been made in the former, for instance in the law of contract, enormous challenges still remain when it comes to the latter. In his speech at the opening of the 19th Party Congress Xi Jinping was very clear: China will never copy the political systems of other countries – the Western notion of democracy in particular.

§ 3. The Communist Party

4. The vanguard. The leadership of the Chinese Communist Party (CCP) is only mentioned in the preamble of the Constitution. But the Party is, according to his own Statutes and Regulations (amended on 21 October 2017), the vanguard of the Chinese working class and of the Chinese people and the Chinese nation. It takes as its guide for action Marxism-Leninism, Mao Zedong thought and Deng Xiaoping theory. Article 3 of the Act on the Legislation Procedure of 15 March 2000 formulates clearly the leadership of the CCP: Laws shall be made in compliance with the basic principles laid down in the Constitution, shall be centred around economic development, and shall adhere to the socialist road and the people’s democratic dictatorship, uphold the leadership of the Communist Party of China, and adhere to the theory of Marxism-Leninism, Mao Zedong thought and Deng Xiaoping theory, persevering in reform and in opening to the outside world.

The Party has about 90 million members. The Party Congress (2287 members) meets each five years. The 19th and most recent Congress took place in October 2017. After a non-transparent procedure elsewhere during which the most important decisions are made before the meeting, the delegates of the Congress select the central organs through which the Party exercises power, namely the Central Committee, the Politburo and its Standing Committee, with the General secretary. The 19th Party Congress enshrined Xi’s political theory (Thought on socialism with Chinese characteristics for a new era) into the Constitution of the Party. The Economist recently referred to Xi Jinping as the world’s most powerful man, and he may be. Xi, regardless, is the most powerful Chinese leader since Mao Zedong. No doubt about this since the 19th National Party Congress.

Politburo Standing Committee (at the 19th Party Congress) of which all the members also hold a seat on the Politburo.

Politburo (at the 19th Party Congress)

5. Government and Party. Although the PRC Constitution recognises three powers, in practice these organs are not independent, and the relationship between the legislative, executive and judicial branches of government is more one of a superficial separation of powers (HE Weifang) that is controlled by the CCP. The Party shadows the state by penetrating it at all levels.

The president of the People’s Republic of China is not anymore a purely ceremonial head of State. Since 1993 the General Secretary of the CCP is appointed as president by the National People’s Congress. He is also the chairman of the military commission, which commands the People’s Liberation Army. The president appoints the premier and the 50 members of the Council for State affairs, the government. These ministers head the different ministries, like the ministry of State Security, the MOFCOM (commercial affairs), the MOHURD (housing, urban and rural development), etc.

The approximately 3,000 members of the National People’s Congress, who are appointed for 5 years, are selected by the provincial People’s assemblies, like those are selected by lower assemblies. All those members of People’s Assemblies belong to the Party’s bureaucracy. Only at the lowest level the people have a free choice. The National People’s Congress (the rubber-stamp Parliament) gathers once a year in the spring. In the meantime it is the powerful standing committee of the NPC (178 members) which is the parliament in the parliament.

The division of roles between the government of the PRC and the party is perplexing for outsiders.

6. The Party Departments. Zhongnanhai is a formerly imperial garden in Beijing, adjacent to the forbidden city. The compound is the modern forbidden city and serves as the central headquarters for the CCP and the central government. The party keeps an eye on any state or non-state agency, while shielding itself from view simultaneously. As the saying goes: the party is like God. He is everywhere. You just can’t see him.¹⁰ Under the control of the central committee of the CCP several departments outrank mere government ministries, as for instance the Central Organisation Department, responsible for personnel appointments. The Party likes to conjure up the past, as if to display an unbroken thread in Chinese political culture tying its rule to imperial officialdom. As early as the Han Dynasty the imperial system had something resembling the Organisation Department, a body which later came to be the "Li Bu. Throughout successive dynasties, the department was one of six core ministries advising various emperors on appointments, dismissals, civil service entrance exams, promotions and transfers. Tang Dynasty histories record officials being benchmarked on nine grades, which checked their diligence, virtues, integrity. Magistrates were similarly scrutinised on whether they judged and sentenced with equity and sincerity". Other departments of the CCP are for instance the General Office, the nerve centre of the CCP; the Central Security Bureau; the Central Propaganda Department, which handles news and information; the Central Liaison Department, responsible for relations with foreign parties and for gathering foreign intelligence; the Central Politics and Law committee, the country’s supreme authority which supervises the courts, the police, the Justice ministry and the legislature, the National People’s Congress.¹¹

The party departments oversee also the courts. Within the court, the judge’s decision may be overridden by higher authorities within the court, such as the adjudication committee. The courts are also subject to numerous outside pressures and are vulnerable to influence of the local government, as the latter appoints the judges and continues to supervise their activities.¹²

7. Five Tiers in government and party. The legal system in China operates as a five-tiered governmental structure with central, provincial, municipal, county and village levels. Each tier operates at its respective level exercising political, legislative, administrative and judicial functions complete with its own institutions.

The Party has branches in all five levels. There are 31 provincial committees of the CCP; 665 city committees; 2.487 county committees; 41.636 township committees; 780.000 village committees.

§ 4. The People’s Courts and the lawyers

8. The Chinese judicial system. We can learn a lot about the current state of the People’s Courts in the recent book of Stéphanie BALME, who during more than ten years did fieldwork in many mainland locations.¹³ The judicial branch, i.e. the People’s Court system, is one of the three branches of government with the executive and legislative branches, the Council of State and the National People’s Congress. According to the Constitution, China does not adopt the separation of power system.

© Schutterstock

Since an Organic Law of 1 July 1979 (revised in 1983, 1986 and 2006) the organisation of the People’s Courts can be sketched as follows, with at the top the Supreme People’s Court (zui gao ren min fa yuan) in Beijing (340 judges; chief justice appointed by the NPC). This Court judges not only in pending trials, but outside any dispute resolution it can give interpretation of a statute (si fa jie shi). The Supreme People’s Court has no disciplinary supervision of the lower courts.

Under the Supreme People’s Court there are, without speaking of exceptional courts, such as the military, or the maritime, or the railway courts, three levels of courts.¹⁴ In each province or autonomous region there is one High People’s Court (gao ji ren min fa yuan) – in Beijing and Shanghai there are two – which deal with the appeals against the judgments of the Intermediate People’s Courts (and judge only exceptionally in first instance). On municipal level there are for the whole country 389 Intermediary People’s Courts (zhong ji ren min fa yuan). For foreign persons or companies, which are a party in a litigation in China, it is since 1991 the Intermediate People’s Court with jurisdiction according to Article 19 § 1 of the Law on Civil Procedure. This will be the case when there is a foreign element.¹⁵ At the level of the counties (or districts) there are 3.607 basic People’s Courts (ji ceng ren min fa yuan). Under the basic People’s Courts there are, without being mentioned in the legislation, local chambers of the People’s Courts (Jiceng renmin fating) in the villages and small towns (12.000).

Judges in China are just subordinate civil servants, without much authority or prestige.

The Organic Law requires that adjudication committees be established for courts at every level. They comprise the president, vice president, chief judges and associate chief judges of the court, who are appointed and removed by the standing committees of the People’s Congresses at the corresponding level, together with some senior executives of the Party.¹⁶ They are charged with reviewing major cases. If a case is submitted to the adjudication committee, the court is bound by its decision. It is the most authoritative body in a court.

Hong Kong and Macau have separate court systems.

The court system is parallelled by a hierarchy of prosecuting officers called People’s Procuratorates, the highest being the Supreme People’s Procuratorate. They are State organs for legal supervision, a legal heritage of the Soviet Union.

The civil procedure is of the continental European style.

9. No Independence. According to article 3, third paragraph of the Constitution the courts are accountable to and are supervised by the People’s Assemblies. Constitutionally, the court system should exercise judicial power independently and free of interference. Yet the Constitution simultaneously emphasises the principle of the leadership of the Communist Party.

The independence of the judiciary is non-existent in China. The provincial People’s congresses appoint the judges. They have no tenure. The budget of the judiciary, the salaries of the judges included, come from the local authorities. A good example of this state of affairs gives us the famous case "Ru Yang District Seed Company v. Yi Cun Seed Company", decided on 27 May 2003 by the Intermediate Court of Luo Yang in the Henan province. Judge Li, presiding judge over a three-judge panel had heard a dispute between two local companies over the price of seeds. The legal dispute revolved around a conflict between provincial and national law. Faced with a conflict between national and provincial law (on seed prices) the female judge Li (member of the CCP) had declared the provincial law invalid. For the first time a judge announced a local regulation was void. What judge Li had considered judicial common sense, provincial legislators considered a judicial revolt. Their initial response was to crush it. Political pressure on judges is routine and derives from the subservient status of the court system within the Chinese bureaucracy. The legislative body demanded that the Luoyang court remove the judges from their posts. Later, faced with mounting media outcry, the court reinstated the judges. In 2004, Henan’s High Court reheard the seed case. It ruled exactly as judge Li had, with one exception: it criticised her for invalidating the provincial law. ¹⁷ Years later, in 2017, Zhou Qiang, the president of the Supreme People’s Court, denounces judicial independence in western style, an about-face that jeopardises the efforts to create impartial legal institutions in China.¹⁸

Chinese courtroom

© Chen Min

10. The lawyers. Since 1979, the Chinese have built up the institutions and the personnel to apply the new body of legislation. There are now roughly 200.000 judges and a similar number of prosecutors, and a large number of legal administrators in the Ministry of Justice and other government agencies at the national, provincial and local levels. There are over 270.000 practising lawyers, and every substantial Chinese business, whether state-owned, private or mixed, must have legal advice, with most of the larger ones having their own in-house counsel. Now there are almost 900 law schools and university departments. The number of their students increased from 25.000 in 1991 to 450.000 in 2005 and became stabilised at 750.000 in 2014.¹⁹

Every year several hundred thousand people take the national bar examination, which only passes a small percentage. Since 2002, all new members of the judiciary and legal profession must pass the National Judicial exam.²⁰ It is acknowledged to be the most difficult examination in China. Candidates sit the examinations of 17 subjects all simultaneously. It requires a high memory power and an equally high ability to making a swift analysis of difficult cases. It is expected to increase the professionalism of the judiciary, which has been lacking. All participants must have a university-level education, although not necessarily in law. On 30-31 March 2002, China held the first National Judicial Exam. Of the 360.000 participants, about one third were staff members of the courts, procuratorates, public departments, and other workers in law. Only 7 percent passed the exam, but this result was reasonable in comparison with rates in the judicial exams in Japan.

11. The bar. In the historical introduction it will be seen that in the imperial times there were no advocates. Only after the establishment of the Republic in 1911 the profession was allowed. After the Mao period, the number of Chinese advocates (lüshi) increased from 3.000 to the actual figure which is still small in view of the 1,3 billion-strong Chinese population. Since 2014 the total number of advocates is approximately the same as that of the judges, this is to be precise 271.452, according to Stéphanie BALME.²¹ The practitioners are called State legal workers. Besides them there are locally also para-professionals (autodidacts), who in the time of Mao would have been called barefoot lawyers. Since 1986 a serious national examination exists and it has become more difficult to enter the bar. A law on the lawyers was enacted in 1996 revised in 2001, 2007 and 2012, with a deontological code and disciplinary rules. The title of the profession is protected. All China Lawyers Association (ACLA) is the official professional association for lawyers of the PRC (the bar association is American terminology). All lawyers of China are members of ACLA. The bar has no legal competence for self-regulation. The entrance to the bar is controlled by the Ministry of Justice. All practitioners must be members of the local bar, where they must register each year and pay their subscription. The legal firms too must get a license.²²

Big law firms have been rising rapidly in China. Despite the short history of its legal profession, China is now home to some of the largest firms in the global legal services market. This was not always the case. In 2002 no law firm had more than 100 licensed lawyers. Today, several firms boast thousands of lawyers, e.g. the three largest Chinese law firms Dacheng (Dentons in English), Yingke and King & Wood.²³

Issues relating to Chinese law must be referred to Chinese law firms, and foreign lawyers are prohibited from interpreting or practising Chinese law or from representing their clients in court. However, in reality many foreign law firms interpret law and manage litigation by directing the local firms they must have cooperative relationships with.

§ 5. The language obstacle

12. The Putonghua. The languages of China are the languages spoken by the 56 recognised ethnic groups, for instance Mongolian, Tibetan or Uyghur. The predominant language in China, which is divided into seven major dialect groups, is Hànyŭ, the language of the Han. There are many dialects. An inhabitant of Beijing, for instance, can’t understand one of Shanghai speaking his dialect. But only the pronunciation is different. Everyone can read the Chinese Han characters. Standard Chinese (known as Putonghua), a form of Mandarin Chinese, is the official national spoken language for the mainland and serves as lingua franca. Hong Kong or Macau have different official languages than the mainland (Cantonese, English and Portuguese).

13. The Written Chinese. It is not known when Chinese writing originated, but it apparently developed in the early second millennium B.C. The earliest known inscriptions, each of which contains characters incised on pieces of bone and tortoiseshell used for oracular divination, date from the Shang dynasty (18th-12th century B.C.), but by then it was already a highly developed system, essentially similar to its present form.

Written Chinese comprises Han characters used to represent the Chinese language. Chinese characters constitute no alphabet. Rather, a character generally represents one syllable of spoken Chinese and may be a word on its own or a part of a polysyllabic word. Literacy requires the memorisation of many characters: educated Chinese know about 4,000.

Simplified Chinese was developed in mainland China to make the characters faster to write and easier to memorise. By 1958 a phonetic script has been developed, called pinyin. Pinyin uses the Latin alphabet with a few diacritical marks, to represent the sounds of Mandarin in standard pronunciation.²⁴