15/05/2019 China approves law that protects private property - The New York Times

ASIA PACIFIC

China approves law that protects private

property
By JOSEPH KAHN MARCH 15, 2007
BEIJING — After more than a quarter-century of market-oriented economic
policies and record-setting growth, China on Friday approved its first law to
protect private property explicitly.

The measure, which was delayed a year ago amid vocal opposition from
resurgent socialist intellectuals and old-line, left-leaning members of the ruling
Communist Party, is viewed by its supporters as building a new and more secure
legal foundation for private entrepreneurs and the country's urban middle-class
home and car owners.

But delays in pushing it through the Communist Party's generally pliant

legislative arm, called the National People's Congress, and a ban on news media
discussion of the draft law, raise questions about the underlying intentions and
the governing style of President Hu Jintao and Prime Minister Wen Jiabao,
experts say.

Despite a high level of interest in the law among intellectuals and

businessmen and the unexpected decision last year to withdraw the measure from
the legislative agenda at the last minute, neither leader has spoken about the
matter publicly.

Wen's two-hour address to the nation on the opening day of the annual two-
week legislative session last week did not mention property rights.

2The measure
 
could not pass the legislature, which acts under the party's
authority, without the active support of the top leadership. Yet the conspicuous
ARTICLES
REMAINING

https://www.nytimes.com/2007/03/16/world/asia/16iht-web-0315china.4927191.html 1/4
15/05/2019 China approves law that protects private property - The New York Times

silence of Hu and Wen appears to be a form of tribute to the lingering influence of

current and former officials and leading scholars who argue that China's
economic policies have fueled corruption and enriched the elite at the expense of
the poor and the environment.

"My own view is that the leftist voices that have emerged are not going to
disappear because we have a property law," said Zhu Xueqin, a Shanghai-based
historian and government expert who supports the law. "On the contrary, they
are stronger now than they have been in some time."

The leadership did not so much overcome opposition to the property law as
forbid it. Unlike in 2005, when leaders invited broad discussion about property
rights, the latest drafts of the law were not widely circulated. Several left-leaning
scholars, who favor preserving some elements of China's eroded socialist system,
said they had come under pressure from their universities to stay silent.

The Propaganda Department instructed the news media not to report on the
matter. When one popular financial magazine, Caijing, defied the order and
published a cover story on the law last week, it was ordered to halt distribution
and reprint the magazine without the offending story, people associated with the
magazine said.

While the final wording of the law — and the nature of any compromises that
were necessary to build a consensus within the party to pass it — remain unclear,
many mainstream scholars and business people have welcomed it.

Several said they also approved of the way Hu and Wen handled the
opposition.

"I think the low-key approach was the best way to get this law passed," said
Mao Shoulong, a public policy expert at People's University in Beijing. "The point
is to enact a new law, not to pick a fight."

Zhu agreed. "Their style is to say less and do more," he said.

But the leadership's strategy did not resolve the underlying tensions.
Hundreds of scholars and retired officials signed a petition in February against

2the law,
 
which they said "overturns the basic system of socialism."
ARTICLES
REMAINING

https://www.nytimes.com/2007/03/16/world/asia/16iht-web-0315china.4927191.html 2/4
15/05/2019 China approves law that protects private property - The New York Times

The petition claimed the law does too little to distinguish between private
property gained legally through hard work and public property that falls into
private hands through corruption. They also argued that China could not give
state-owned property and private property the same legal status and still call
itself socialist.

Supporters of the law dispute the assertion that it will protect the ill-gotten
gains of corruption, arguing that it protects only legal property. Currently,
Chinese buy and sell property freely, but they do so in a legal vacuum. Supporters
say they hope the law strengthens the rights of property holders, especially
middle-class homeowners.

China's urban middle class has fueled a real estate boom, even though all
land is owned by the state and purchasers trade only the right to use property on
the land for up to 70 years. The disposition of property after that term expires is
one of many unsettled issues the property law is intended to address, but the
details have yet to be made public.

But proponents of the law tend to remain mum on the broader complaint
that China's pretense of socialism has become more and more hollow. Leftists do
not seem likely to give up their offensive.

They scored a important victory recently when online petitions and an

intensive campaign in the state-run news media appear to have prompted a
leading American private equity company, the Carlyle Group, to scale back its
planned investment in one of China's largest construction machinery
manufacturers, Xugong Group. The investment had become a test of China's
willingness to sell majority stakes in core industrial companies to foreign
investors.

Amid this tussle, Hu and Wen appear to have sought a middle ground. In
public statements, Hu has promoted a "harmonious society" that does a better job
of distributing wealth equitably and alleviates some of the excesses of pollution
and corruption that have accompanied rapid growth.

Wen has focused mainly on lifting rural incomes and increasing social
spending, especially on health and education.
2  
ARTICLES
REMAINING

https://www.nytimes.com/2007/03/16/world/asia/16iht-web-0315china.4927191.html 3/4
15/05/2019 China approves law that protects private property - The New York Times

Those approaches have addressed some concerns of people on the left. But in
practice, the two leaders have also sought to keep faith with business leaders and
the rising middle class. Under their leadership, state-run banks have sold shares
to foreign investors and overhauled bank management systems with the help of
foreign consultants.

So far, they have steered relatively small amounts of government revenue

into the country's rudimentary social welfare system. And they continue to invest
heavily in infrastructure and industrial expansion, helping the economy expand
even faster than it did in the 1990s.

Those measures, along with the property law, suggest that they will not
casually abandon the pro-growth policies that have made China a leading
economic power.

A version of this article appears in print on March 15, 2007, in The International Herald Tribune.

© 2019 The New York Times Company

2  
ARTICLES
REMAINING

https://www.nytimes.com/2007/03/16/world/asia/16iht-web-0315china.4927191.html 4/4