Legal Framework of Automatic Vehicle Production, Test and Circulation in China: Brief Introduction

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Legal Framework of Automatic Vehicle Production, Test and Circulation in China: Brief Introduction

By Valentino Lucini*

Introduction:

Recent reports of the Chinese Ministry of Public Security says that the number of vehicles in China reached 310 million[1] and won’t stop growing any time soon. Such a large number of cars in the country led to economic, health and social problems including traffic jams, petrol consumption and air pollution by exhaust emission. Both traditional vehicles manufactures like Audi and new manufactures like Tesla have found that self-driving cars (or intelligent vehicles) may reduce those problems and increase citizens’ quality of life. However, this is not just a mere technological development issue but a source of legal concern, considering the fact that the current legal framework concerning transportation in most countries was crafted around traditional vehicles.

The Chinese Government has published a series of documents for encouraging auto-driving cars, for example, the final Guidelines for the Establishment of National Standards System of Telematics Industry (Intelligent & Connected Vehicles) 2018 (the Guideline) [2], and the Implementation Scheme of Key Technology Industrialization of Intelligent Vehicle[3] (the Scheme). The Guideline not only sets national standards for China’s Intelligent & Connected Vehicles (ICV), but also boosts the reform of legal documents related to it. The aim of this article is to briefly analyze the current situation of the Chinese legal system toward self-driving cars in order to have a better understanding of the matter and its possible evolution under Chinese Law.

The Electric Map and High-precision Mapping Service


In a driverless journey, for a vehicle to reach a place safely and comfortably without human control, sensors and radars have to work constantly for detecting the surrounding environment, making a precision map for the vehicle as well as controlling acceleration, breaks, and lane changes intelligently. Unlike the meter level resolution ratio of traditional electric maps, high-precision maps have to be extremely precise and reach details closer to centimeter level. For auto-car suppliers, the development of high precision maps is not only a technological challenge, but also a legal concern.

Like other countries, high-precision map development is strictly regulated under PRC Law due to homeland security, border control, state secrets, and privacy protection concerns. Based on that, the Chinese laws and regulations only permit authorized mapping service to be used by local and international manufacturers in producing and marketing auto-vehicles in China. According to the Notice on Strengthening the Production Test and Application Management of Automatic Driving Map[4], automatic driving map is a new type and an important part of navigation electronic map, so the data acquisition, editing, processing and production must be undertaken only by units with surveying and mapping qualifications[5]. There are only 14 companies that at moment of publication of this article received the A-level qualification for navigation of electrical mapping service[6], which means that those are the only authorized enterprises which could make navigation of electric maps for Intelligent Vehicle in China. Violation of such authorization process is not taken easily by local law enforcement authority considering that the illegal electric mapping service may bring severe criminal penalties including imprisonment. In this regard shall be seen the First Intermediate People's Court of Beijing ruling against an American geologist who was sentenced to eightyear’s imprisonment after being caught trading geographic and coordinating information of about 30,000 China's oil wells. The scale of the infringer makes no difference, as can be seen toward the case of international giant Coca-Cola, which was investigated by Chinese authorities due to the fact that its staff was “illegally collecting classified information with handheld GPS equipment”[7], according to the announcement. All in all, the electric mapping service is highly surveilled and companies who wants to provide such service or products must achieve the relevant authorizations beforehand.

Not only the mapping service production, but also the editing and publishing of electric map activities are strictly controlled by Chinese government as well. According to the Notice of Regulations related to Navigation Electric Map Management from National Surveying and Mapping Bureau[8] , the editing, processing, quality measuring all belong to navigation electronic map production activities and shall be implemented only by authorized companies and institutions[9]. In addition, any map edited shall be reviewed and approved by National Surveying and Mapping Bureau before publishing. Navigation electronic maps, which have not been approved by the National Surveying and Mapping Bureau in accordance with the law, shall not be published, displayed and even used publicly[10].

The whole procedure including mapping, editing, and publishing of electric navigation maps shall be supervised strictly by National Surveying and Mapping Bureau. For companies who want to be involved in auto-driving cars and electric map business, the current legal regulation seems too strict for them. Besides, not only the legal world raised suggestions to overcome the above regulatory burden, but also the business world in China is quite sensitive to the matter, as shown by Mr. Li Shufu, the chairman of one of the Chinese largest car manufacturers, which submitted two proposals in 2017 to the Chinese People’s Political Consultative Conference, one of which was called “Open the mapping service with prudence and cautious attitude, and reducing the development barrier of automatic driving technology in China”. In this proposal, he suggests that “the regulations for electric mapping service qualification shall be conditionally opened for automatic driving car manufacturers in advance” and “the homeland security shall be protected, and at the same time, the geographic information, as a kind of public information shall be orderly promoted”[11] .

Road test regulations in China

Besides the electric map, the road test regulations for the auto-driving cars shall be published in order to develop automatic driving technology and regulate road test activities. Many countries like US, Germany, the UK and Singapore have published their laws and regulations in order to standardize road test in their countries. However, in China, road tests using all public lanes are not allowed under current PRC’s Highway Law and the Regulations For The Implementation of The Road Traffic Safety Law[12]. In this regard, a 5.6 km specific road in Shanghai Jiading District is considered suitable for testing. To complete the road test legal framework in China, there are only two cities which allows it: Beijing and Shanghai. From Beijing side the regulations were published by Beijing Transportation Committee, Beijing Traffic Management Bureau and Beijing Municipal Commission of Economy and Information Technology called Guidance on Speeding up the Road Test Related Works for Automatic Driving Vehicles in Beijing (Beijing Trial Implementation)[13], and the Guidance and Detailed rules for the implementation of road test management for automatic driving vehicles in Beijing (Trial) (the Beijing Rules)[14] to be considered. On the other side the Shanghai Municipal Economic Information Commission (SMEIC), Shanghai Municipal Public Security Bureau (SMPSB) and Shanghai Municipal Transportation Commission (SMTC) jointly issued the Shanghai Regulations on Intelligent and Connected Vehicles Road Testing (Trial) (the Shanghai Rules)[15]. These regulations clarify several significant aspects of self-driving cars’ road test as follows.

a. The supervision authorities of road test.

According to the Beijing Rules, the Automatic Driving Road Test Management Joint Working Group (the Group)[16] which is authorized by Beijing Municipal Government and established jointly by Beijing Transportation Committee, Beijing Traffic Management Department, and Beijing Municipal Commission of Economy and Information Technology, shall lead the road test related work. The Organization shall cooperate with committee of experts in various fields such as transportation, communication, vehicles, electrical industry, computer science, legal and others, and be responsible for assessing the technology and the application of the automatic driving test in Beijing and issuing expert’s opinions[17]. A third party entrusted by the Group shall be responsible for the supervision of the whole process of the road test including accepting the road test application, organizing experts’ evaluation, tracking of test process, data collection, daily supervision, etc.[18].

As per the Shanghai Rules, a new testing regulatory body will be jointly established by SMEIC, SMPSB and SMTC which will be in charge of implementing road tests. Together with this new entity, the Shanghai Manufacturing Innovation Center will be the examination institution for testing applications, collection and analysis of data and their transfer data to the platform established on the testing regulatory body.

b. The application of the road test.

 The Rules sets comprehensive application requirements for applicants.

1)    Application requirements for test cars.

Both the Beijing and Shanghai Rules indicates the requirements for auto-driving cars. For example: the test cars shall be equipped with a test driver, and safety alert system which could alert the drivers to control the test cars when there is an self-driving system malfunction.

Vehicles are also required to be able to switch between self-driving and conventional modes so that the test driver can take over the car for any reason (including malfunction).

Given the nature of the test, comes as no surprise that the rules require test vehicles to be able to monitor the status vehicle online and transfer in real time information relating to the test (including speed, acceleration, control system, localization, etc.). Information shall be recorded and stored for a certain period prior to any accident and the vehicle shall be equipped with warning systems to inform the driver in case of problems.

In both Rules, test applicants can apply for five vehicles for testing in one application. This reduces dramatically the approval procedure and testing for new models.

2)    Application requirements for test subjects.

Generally, the test subjects shall provide the basic documents about the test cars, the instruction about the auto-driving system, the supervising instruments for daily supervision from third party, the data recording system (which works like the black box in civil airplanes), etc. Both Rules also state that the test subjects shall have enough economic capabilities to compensate the damage which may be caused by the road test. The minimum requirement for such economic capability is a RMB 5 million commercial insurance, and the test subjects should provide relevant insurance or letter of guarantee and submit the Self proof of Compensation Capability of Test Subject as prove[19].


A difference between Shanghai and Beijing is that the former also requires a test subject to have the relevant capability in technology R&D, manufacturing or testing of vehicle and components, assessment program for closed area and road testing, and remote data monitoring platform for test vehicles, whereas the Beijing one requires provision of a statement for the test car and self-driving system and to maintain a data recording system.

3)    Application requirements for test drivers.

Both Rules indicates the requirements for test driver among which it is mandatory for the latter to have signed the labor contract with the test subject and be qualified drivers with driving licenses. The test driver shall also have at least 3-year safety driving experience including no record of drinking, drug and other dangerous driving activities. Therefore, we are still far away from testing of auto-car without real driver.

The above are few of many articles listed in both Rules and related to the application of road test for self-driving appliers, which cover also the whole application process.


c. The auto-driving test management.


This part in the Rules mainly regulates the specific road test process. For example, Article 17 of the Beijing Rules indicates that the road test shall be held in designated road and terms; Article 18 provides that the supervision instruments shall be installed, and the test process shall be recorded by a third party whereas Article 19 specifies that the license of test vehicle shall be regulated by temporary vehicle license management related rules; etc. Similar rules are implemented by the Shanghai Rules.


In Shanghai the regulatory body will generally issue a test notice letter to qualified test subjects which specifies all details related to the test, including car, period, road and drivers. Such right of testing usually lasts for 6 months with the possibility of a 6 months extension


d. Liabilities for violation of the rule


This part of the Rules mainly introduces the liabilities for violation of regulations. Both Rules provides that the third-party which is authorized by the Group as mentioned before, has right to withdraw the test qualification and publish relevant punishment list if the test subject violates the Rules, the third party would not accept the application from that subject for one year. Test subject shall take responsibility for the validity and legality of all documents and statistics they submit otherwise, the third party has right to cancel the test qualification and no longer accept the application from that subject.


The above rules and regulations can be considered as the milestones in self-driving cars’ history in China which clearly shown a pro-active attitude by the Chinese government in issuing laws and regulation to manage the road test in the coming future. It is incredible to see that in July 2017, Baidu company (well-known search engine in China), after testing a self-driving vehicle in public road in Beijing, received administrative punishment due to unregulated activity but today, just after less than a year, the same activity is permitted thanks to the Chinese Government’s quick response to the auto-car industry’s need.


Liability for traffic accident

Under current Chinese road safety and traffic legal framework, the liability for traffic accident is regulated by PRC Road Traffic Safety Law and other related laws and regulations. According to Article 22, motor vehicle drivers shall abide by road traffic safety laws and regulations, and drive the vehicle safely and courteously according to the operation rules. Article 76 concerns the liability allocation of a traffic accident: unless the non-motor vehicle or pedestrian intentionally caused the accident and the motor vehicle is not required to bear liability, the motor vehicle, depending on specific cases, shall bear compensation liability, and if the motor vehicle driver has taken necessary measures, the motor vehicle's liabilities may be mitigated[20]. The PRC Tort Law makes reference to the Road Traffic Safety Law regarding liability distribution making the latter de facto the only specific applicable law in such circumstance[21]. A legal interpretation of Tort Law provided by PRC’s Supreme Court further clarifies the ratio of compensation in a traffic accident: unless the accident is caused intentionally by driver of non-motor vehicle or pedestrian, the motor vehicle drivers shall not bear liabily, the motor vehicle shall bear at least 10% of liability[22]. As can be easily understood, this interpretation, which works as a valid legal document under Chinese legal system, was issued in order to protect the relatively weak party in case of an accident which is the non-motor vehicle or the pedestrian respectively.

But one question remains: in case of self-driving vehicles, should the car driver take responsibility for the accident beyond or under his/her limited control?

Before addressing this issue, it is important to highlight that there are different levels of self-driving capabilities of vehicles. For example, the Guideline divides the auto-driving technology into 5 levels depending on the AI and technology involved: DA (Driving assistance); PA (Partial auto-driving); CA (Conditionally auto-driving); HA (Highly auto-driving); FA (Fully auto-driving). Vehicles within DA or PA require the drivers to actually control the steering wheel and accept information from on-board electronic system. But vehicles equipped with CA, HA and FA allows the on-board electronic system to actually drive the vehicles and drivers just need to monitor the traffic situation. Different participation degree of the driver may raise different levels of distribution of liability in case of accident.

As consequence of the above, due to drivers being involved in controlling the vehicles; the liability in case of accident with DA, PA CA auto-driving system is regulated by the current Road Safety Law and Tort Law[23]. But liability with HA or FA system in a car accident shouldn’t fall under the same, because the driver may not actually drive the vehicle when the accident happens. Moreover, if the vehicles with HA or FA violate laws and regulations intentionally or accidentally, who should bear the above liability, the driver or the car manufacture. The current legal system does not regulate these circumstances, but considering the fast development self-driving technology, increasing investments by Chinese and foreign car manufacturers and the above-mentioned social and economic problems caused by normal vehicles, we are expecting the Chinese Government to speed-up legal development and remove legislative barriers in the coming future.

Conclusion

On 26th December 2017, the National Development and Reform Commission published the Three-year Action Plan to Enhance the Core Competitiveness of the Manufacturing Industry (2018 -2020)[24] with annexed Scheme. The Scheme sets ambitious target for developing national intelligent vehicles in China from 2018 to 2020[25] by predicting that “by 2020, more than 50% of new vehicles will be equipped with DA, PA, CA systems to meet the demands of construction of city intelligent transportation, by 2025, 80% of new vehicles will be equipped with DA, PA, CA systems”[26] . What the Chinese government is doing now, is trying to avoid falling behind competitors in auto-driving vehicle industry. According to the Innovation and Development Strategy of Intelligent Vehicle (Draft for advice)[27], the ICV industry has become a strategic development industry for China for its boundless future. It is not difficult to predict that the Chinese government would publish more guidelines and documents to promote the development of auto-driving vehicles in the coming future.


[1]http://news.youth.cn/gn/201801/t20180115_11287328.html

[2] In Chinese 2018 国家车联网产业标准体系建设指南

[3] In Chinese智能汽车关键技术产业化实施方案

[4] In Chinese关于加强自动驾驶地图生产测试与应用管理的通知

[5] Article 1 of Notice on Strengthening the Production Test and Application Management of Automatic Driving Map.

[6] In Chinese导航电子地图甲级测绘资质. http://www.sbsm.gov.cn/hdjl/wyly/201710/t20171015_398047.shtml

[8] In Chinese国家测绘局

[12] Article 51: Highway roads are not permitted to be used by motor vehicle manufacturers and other units as testing ground for tests of braking of motor vehicles.

Article 82: Highway roads are not permitted to be used by motor vehicle as follows: … (5) road testing or learning how to drive.

[13] In Chinese 北京市关于加快推进自动驾驶车辆道路测试有关工作的指导意见(试行)

[14] In Chinese北京市自动驾驶车辆道路测试管理实施细则(试行)

[15] Issued on 27 February 2018.

[16] In Chinese 北京市自动驾驶测试管理联席工作小组

[17] Guidance on Speeding up the Road Test Related Works for Automatic Driving Vehicles in Beijing (Trial Implementation) Section 3: liability subject

[18] Article 6 of the Rules

[19] In Chinese测试主体赔偿能力自证明

[20] Article 76 (2), (3) of PRC Road Traffic Safety Law.

[21] PRC Tort Law Article 48: Compensation liability shall be assumed for damages arising from traffic accidents involving motor vehicles according to the relevant provisions of the Law on Road Traffic Safety.

[22] Article 86, 87 of the legal interpretation of Law on Road Traffic Safety.

[24]In Chinese增强制造业核心竞争力三年行动计划(2018年-2020年)

[25] Main tasks have been set according to the Scheme, which are 1. Establish fundamental technology system and database of intelligent vehicle; 2. Break through significant common technology for intelligent vehicles; 3. Develop information security technology of intelligent vehicle; 4. Improve the significant hardware or software of intelligent vehicles; 5. Update technology of the engine system; 6. Improve the road test framework; 7. Start the demonstration of the operation of intelligent vehicles; 8. Enhance the intelligent vehicles’ innovation ability; 9. Promote integration development of the intelligent vehicles between military and civilian.

[27] In Chinese 智能汽车创新发展战略(征求意见稿)

 


 

* Mr. Valentino Lucini is an Italian and Spanish lawyer working at Wang Jing & Co. (Guangzhou and Shenzhen offices) as of counsel.

photo
Guangzhou,
Wednesday, May 30, 2018
Administrative Law, Torts, Product Liability