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After the Communist victory in 1949, the People's Republic of China quickly abolished the ROC's legal codes and attempted to create a system of socialist law copied from the Soviet Union. With the Sino-Soviet split and the Cultural Revolution, all legal work was suspected of being counter-revolutionary, and the legal system completely collapsed.

Over the past century, there have been numerous constitutions in China.   The first attempts towards implementing a constitution in China were made during the final decade of the Qing Dynasty.  Several constitutions were subsequently promulgated by various controlling groups between that time and the establishment of the PRC.  The PRC had a provisional constitution from its inception until the enactment of its first constitution in 1954.  This initial constitution was based on the constitution of the Soviet Union.  It was shortly ignored, however, and became without legal force.  Although it provided that the National People’s Congress (NPC) would be elected every four years as the highest state power, these guidelines were not adhered to.  The second constitution of the PRC was modeled on the ideology of the Cultural Revolution and promulgated in 1975.  This constitution subjected the NPC to the Communist Party and removed previous constitutional protections such as equality under the law and private property succession rights.  It was also immediately disregarded through breaches of its provisions and in-adherence to guidelines regarding the NPC.  The third constitution of the PRC was adopted in 1978.  Although this version moved away from the ideologies of the Cultural Revolution, it did retain some remnants of it.  It also retained Communist Party control over the state structure.  However, reformists subsequently gained power, which lead to the breakdown of this constitution as focus shifted to economic construction and modernization.

With the start of the Deng Xiaoping reforms, the need for reconstructing a legal system to restrain abuses of official authority and revolutionary excesses was seen.  In 1982, the National People's Congress adopted a new state constitution that emphasized the rule of law under which even party leaders are theoretically held accountable. This reconstruction was done in piece-meal fashion.  Typically, temporary or local regulations would be established and after a few years of experimentation, conflicting regulations and laws would be standardized.

The current Constitution of the PRC was enacted in 1982 and reflects the model of the first PRC constitution.   The Constitution provides that leadership is through the working class, which in turn is led by the Communist Party. This Constitution also contains more extensive rights than any of the previous constitutions.  The rights include equality before the law, political rights, religious freedom, personal freedom, social and economic rights, cultural and educational rights, and familial rights.  These rights, however, are connected to social duties.  The duties include safeguarding the unity, security, honor, and interests of the country, observing law and social ethics, paying taxes, and serving in the military.  Neither the rights nor duties provided for in the Constitution are exhaustive.

The Constitution provides that the NPC is the supreme organ of state power over a structure of other people’s congresses at various levels.   The NPC has power to amend the Constitution by a two-thirds majority, promulgate legislation, elect and remove highest-level officials, determine the budget, and control economic and social development planning.  The NPC also includes a Standing Committee that functions much as the NPC does when the NPC is not in session.  Although the Standing Committee has had some powers since 1955, its law-making powers were initially provided for in the 1982 Constitution.  The NPC sits at the highest level in the hierarchy of governmental structure in the PRC.  This national level is followed in descending order by the provincial level (including autonomous regions and municipalities directly under the national level), the prefectural level, the county level, and the townships and towns level.  Government members at the lower two levels are directly elected, and those at the higher levels are elected by the lower levels.  In addition to the NPC, the provincial people’s congresses possesses legislative power and can pass laws so long as they do not contravene the Constitution or higher legislation or administrative regulations.

The Constitution states its own supremacy.   However, it has been theorized that the supremacy of the Communist Party means that the Constitution and law are not supreme, and that this perspective is the result of the Marxist view of law as simply a superstructure combined with a lack of recognition of rule of law in philosophical or historical tradition.  Although the Constitution provides for legislative, executive, judicial, and pro-curatorial powers, they are all still subject to Communist Party leadership.  Often, important political decisions are made through actions which are not regulated by the Constitution.  Additionally, courts may not rely on the Constitution in deciding cases, and they may not review legislation for Constitutionality.  Nonetheless the Constitution does provide the linguistic framework for conducting government affairs and describing them in the media.

Since 1979, when the drive to establish a functioning legal system began, more than 300 laws and regulations, most of them in the economic area, have been promulgated. The use of mediation committees, informed groups of citizens who resolve about 90% of the PRC's civil disputes and some minor criminal cases at no cost to the parties, is one innovative device. There are more than 800,000 such committees in both rural and urban areas.

In drafting the new laws, the PRC has declined to copy any other legal system wholesale, and the general pattern has been to issue laws for a specific topic or location.  Often laws are drafted on a trial basis, with the law being redrafted after several years.  This process of creating a legal infrastructure piecemeal has led to many situations where the laws are missing, confusing, or contradictory, and has led to judicial decisions having more precedental value than in most civil law jurisdiction.  In formulating laws, the PRC has been influenced by a number of sources including traditional Chinese views toward the role of law, the PRC's socialist background, the German-based law of the Republic of China on Taiwan, and the English-based common law used in Hong Kong.

Legal reform became a government priority in the 1990s. The Chinese government has promoted a reform it often calls "legalisation" (法制化). Legalisation, among other things, has provided the regime with a gloss of legitimacy and has enhanced predictability. There have been major efforts in the rationalization and strengthening of the legal structure and institution building in terms of developing and improving the professionalism of the legislature, judiciary and legal profession. As market reforms have deepened and social inequality has widened, legal forums - ranging from mediation and arbitration commissions to courts - have come to play an increasingly prominent role.

The 1994 Administrative Procedure Law allows citizens to sue officials for abuse of authority or malfeasance. In addition, the criminal law and the criminal procedures laws were amended to introduce significant reforms. The criminal law amendments abolished the crime of "counter- revolutionary" activity. However political dissidents are sometimes charged on the grounds of subverting state security or publishing state secrets.  Criminal procedures reforms also encouraged establishment of a more transparent, adversarial trial process.  Minor crimes such as prostitution and drug use are sometimes dealt with under re-education through labor laws. The PRC constitution and laws provide for fundamental human rights, including due process, but some have argued that they are often ignored in practice. (See Human rights in the People's Republic of China.)

The basic principles of Chinese legislative drafting include generality and flexibility. Sometimes excessive generality and omissions in Chinese law, coupled with the wide discretionary powers conferred on local authorities to implement laws, undermines the predictability and certainty of law. Furthermore, as Chinese law is intended to be educative, the language of the law is that of the ordinary language comprehensible to the average citizen, although many laws are drafted in broad and indeterminate language.

As a result of a pending trade war with the United States of America over violations of intellectual property rights of American corporations in the early 1990s, the People's Republic of China's trademark law has been modified and now offers significant protections to foreign trademark owners.

After the transfers of sovereignty, Hong Kong and Macau continue to practice English Common Law and Portuguese legal systems respectively, with their own courts of final appeal. In other words, Hong Kong and Macau are outside of the legal jurisdiction of the People's Republic of China, except on constitutional issues.

Due to the growing sophistication of Chinese laws, the expansion of the rule of law, as well as an influx of foreign law firms, China has also begun to develop a legal services market. Foreign lawyers have accompanied foreign capital and their clients to China which has had an immense influence on the promulgation of new Chinese laws based on international norms, especially in regards to intellectual property and corporate and securities law.

On July 1, 1992, in order to meet growing demand, the Chinese government opened the legal services market to foreign law firms allowing them to establish offices in China when the Ministry of Justice and the State Administration of Industry and Commerce (SAOIC) issued the Provisional Regulation of Establishment of Offices by Foreign Law Firms regulation.

As a result, many foreign law firms, including the United States'  Baker & McKenzie and Paul, Weiss, Rifkind, Wharton & Garrison, along with several British firms, incorporated consulting firms in their home countries or Hong Kong and then set up subsidiaries in Beijing or Shanghai to provide legal services.

However, there still many regulatory barriers to entry to protect the domestic legal industry. Issues relating to Chinese law must be referred to Chinese law firms and foreign lawyers are also prohibited from interpreting or practicing Chinese law nor representing their clients in court. However, in reality many foreign law firms interpret laws and manage litigation by directing the local firms they must have cooperative relationships with. In this regards China's restrictive legal market can be directly tied to a phobia of people asserting their legal rights in the face of rampant corruption. Information received from the State Council Legislative Office suggests that China may be allowing foreigners to sit the Chinese Lawyers Examination, or have a mutual recognition treaty with other countries to allow foreign lawyers to conduct non-litigation Chinese legal work.

While the trend in China’s legal landscape is to continue to open up the legal market, China’s laws and regulations have helped develop a number of domestic Chinese firms to specializing to meet demand of a booming economy. According to Asia Law and Business magazine China Awards, the top China firms were King & Wood PRC Lawyers, Commerce & Finance Law Offices, Fangda Partners, Haiwen & Partners, Jun He Law Offices and Lehman, Lee & Xu.