Since 1978, the economic reforms that were undertaken by China gave rise to a very huge wave of crime. In the year 1950,513416 crimes were recorded in the People’s Republic of China. The figure eventually dropped to 57,482 crimes by the year 1952.Since the reforms; the crime rate has been increasing steadily to 80,000 juvenile arrests in 2007. These are just facts about the impact of the economic reform on crime rate (Butler 34). This can be credited to the fact that with the economic reforms, many people were in need for money and due to unemployment, many could not afford to get the money and hence turned to crime as an alternative way of getting the money. In this paper our main focus will be on how the legal system helps to maintain the economy though it was important for us to know the effect of economic reforms on crime rate. We will look into the relationship between labor laws and the economy, how the laws and other regulations affect the imports together with exports of the country and the other legislations and their impact on the businesses and the economy at large (John and Yamping 23).
On the labor laws and its effect on the economy, we will start by looking at the effects labor laws have on economic growth. China has been enacting laws to protect personnel from exploitation by the foreign companies (Dreyer 212). Such exploitations include; overworking without overtime payments, underpayments of wage workers and poor working conditions among others. During New York periods they reported on 13th October, 2006.The government of China facilitated the enactment of the law to capture those manufacturers who were violating the rights of their workers and overworking them (Tanner 502). The proposal would make it hard if not possible to sack workers but this condition was disputed by most of the foreign owned companies. This situation created some anxieties among investors-mostly foreign investors-and it threatened to slow down the economic growth of the country (Levinson 100). The good thing with such laws is that it reduces the huge profits which could be taken abroad by the foreign companies at the expense of the local workers and also increases the wage income of the country thus having a positive impact on the GDP growth of the country (John 26).
The other area where the legal system assists the economy is the area of global trade. The legal system has laws which protect the local industries against dumping. A product is said to have been dumped in a country if it is sold in that country at a price which is lower than the market price of that product in the mother country (its worth) These laws help the native industries against cheap imports mostly from 1st world countries which have subsidized their industries. These measures help to reduce imports into the country and increase import substituting products. This helps to improve the pace of economic development in the country.
The other laws that have an effect on the economy are the environmental laws. They do affect the economy in the sense that the economy relies on the ordinary resources which are being provided by the environment while the economic activities have an effect to the natural environment in terms of the waste products of the economic activities which are being discharged into the environment. The ecological laws assists in conserving the natural property for the future cost-effective activities hence fulfilling the perception of sustainable economic development (Yash 22).
In conclusion, we can say that the legal system helps the economy in that it creates institutions which help to settle disputes arising as a result of the scarcity of resources as people or institutions fight over the scarce resources (Bin Liang 209). The legal system also helps to remove the imperfections created by the collapse of the trade systems like externalities. For instance, an externality resulting from a company which pollutes a river hence affecting other users downstream can be corrected by use of environmental laws (GOH 24).
John W. Head and Yamping Wang. Law codes in dynastic China. North Carolina: Carolina academic press, 2005.
John states the relationship between labor laws and the economy, how the laws and other regulations affect the imports together with exports of the country and the other legislations and their impact on the businesses and the economy at large.
John W. Head. China’s legal soul. Durham North Carolina: Carolina academic press, 2003.
Here John shows how huge profits could be taken abroad by the foreign companies at the expense of the local workers and also an increase in the wage income of the country thus having a positive impact on the GDP growth of the country.
Yash Ghai. Hong Kong’s new constitutional order. Hong Kong: Hong Kong University press, 1997.
Ghai gives the importance of ecological laws by noting that they help in conserving the natural property for the future cost-effective activities hence fulfilling the perception of sustainable economic development.
GOH Bee Chen. Law without Lawyers Justice without Courts. England: Ashgate publishing limited, 2002.
GOH compares the legal system created by the collapse of the trade systems like externalities. For instance, an externality resulting as a result of a company which pollutes a river hence affecting other users downstream can be corrected by use of environmental laws
Butler W, E. The legal system of Chinese Soviet republic 1931-1934. New York: Transnational publishers Inc, 1983.
Provides the reason why there was need for money among the people. Due to the low levels of unemployment, people resorted to unlawful ways of acquiring money. Butler states how the legal system is used to maintain the economy.
Dreyer June Teufel. Political System in China.2nd Ed. New Orleans: Allyn and Bacon, 1996.
Dreyer states the resultant effects of the labor law in the society He looks into the laws that have been enacted by the republic of China so that the personnel are not exploited by their employers.
Levinson David. Crime and Punishment. New York: SAGE Publishers, 2002.
Levinson states how the government formulated a law to deal with the employer who violated the rights of the workers. He however, notes that the situation brought about a lot of concern among the employers and how the situation brought down the level of economy.
Bin Liang. The Changing Chinese Legal System. New Jersey: Routledge 1978.
Bin Liang notes how the legal system is a crucial element in any given economy. He says how the disputes can solved easily due to the presence of the rightful legal system.
Tanner Harold Miles. Crime and Punishment in China. New York: Columbia University Press, 1994.
Harold states how the government of China has enacted laws to protect the employees from exploitation. He gives examples of the forms of exploitations that the workers experience which include underpayment among other harsh working conditions.