Wednesday, February 18, 2009

Sichuan Earthquake (Republish)

Closely following the news in and outside China on the Sichuan earthquake, I elected to avoid blogging about it as I thought any writing from me will be, largely, irrelevant to the suffering of the victims and China in general. In addition, other China law bloggers, such as the CLB and China Esquire, have provided information on how to donate for the disaster relief in China. However, after my arrival in China on May 16, 2008, I have experienced first hand the blanketing media coverage of the events and stories unfolding constantly in the worst hit areas in Southwestern China. With the information that I have been exposed to and gathered, I feel that I could offer some of my observations and impressions without trivializing the gravity of the tragedy.

Since May 12, 2008, earthquakes have sent shock waves of destruction, grief, honor, hope and courage across China and around the world. Both Chinese and international media have intensely covered the disaster relief work, and if any of my impressions mirror what readers have already heard or read, please accept my apologies.

1. People’s Response is unprecedented. China is prone to disasters, natural and man-made. In the past, disaster relief was a matter of governmental concern, so the common man usually stayed on the sidelines, watching how the government took care of business. This quake changed that. Everyone seems genuinely impacted and concerned, and they have turned that concern into real action. The first comment I got at the Shanghai Pudong Int’l Airportwas—“Be sure to donate for the quake victims.” My father, with whom I have not talked inside China for about eight years, posed his first question to me upon my arrival—“Have you donated?”

Along side corporate and international donors, the average Chinese people at least in the cities are contributing as well. This is, in my opinion, a healthy and monumental development. After all, in a country with so many present and potential issues, a growing sense of civil/social responsibility and personal engagement could play a very positive role in solving problems that the government could not easily do alone.

2. The Chinese media coverage is less monotonous and a bit more colorful. In the past and usually, media coverage of disaster relief in Chinacharacteristically focused on which leader/official went where, said what, and brought whatever assistance…This time around, expectantly, there is still lot of that. But, I am often quite moved by stories of the average relief workers and amazing survivors. Reportedly, a mother died with her body firmly arched over her baby, who survived unscathed with a parting text message from the mother saying something to the effect of –“Dear baby, if you survive this, please forever remember that I love you.” In addition, stories about courage and sacrifice of students and teachers abound. Many victims gave up critical moments of survival so that others could escape collapsing buildings.Undoubtedly, officials and leaders sacrificed as well in a disaster of such magnitude, but, it is the tales of raw courage, love, and hope demonstrated by the common man/woman that lift people up in a difficult time such as this.

3. Tax Relief. The Chinese treasury and Central taxation authority have jointly issued guidance on tax breaks for recipients and donors of disaster-relief funds. Victims will not be taxed on their gift/relief income and donors will receive, in return, tax deductions. This quick, policy-driven response reflects the government’s flexibility, which will hopefully sustain the generous flow of donations.

4. Housing Challenges. With millions of people rendered homeless by the earthquake, the enormous problem of housing these displaced and homeless people looms. In a few months, the media coverage will soon turn its attention to the Beijing Olympic Games and other news-worthy events, but the quake victims will still be living in their tents. Similarly, businesses have also been hit or destroyed. Without a stable income, the victims must live at the mercy of the government and donors, and they must face the daunting task of rebuilding their homes and lives. How can that be done? Will the government subsidize the entire reconstruction of all the disaster areas? Even if the government does, how can corruption be avoided in allotting funds and rebuilt apartments? These are indeed challenging issues for the victims, local governments and Beijing.

5. Existing Mortgages of Destroyed Housing. What will happen to them?Assuming that most homeowners (quake victims) did not purchase mortgage insurance, which is likely to be the case given the relatively less developed economy of these areas, will they still be obligated to pay off their mortgage absent some kind of administrative exemption? Creditors, especially secured ones, want their debts paid, but victims of this quake have neither a home nor stable income. Therefore, I don’t see them having the ability nor the willingness to pay.

6. Liability for Shoddy Buildings (Schools, especially). I see a lot of tort claims arising from the shattering of the school buildings. Policy-wise, how will the courts/government (looking from a common law tort law perspective) analyze the foreseeability and causation issues? As we all know, current technology is not sophisticated enough yet to provide advanced warning of earthquakes, so the tort feasors would argue that such events are unforeseeable, thus escaping liability. But, victims could argue on the theory of negligence per se since they might be able to prove construction code violations with some expert testimonies. In addition, it is not entirely impossible for the Chinese tort law to adopt a strict liability stance on the building of school houses, in light of the disproportionately large number of schools demolished by the quake. So, I think that this powerful earthquake could potentially have a long-lasting impact on liability law in China, and that is not necessarily a bad thing.

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