Hong Kong Paper Carries Commentary on Chinese Property Rights Law Controversy

Text of report by Hong Kong newspaper Wen Wei Po website on 10 March

[Article by Phoenix TV commentator Chiu Chen-hai published on HK Wen Wei Po: "The Controversy Over the Law on Property Rights in China"]

In the course of disputing over the property rights law, there are two major issues, one is the issue about the orientation, which is the issue pertaining to socialism or capitalism; and the other is the issue emerging in various technical aspects in the course of reform. The issue of the state-owned assets draining away has to be taken seriously.

On 8 March, the Fifth Session of the 10th National People’s Congress (NPC) will begin to examine and deliberate the draft Law on Property Rights, which has been disputed for a long time. There have been twists and turns in the controversy over the property rights, in which the principal divergences lie in whether or not the private properties should be protected, and how to protect them.

Two Controversial Issues

Since 1992, the market economy has reached an exceptionally avant- garde stage, and this so-called avant-garde has inevitably given rise to certain conflicts with a series of administrative structures, political structures, and legal orientation in China. Without a law to protect private properties, it would be impossible for the market economy to make advances. However, in the course of the controversy over the property rights law, there existed two major issues, one was the issue about the orientation, and the other was the issue in various technical aspects that emerged in the course of reform.

Let us talk about the issue in the technical aspects first. It is undeniable that a large volume of state-owned assets have been lost or annexed. If such assets or other assets from unknown sources are protected, then it is tantamount to acknowledging in the form of law all these assets that are acquired with procedural injustice. This is, of course, unfair to all the common people, so the opponents insisted that after the promulgation of the Law on Property Rights, the rich would be even richer, while the poor would be even poorer. Certainly, this is only a technical aspect of the issue that emerged in the course of reform and opening up in China at present.

As viewed from a still higher angle, it is an orientation issue pertaining to socialism or capitalism. China is a socialist country based on public ownership as acknowledged by the “Constitution.” However, China’s reform has currently entered a crucial stage in which the private economies must be protected. The private economies also include the private properties owned by the citizens, which is a fact that is undeniable. This way, the classic definition of the original structure is again conflicting with the present realities of reform and opening up in China, thus engendering the so-called controversy over the orientation.

Both the Positive and Negative Sides Have Their Own Demands

As a special case, the Law on Property Rights has revealed various issues in the process of economic transformation in China. In the two major camps holding the affirmative and negative views, both the pro and con sides have two different kinds of demands. First, some people on the con side considered the matter as it stood, stating that the phenomena of collusion between officials and businessmen did exist in the process of economic transformation in China at present, and that a large volume of state-owned assets were annexed in the process of transforming state-owned enterprises into private enterprises; it is undeniable that another faction of this side maintains that in terms of reform orientation, the enactment of the property rights law means that China’s reform would deviate from the traditional socialist orientation, and China was totally wrong since it started reform and opening up in 1979. Nothing happened at that time only because the contradictions were not intensified to a certain extent, but reform and opening up have reached a crucial point at present and will get to capitalism in one more step, so it is necessary to effect a retrogression now.

Likewise, there are also two factions in the pro side with different demands. One of them is in the opinion that the market economy has inevitably evoked certain conflicts with the structural and legal framework in China, so it is imperative to have a legal framework to lay a foundation for the future development of the market economy. Of course, considering the matter simply as it stands, they maintain that the existing problems can be resolved through other means in the future, but regarding the problems themselves, these problems in technical aspects that cropped up in the process of reform and opening up should not be taken as the basic obstacles for the enactment of the property rights law. Meanwhile, some people in the pro side are undeniably members of various interest groups who wish to introduce this property rights law as quickly as possible so that their personal or group interests will be protected. Hence, it is precisely these people that are engaged in a cut-and-thrust battle with their counterparts in the opposition camp.

Never Belittle the Mistakes in Reform Operations

In the technical aspects, we must admit that the argument of some leftists sounds reasonable. In all countries including Germany in which I lived for many years, its railways and post offices were owned by the state for a considerably long period of time, and the state also controlled some of the most important economic lifelines. Hence, in a practical sense, I think the argument of some scholars on preventing the state-owned assets from draining away, and refraining the enterprise managers from involving themselves in the entire stock-holding of the state enterprises in the form of joint- stock system does hold water.

On the other hand, the state-owned assets were, indeed, lost to such an extent that we should once again observe the issue more carefully now. If we say that the reform orientation is correct, then how should we resolve this issue in the technical aspect of the reform? We must under no circumstances slight such a technical issue, as many a little makes a mickle, the small issues may be accumulated and become a very serious one if they are not handled in a proper way.

The Law on Property Rights Needs Supporting Measures

The introduction of the Law on Property Rights itself calls for some supporting measures to examine the legitimacy of the properties in question. At present, we can only solve the problems in their technical aspects, but cannot think of many things just out of thin air. In my personal view, the adoption of this law is plausible, but its rejection is sensible too. It is very difficult to predict how many NPC deputies will vote in favour of the draft law, after all.

In this sense, therefore, I think that the debate and controversy are healthy. Everybody says that China wants democracy and legal system in the future, but where should the introduction of democracy and legal system begin? It should precisely begin with these small things. I feel that public opinion has failed to create an enormous atmosphere so that many ordinary people are unable to understand this point very well. They are more concerned about the particulars and do not quite understand the more deep-seated aspects that the property rights law has revealed.

(c) 2007 BBC Monitoring Asia Pacific. Provided by ProQuest Information and Learning. All rights Reserved.