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Protecting People’s Assets

Legislators have been busy in China in recent months (with postal, monopoly and other laws [1]) but, for the first time, they are on a sixth draft of a law (which was first tabled in 2002, and which had its fifth reading in August lat year) to protect state assets…and private property rights. Xinhua reports that:

The sensitivities partly arise from the fact that clauses may be added that “will prevent fraudulent acquisitions and mergers of state assets” – a sensitive issue given public anger at official corruption, and the recent round of corruption-related detentions in Shanghai.

It is also controversial on account of the fact that the law would add to protection of individual assets, with confirmation of rights to have “bank accounts, earned profits and residential property”. Some fear this move could undermine the “socialist” bit of China’s already unique “socialist market economy”

The report notes:

There is little doubt that this sort of collusion is a problem. Reports abound, and one example I have worked on involved the sale of a major state enterprise to a private Chinese company for a token amount. Our investigations clearly showed that local officials were directly involved in the planning and approval of the deal.

At the same time, the law on banking regulation and supervision is also being discussed (according to People’s Daily). New proposals could “allow banking supervisory bodies to investigate non-financial institutions and individuals”:

The introduction of measures to protect state assets (for all the people, rather than just a few cronies), and the legitimate private assets that are increasingly driving the Chinese economy, must be a good thing. Let’s hope political doctrine doesn’t get in the way.

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