Overview of the PRC law system

The PRC Central Government

1. The PRC Constitution and Legislation Laws
2. Level of Authority
3. Relatively Large City
4. The Special Economic Zones
5. Division of Governance between Central and Local Governments

1. The PRC Constitution and the PRC Legislation Laws

The PRC Constitution Law specifically provides that the National People's Congress (the NPC) has the highest level of authority in the fields of law enactment and politics in China. The mechanism of division of power among the legislature, the administration, and the judiciary on a horizontal line in Western style is not applicable in the PRC. Article 3 of the Constitution Law refers.

The PRC Legislation Law provides that the legal instruments have the following levels of authority in the descending order:

1. The PRC Constitution;
2. Laws promulgated by the NPC and its Standing Committee; 
3. Administration Regulations enacted by the State Council and its Standing Committee; 
4. Provincial local regulation, municipal regulations, ministerial and semi-ministerial regulations;
5. Local regulations of relatively large cities, provincial local government decrees, decrees of municipal governments, and rules made by the bureaus under the ministries or commissions of the State Council;
6. Local government decrees of relatively large cities.

2. Level of authorities

In situation of inconsistency among different levels of authority, the higher level shall override the lower one. In situation of inconsistency among same levels of authority, the higher level in supervision of the two shall rule on which one to adopt.

An illustrative diagram of the above is contained under "authority of the PRC law, regulation, and rules."

International treaty and conventions, which the PRC government has concluded or acceded to, are part of the PRC laws. In situation of inconsistency, the international treaties and conventions shall prevail over domestic laws.

3. Relatively Large Cities

Under Article 63 of the Legislation Law, relatively large cities are defined as: -

1. The cities where the seat of provincial governance are located; 
2. The special economic zones; and 
3. The larger cities as approved by the State Council.

4. The Special Economic Zones

Article 65 of the Legislation Law provides that the five special economic zones (SEZ) and their respective governments are empowered to enact regulations that have legal force within the SEZs. The regulations passed by the people's congress of the SEZs have the same level of authority as local regulations of relatively large cities (level 5). The decrees made by the government of the special economic zones has the same level of authority as that made by local government of relative large cities (level 6).

5. Division of governance between Central and local governments

The ministerial regulations and rules have legal force over the whole country within the functional sectors. For example, the Ministry of Finance issued the "detailed implementation rules of the PRC VAT Tentative Regulations" that apply to all legal persons, individuals and other economic organizations engaged in prescribed taxable activities throughout the country.

The local provincial governments make decrees that have legal forces on all legal persons, individuals and other economic organizations within the provinces. For example, the "Guangdong provincial labor regulations" issued by the Guangdong provincial government shall apply to all cities and towns throughout the province, with the exception of the special economic zones located within the province, and the city of Guangzhou where the seat of governance is located.