CHINA Law and Practice Contributed by: Chengchen Gan (Mark), Commerce & Finance Law Offices
8.2 Appointment of a Guardian In China, the appointment of a guardian usually involves the court, but it is not always necessary. The role of the court in the litigation process mainly serves as a safeguard in the appointment of a guard - ian. According to Article 31 of the Civil Code, if there is a dispute over the appointment of a guardian, the guardian shall be appointed by the residents’ commit - tee, villagers’ committee or civil affairs department of the place where the guardian resides. If the relevant party disagrees with this appointment, they may apply to the court for a judicial determination; the relevant party may also directly petition the people’s court for the appointment of a guardian. In addition to appoint - ing guardians, the court also continues to perform supervisory duties. Laws to protect children are future-oriented laws, and guardians undoubtedly play a crucial role in safe - guarding minors. The law has reinforced this notion by imposing stricter requirements on guardians. Parents are the legal guardians of their children. The PRC Civil Code stipulates that parents who fail to per - form their guardianship duties or who infringe upon the lawful rights and interests of the child may be dis - qualified by the court, and a new guardian shall be appointed. Social rights organisations such as schools, medical institutions, women’s federations, residents’ commit - tees, civil affairs departments, courts and other rel - evant departments are empowered to supervise the actions of guardians. These entities have the right to appoint guardians, be appointed as temporary guard - ians, and apply for the disqualification of guardians. 8.3 Elder Law Personal Pension In terms of policy, in order to cope with the increasing aging population, on 12 December 2024, the Ministry of Human Resources and Social Security, along with five other departments, issued the Notice on the Com - prehensive Implementation of the Personal Pension System. This initiative will expand the previously pilot - ed personal pension system from select cities to the whole country. The personal pension is a supplemen - tary pension insurance system characterised by vol -
Special Needs Trust In 2023, the regulator issued the Circular on Matters Relating to the Classification of Trust Business, which for the first time formally listed “Special Needs Trust” as one of the seven business varieties developed for wealth management, reinforcing the nation’s focus on the special needs population. A Special Needs Trusts is defined as a trust estab - lished by the entrustment of a single natural person, or jointly by a single natural person and their relatives, to manage and dispose of the trust property with the main trust purpose of meeting and serving the living needs of specific beneficiaries. These Trusts are main - ly designed for vulnerable groups such as minors, the elderly, and those with mental and physical disabili - ties. They utilise the risk-isolation function of the trust system to secure the incapacitated individual’s assets as well as to ensure they are being properly taken care of, effectively mitigating any potential moral risks for the guardian. For example, an “orphan trust” provides survival protection for incapacitated children whose parents may pass away before them. Social Guardianship Institutions Under the PRC Civil Code, if an adult with no or limited civil capacity has no guardian, the court will appoint the civil affairs department or other social guardian - ship institutions as the legal guardian. However, since guardianship requires a high threshold of experience, financial and other social responsibility, it is not a long- term solution to rely on a non-professional institution, such as the civil affairs department, to support vulner - able groups. In 2024, the courts in Shanghai issued a landmark rul - ing in the PRC, where a social guardianship institution was directly assigned to act as a guardian, replacing the civil affairs department. The court held that due to the high professional requirements and significant legal responsibilities, the civil affairs department shall delegate specific guardianship matters to, more pro - fessional institutions that have the necessary person - nel, time, and expertise. This jurisprudence empha - sises the increasingly important role that professional social guardianship institutions are expected to play in the safeguarding of special groups.
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