Duke Law in China: Making a Difference
By Frances Presma
Making a Difference...
Has Duke Law School been effective in its contribution to the legal system and
profession in China? Wang says it has, without question.
"I am personally grateful, but objectively speaking, Duke really did a fantastic job as one of the first to establish such a regular and consistent program. Duke's alumni have played important roles in the changes in China–Gao Xiqing, in particular, will be in the history books."
Professor Jonathan Ocko agrees. "Our alumni have gone back, they've lectured, they've brought their skills, and they've brought the models of how to do business and law back with them. In the long run, they have made a difference." Alumni like Li, notes Ocko, while not practicing as Chinese attorneys–they suspend their licenses while employed by foreign firms–are consulted by legal officials for their expertise. “Ma Hongli '89, the managing partner of a major Chinese firm, played a central role in drafting the canon of legal ethics for his firm, and has been active in the Bar Association in Shanghai. These people really have a chance to make an impact.
A few years ago, I was talking to a Chinese businessman who had no connection to Duke. He said, ‘It seems you can't be involved in a complicated or complex large-scale business transaction in China without running into one of Duke's Chinese alumni.' That in itself is a fairly significant contribution.
He also recalls how students from Tsinghua and Peking University Law Schools thanked him for Duke's commitment to the legal profession and the law in China when he spoke to them in 1999.
"One of them actually raised his hand in the middle of my talk and said I should tell Duke that they appreciated what it has done over the years."
Niu Wenjie '05 credits the Law School specifically for having a profound influence on the development of Chinese security law and regulations. She took leave from her position as director of the law division of the China Securities Depository and Clearing Company ("China Clear") to enroll in Duke Law's LLM program, and was previously the deputy director of the law division of the Shenzhen Stock Exchange, China's first. She has also been on the teams charged with drafting and revising Chinese securities and investment fund laws.
"Professor Gao is in many ways the father of Chinese securities markets, and for having taught him, Professor Cox has also had an important influence," says Niu, who has a high enough profile in her own right to have been invited to address the international law section of the American Bar Association in Washington, D.C. on that subject last April.
Deflecting the compliment, Cox remembers his early discussions with Gao and his classmate, Shi Xi-min, about the role the law plays in developing countries, and the importance of getting savings "out of tin cans"–since the banking system was unreliable–and flowing into development projects.
"What the law does is provide some assurance that individuals who put effort in, or invest money, have every reason to expect that they can appreciate the risks of doing so, and that they can measure what the rewards are for embracing those risks. The more trustworthy that process is, the sharper the judgments will be that investors make, and that ultimately will lead to putting assets and resources to their highest and best use. It's really important in a developing economy to get money flowing into the markets. That is what will develop the productive resources to improve the life of everybody in the society."
Cox calls the early 1980s "truly the wild west" for capital markets in China. "They were developing informally and without regulation–there were no corporate or securities laws. As a result, they were largely ineffective and inefficient, and always under the threat that they could be snuffed out very quickly if the central government decided that this was not the way it wanted to go."
While he takes no direct credit for influencing Gao, Cox is certain that Gao paid close attention to his message on the cornerstones of U.S. securities law: transparency, predictability, and enforcement, the right level of sanctions, and the right level of funding for the enforcement agencies.
When you talk to Gao, he has a strong sense about what business people want to do, and then tries to figure out how regulations compliment those interests, and still serve the public interest. I don't know how much credit we can take for that, but it's not inconsistent with the message that was drilled into him while he was at Duke.
Cox has not limited his message on openness to his classes. A few years ago, he participated in a program in China for the Organization for Economic Cooperation and Development, the whole purpose of which was to try to encourage the government to commit more to strengthening the enforcement of the securities rules. "The belief was that development would be stimulated if they had strong securities laws."