In the context of China’s legal system, judicial precedent refers to an existing set of practices within the judicial system that upper courts and attorneys alike expect judges to follow. An important theoretical distinction from stare decisis and jurisprudence constante is that lower courts are not bound to follow precedents until an appellate court or the Supreme Court formally adopts the precedent as an official rule. This may be done with interpretations, rules, or guiding cases issued by the court.

To understand the approach, it’s important to understand that China’s judiciary works differently from other jurisdictions because under organic law, its judiciary is a subordinate division under the executive, and in line with this approach, has expansive rulemaking authority similar to that exercised by administrative agencies. Thus, nothing is binding on the courts until judges proclaim it is binding.

A key practical difference from other jurisdictions is that the lower courts may spontaneously change how they interpret the law in absence of guidance from a higher court. This was done during the US-China trade war, where lower trial courts spontaneously and suddenly changed the law on layoffs nationwide in order to rapidly take action to prevent a spike in nationwide employment (more detail here).

However, the courts can also establish precedent without announcing binding effect by establishing an expectation or instruction to judges that cases be ruled on in a particular way. An example of this occurred in Siemens, a trademark dispute where the China Supreme Court announced a new precedent for an arcane rule of law with no political significance, and further published a separate article instructing lower judges in the precedent. (article translated here)

Terminology

From a linguistic perspective, Mandarin Chinese has no single word precisely meaning what “precedent” means as it does in European tradition, although it does have a word for stare decisis precedent. This is most clearly seen in the Chinese expression used to describe lack of political precedent “unprecedented” (前所未有), and other such expressions. Thus, in Chinglish, a commonly seen label is “judicial practice,” a highly direct and confusing translation that came about because of translators’ misunderstanding of the English word “precedent.”

The English word “precedent” literally means “preceding” things, a broad word and not necessarily legal terminology, but in Chinglish, “precedent” (判例), must be legal and must refer to stare decisis. Thus, China legal commentators unskilled in English, may accidentally deny that anything in China is precedented at all.