Chinese Law and Development (CLD): The Strategic Role of Nonlegal Norms in the Cross-Border Economic Order

Abstract Matthew S. Erie’s Chinese Law and Development (CLD) framework identifies nonlegal norms as instruments for risk mitigation in China’s transnational governance. However, the mechanism by which these norms transform into institutional effects remains underexplored. The present study contends that nonlegal norms – such as diplomatic mediation, overseas Chinese networks, and technical standards – function not as ancillary mechanisms but as strategic governance resources that generate quasi-legal order, institutionalize trust, and construct de facto regulatory frameworks. The paper puts forward a theoretical conversion mechanism that explains how nonlegal norms achieve normative effectiveness through practice rather than legal mandate. This conversion operates across three dimensions of nonlegal capital: relational capital, where diplomatic mediation transforms political authority into binding legal instruments, as demonstrated in the Malaysia East Coast Rail Link renegotiation (2018–2019); network capital, where social trust converts into institutional qualification, as exemplified by Robert Kuok’s appointment to Malaysia’s Council of Eminent Persons; and technical capital, where standards acquire regulatory force through adoption, as illustrated by the Ethiopia-Djibouti Railway’s embedding of Chinese specifications into African infrastructure. The theoretical contribution is threefold: extending the analytical scope of Law and Development, challenging legal centralism by demonstrating that effective governance emerges from normative synergy rather than legal primacy, and offering a hybrid governance model for understanding China’s cross-border engagement. The paper also addresses theoretical boundaries regarding legitimacy, accountability, and transferability, positioning CLD as a contextual analytical instrument rather than a universal paradigm.