Despite the trials thrown up in 2020, China has never stopped moving forward with legal reforms. Frankie Wang explores areas that have confused some companies, and seeks clarity from the experts

Amid economic headwinds, a continuing pandemic and ongoing friction with the US, China is still progressively improving its legal system as new laws and regulations are enacted. The Foreign Investment Law took effect at the start of the year, followed by China’s first Civil Code, which was approved at the end of May and will come into force next year.

The Supreme People’s Court (SPC) recently issued the Guidelines on Improving Search for Similar Cases to Standardize the Application of Law (Trial), which was implemented from 31 July this year. The guidelines stipulate that, in circumstances including being faced with cases without clear judgment rules or consensus rules, the judges shall search similar cases and compare the present case with precedents with similar facts.

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Nevertheless, the Civil Code will impact companies from market entry to exit, and it remains fundamental to their operation and development. For a look at the concerns of in-house counsel surrounding the Civil Code, see Toil and trouble.