Rule of law requires a judiciary that is independent, competent, and enjoys sufficient powers to resolve disputes fairly and impartially. China's judiciary falls short on each of these three dimensions.

As a matter of law, the PRC Constitution provides that the courts shall “in accordance with law, exercise judicial power independently and are not subject to interference by administrative organs, public organizations or individuals.” The Judges Law sought to strengthen the independence of the judiciary by providing that judges have the right to be free from external interference in their work. In addition, judges were given the right to raise a complaint if a state organ or official committed an act infringing on their rights, and administrative entities, public organizations, and individuals may be held liable for interfering in particular cases.

Under the PRC's unitary system, however, the courts are administratively and institutionally accountable to the corresponding level of people's congresses that created them, as stated in Article 128 of the Constitution. In addition, courts are subject to the dual leadership system, like any other entity. Thus, courts are subject to the Party Committee and other Party organizations at the same level, as well as to supervision by higher-level courts. The procuracy also exercises supervision over the judiciary, leading to the curious situation where procuratorates are subject to the authority of the court when they appear before the court as a prosecutor and yet they have the authority to challenge the “final” decisions of the court.