law - Testing an emerging civil society

(later today at Chinabiz)

A legal landmark was set on October 12 as the Ningbo company Aux took a court case against the Ministry of Information Industry (MII) not only to court but also to the Chinese media. Aux uses the Law of Administrative Permission, in force since July of this year, meant to curb arbitrary decisions by government departments that cause damage to companies or individuals.
Aux was the only of a group of mobile phone producers who took this step, after MII refused the company for the fifth time a license to produce mobile phones in an already two-year old struggle.
Suing government departments has been on the legal agenda of the central government for a long time. Already two years ago the Supreme People’s Court issued a circular saying that the government could be sued on economic issues, but then large uncertainties remained on whom could sue what government department on what issues and in what courts.
Those issues seemed to have settled now, but actually taking a government department to court means a larger cultural breakthrough in China, one reason the media are reporting extensively about this MII-case.

At first view the Ningbo company seems to have a strong case, as the cell phones do not belong to the group of 700 items that need administrative permission from the government under the Law of Administrative Permission, writes the Beijing Morning Post.

"Cell phones do not need an administrative permission project, but also not excluded from such a permission, the nature is still not decided." Defended Xi Guohua, vice minister of MII, to Beijing Morning Post in an interview in August the ministry’s decision in an obvious attempt to retain control over a larger field than the new law requires.
"From a long time perspective, the cell phone license will be free available, it's just a matter of time." said Xi. The cell phone market is already very competitive, if the license is free, it will create overcapacity in the market, a matter of concern to MII.

The famous economist Wu Jinglian criticized this move by MII in an interview with the Beijing Morning Post on Thursday. "There is a bad tendency, the power of government departments to allocate resources seems to be strengthening, and the power of market is diminishing," said Wu.
"Any administrative permission without going through the National People's Congress is illegal. There were thousands of administrative permissions in the past. To keep consistency, the State Council did the cleaning and kept 700 of them. Obviously wireless communication equipment is not in the list of 700." said Wu.

According to law a court has to decide within seven working but the Beijing No.1 Intermediate Court is already lingering on the issue for two weeks now. "Without a structural reform of the government, it's not possible for us to establish and perfect market economy." said Wu.

Professor Zhang Shuyi of China University of Political Science and Law, one of the experts who drafted the law of administrative permission, said that Aux will for sure win the case and he is willing to appear in court to support Aux.

In July a Nanjing lawyer won a first case when the State Administration for Industry and Commerce initially refused him a licence to provide trade mark services.