The Private Property Party

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The issue of private property rights is a tough one – even for a “socialist market economy with Chinese characteristics”. The “privatisation” of state-owned enterprises did not really happen, there was just an introduction of “diversified forms of ownership”, but the confirmation of private property rights seems more difficult one to fudge….not least because, as The Economist points out, the Chinese name for the Communist Party is the “Public Property Party”! (Nevertheless, People’s Daily has done its best to find the silver lining, with a headline stating: “Property legislation embodies spirit and principle of Constitution”).

No surprise then that China Digital Times has noted a Wall Street Journal article that reports on heightened sensitivities around the subject – sensitivities that may have resulted in the current issue of the business magazine Caijing being pulled and revised. The FT has reported on fears in some quarters that the law has “overturned the basic system of socialism”. However another view is reflected by Yin Tian, a professor at Peking University (who had a hand in drafting), who is quoted as saying:

    “The critics are actually opposing China’s overall reform and opening up. They don’t belong to the mainstream….The establishment of property law is aimed at solving the problem of protecting the private assets of ordinary citizens.”

The Economist’s take on it is as follows:

    “The party’s decision to enact the law in spite of that resistance is a great symbolic victory for economic reform and the rule of law. Clearer, enforceable property rights are essential if China’s fantastic 30-year boom is to continue and if the tensions it has generated are to be managed without widespread violence…”

As for the provisions of the law, these will become clear in due course (as will their enforcement) but, according to a draft from 8th March (reviewed by The Economist), the following points come out:

    • “The proposed law’s provisions…range from general statements of principle to specific clarifications of certain grey areas.”

    • “Many of the law’s provisions are contained in other regulations issued in recent years. But supporters of the bill say that combining these elements into one law enacted by the country’s top legislature would give them additional weight.”

    • “The draft tries to streamline the registration of property sales and make it easier for interested parties to check details.“

    • “[T]he latest draft, unlike the 2005 version, gives farmers the right to renew their land-use leases after they expire. Unlike urban land, which is state-owned with usage rights granted for periods of between 40 and 70 years, rural land is “collectively” owned. Farmers are given 30-year leases (though often no supporting documents) to use plots of land.”

    • “But the law will put no new limits on the government’s powers to appropriate land.

    • “Most important, the ban on mortgaging farmland will remain.”

The introduction of the property law has been an uphill battle against some entrenched ideological interests, but its successful introduction is likely to represent another step forward in the quest for the holy grail of the “harmonious society”.

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2 Responses to “The Private Property Party”

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