OBSERVATIONS IN SEVERAL CHINESE CITIES, AND A DIALOGUE BETWEEN AUSTRALIAN JURISTS AND JUDGES OF PEKING AND SHANGHAI HIGHER COURTS FORM THE BASIS FOR THIS REPORT. THE CHINESE METHODS OF DETERRING CRIME, REHABILITATION, AND PUNISHMENT OF CRIMINALS ARE VERY DIFFERENT FROM WESTERN METHODS. THE CHINESE FORMAL LEGAL SYSTEM IS NOT BASED ON COMMON LAW PRECEPT NOR PRECEDENT, AND IT HAS VERY LITTLE CODIFICATION. THE ESSENCE OF THE NEW REVOLUTIONARY LEGAL SYSTEM IS MAO ZEDONG'S 1957 TALK 'ON THE CORRECT HANDLING OF CONTRADICTIONS AMONG THE PEOPLE' WHICH WAS LATER INCORPORATED INTO THE CONSTITUTION. THIS IS ADDED ON TO CENTURY-OLD, NONLEGAL DISPUTE-SOLVING MECHANISMS. ALL DISPUTES OR CONTRADICTIONS ARE EITHER THOSE ARISING AMONG THE PEOPLE THEMSELVES, OR THOSE BETWEEN THE PEOPLE AND THEIR ENEMIES. BY WESTERN STANDARDS, TERMS AND DEFINITIONS OF SUCH WORDS AS 'ENEMIES' AND 'PEOPLE' ARE VAGUE AND DO NOT MEET (WESTERN) CONSTITUTIONAL STANDARDS. THE METHODS OF RESOLVING DISPUTES ARE DESCRIBED IN DETAIL WITH EXAMPLES GIVEN. THE REAL RESOLUTION OF DISPUTES OCCURS IN STRUGGLE SESSIONS, WALL POSTER DEBATES, AND INFORMAL ADJUSTMENT TECHNIQUES IN LOCAL UNITS. WALL POSTERS ARE CONSTITUTIONALLY PROTECTED. PRECEDING THE COMMUNIST REVOLUTION, THE WALL POSTER OCCUPIED A SPECIAL PLACE IN THE POLITICAL SYSTEM. IT IS THE PEOPLE'S PRIMARY METHOD OF MAKING PUBLIC STATEMENTS. A STRUGGLE SESSION IS A FORCED CONFRONTATION BETWEEN ONE WHO HAS ERRED AND THE COMMUNITY THAT SEEKS TO CHANGE HIM. AFTER A STRUGGLE SESSION THERE MAY BE A TRIAL, BUT THE POLICE AND THE COURTS DO NOT YET HAVE TO BE INVOLVED. THE PROCEDURE FOR AN ORDINARY CRIMINAL TRIAL IS GIVEN. IN ALL BUT COUNTERREVOLUTIONARY CASES, THE NEIGHBORHOOD POLITICAL OR PRODUCTION UNIT OR THE PLACE WHERE THE OFFENDER LIVES WILL TRY AND RESOLVE THE DISPUTE. JUDGES MAY BE WORKERS, PEASANTS OR SOLDIERS WITH LITTLE LEGAL TRAINING BUT WITH GOOD MARXIST-LENINIST BACKGROUNDS. THE LEGAL PROCESS IS SUBSERVIENT TO THE POLITICAL PROCESS AND REFLECTS POLITICAL CHANGE. (RFC)