China, in Big Policy Shift, is Set to Pass Property Law

By David Lague

The Chinese Parliament began debating a landmark private property measure on Thursday that would ensure that all forms of property, including the assets of individuals, the state and collectives, have protection under the law.

The introduction of the proposed law to Parliament, formally the National People’s Congress, follows a rare and long public consultation that suggests that the Communist Party may be willing to allow more scrutiny of controversial government policies.

Chinese leaders argue that the law is crucial for future prosperity, as private enterprise accounts for an increasing share of output in what was formerly a centrally planned economy.

In a speech introducing the draft law, Wang Zhaoguo, deputy chairman of the Standing Committee, told delegates Thursday that protecting people’s property rights was aimed at “stimulating their vigor to create wealth” and enhancing social stability.

“As the reform and opening-up and the economy develop, people’s living standards have improved in general and they urgently require effective protection of their own lawful property accumulated through hard work,” Wang said, according to the text of his remarks as made public by Xinhua, the official press agency.

After seven drafts, public seminars and consultations with legal scholars and other experts, the property law is almost certain to be passed during the annual parliamentary session under way in Beijing.

While all land in China remains the property of the state, legal experts consulted in drafting the law said it would automatically extend the leases that farmers and homeowners hold over the land they occupy.

But experts say the new law is unlikely to curb the forced reallocation of farming land for commercial or industrial use that has led to widespread unrest and protests in rural areas.

The National People’s Congress is not known for spirited debate, let alone opposition to legislation backed by the Communist Party. Yet strong opposition to the property law, the first legislation of this kind since the Communists took power in 1949, has prompted the government to revise significantly the original draft submitted to lawmakers in 2002.

“The Chinese government is moving very, very slowly toward transparency, toward some kind of openness in terms of the legislative process,” said Li Ping, a lawyer in Beijing with the Rural Development Institute, a private organization based in Seattle that aims to ease rural poverty through improved land rights for farmers.

“The government has been pretty reasonable in seeking public comment on this,” Li said.

Senior government officials acknowledge that the proposed property law remains controversial despite revisions aimed at placating critics. At a news briefing on Sunday, before the opening session, the parliamentary spokesman, Jiang Enzhu, said the property law was a sensitive issue.

“No matter if it is state, collective or private property, it should be protected equally,” Jiang said.

“Otherwise, people’s enthusiasm to create and accumulate wealth in legal ways will be impaired and the country’s prosperity and social stability will also be harmed.”

More than three decades of expanding economic freedom have delivered greatly improved living standards for hundreds of millions of Chinese.

But the debate over the status of private property has exposed a lingering divide over the role of state ownership and the value of capitalism. It has also given vent to widespread frustration among current and retired senior officials and academics over the widespread corruption and misappropriation of state assets.

Political analysts speculate that the government chose to seek a relatively wide range of views, including those of outside experts and former officials, because it was important to build a consensus for a legal framework that would be fundamental to China’s economic and political future.

“It is basically a kind of constitutional law,” said Li, the lawyer. “It covers all kinds of property and every aspect of people’s daily lives except their political rights.”

Analysts have also suggested that tightening the security of homeownership could increase support for the government among China’s increasingly affluent, urban middle class.

A leading Chinese Marxist economist, Gong Xiantian, has been a key figure in rallying opposition to the draft law. After a government call for public comment in 2005, Gong wrote an open letter last year to the chairman of the Standing Committee, Wu Bangguo, warning that putting private property on the same legal basis as public assets would “undermine the legal foundation of China’s socialist economy.”

“This means that people who become rich by preying on state- owned assets and taking bribes could be shielded from prosecution,” Gong wrote in the letter, which included the signatures of 3,274 people, including retired senior officials and military officers. “Such a law would pose a serious violation against China’s Constitution, which stipulates that socialist public property is deemed sacrosanct and shall be free from encroachment,” he wrote.

Supporters of the law, however, say the anger over the misappropriation of state assets is understandable but argue that this is outside the scope of the property law. “The theft of state assets is a criminal offense,” Li said. “The criminal law should be doing something about that. This is a failure of government. It is not a failure of law.”

Some economists warn that the law’s passage would not significantly enhance the rights of property owners while government officials exerted influence or even outright control over the courts.

“The rule of law, in a real sense, is not there,” said Li Hui, managing director of China business in Beijing for CLSA Asia- Pacific Markets, a Hong Kong-based investment bank.

Advocates of farmers’ rights unsuccessfully urged the authorities to include provisions in the property law that would make it more difficult for local governments to seize farms and sell the rights to use this land to private developers or industry. Under existing law, local governments have the power to convert agricultural land to other uses if it is deemed to be in the public interest. Many local governments rely on these sales for the bulk of their income, but this has generated thousands of protests by farmers who have complained that they have been unfairly compensated.

(c) 2007 International Herald Tribune. Provided by ProQuest Information and Learning. All rights Reserved.