ASIA FOCUS

China's long journey toward property rights

STEVEN HE

Chinese president Hu Jintao on March 19 signed a decree to declare the enaction of the country's landmark Property Law. China's top legislature had adopted it after a 14-year debate and numerous revisions. The law will come into force on Oct 1, 2007. It is the first time that the protection of private property, a concept already enshrined in the Chinese Constitution, has been written into a specific law.

The law stipulates equal rules and rights for property owners of the state, collectives and individuals and defines the citizen's rights in a wide range of economic activities, from owning a piece of land or a house to using a parking space.

"The Property Law is a new milestone in the country's progress in its economic reform," said Li Weizu, a legislator attending the parliamentary session.

"The appearance of the property law is a strong symbolic indicator of the transition from the proletarian era to the propertied era," said one writer in an essay posted on Strong Nation Forum, a popular website.

For many ordinary citizens, the hope is that the law should protect them from government interference, especially illegal demolition, often conducted by estate developers conspiring with local governments in the name of urban expansion. (Search "illegal demolition" in Chinese in Google and you will find 310,000 links.)

Yang, the owner of the three-branch Beijing People Sunshine Pharmaceutical Chain Stores, said the law was a sign of a strengthening legal system that would improve investor confidence.

And with urban private home ownership levels reaching up to 80%, new owners such as Wu Weiran, a marketer for a German firm in Shanghai, said the law's guarantees were very welcome.

But in a country where socialist ideology still holds sway despite the embrace of capitalism, the road to the law's passage has hardly been smooth. Legislators had tried passing such a law on seven previous occasions. An attempt last year became bogged down in a dispute over balancing of state and private rights.

The most recent debate began last August, when a law professor at Peking University, Gong Xiantian, posted an open letter online against the Property Law draft. "The basic principle of the draft law is against the constitution and away from the socialistic direction," he wrote.

He argued that property protection in the law could shield those who stole state assets or who took bribes, a suggestion that was quickly dismissed by supporters of the draft.

Because public discussion of proposed laws is in itself very novel in China, Prof Gong's letter triggered a huge echo on the internet and drew support from people in many walks of life.

"As the gap between rich and poor grows, saying 'equality' means giving equal protection to both beggars' sticks and a few people's limousines, the shabby apartments of ordinary people and rich people's luxurious houses and villas," Prof Gong said. "It's not the equality of labour but equality of capital. What is the difference between it and capitalism?"

His viewpoint gained a lot of support, notably from many laid-off urban workers, who have nothing to show for 30 years of reforms, and their sympathisers.

But Prof Gong also has his critics, even among some of his students, who said he lacked knowledge of civil law, was delaying the process of lawmaking, and was "the enemy of the nation".

Yin Tian, also a professor at Peking University who helped draft the law, said that the critics were out-of-touch ideologues. "They don't belong to the mainstream," he said. "The establishment of a property law is aimed at solving the problem of protecting the private assets of ordinary citizens."

However, Prof Gong's open letter did have the effect of slowing the momentum toward the law's passage. The draft was sent for further revision, increasing the part about protection of state property.

Just days before the opening of the latest parliamentary session, critics of the law, including hundreds of retired officials, continued to press their opposition, circulating a new petition saying the law "overturned the basic system of socialism".

"The property law has revoked the rule that public property is sovereign and ... castrated the spirit of the constitution that distinguishes legal from illegal private assets," the petition said.

But this time the government was not as tolerant as last year. To avoid more controversy, the draft was not publicised until March 16 - the last day for legislators' voting. The media were told not to publish analysis or commentary on the property law. Two Beijing magazines, Caijing and Xiaokang, had to delay their cover stories on the law.

Why has the issue become so sensitive? With the rapid growth of China's private economy and urban middle class in cities, the country urgently need a law to deal with property disputes and encourage more investment from the private sector.

The private sector, including foreign investment, has grown to account for 65% of the gross national product and up to 70% of tax revenues.

In the late 1970s, to quiet conservative opposition voices against reform and opening up, Deng Xiaoping put forward his famous theory, "It doesn't matter whether the cat is black or white, as long as it catches mice." Ever since, the vigorous debate on socialism versus capitalism had been effectively shelved - until now.

However, with the protection of private ownership being written into law, some people who still have a strong belief on Marxism and Maoism don't want be silent again. "The law basically ignores the constitution's upholding of socialist public property as sacred and not to be violated," one analyst argued.

In fact, for many critics of the law, their discontent is not rooted in ideological reasons. What they oppose is the unfair distribution of "social wealth" caused by the reform movement that Deng touched off.

A small portion of the population, they say, has grabbed most of the social wealth while hundreds of millions have been reduced to victims, deprived of land, houses and work without reasonable compensation.

Indeed, the commentaries of Prof Gong and others have aroused nostalgia for the planned economy in which the state took care of housing, education and health care for its urban citizens.

Bangkok Post

Saturday March 31, 2007