A lonely household that guards its property rights, Chongqing.

THE National People’s Congress (NPC), China’s legislative body, currently faces unprecedentedly onerous legislative tasks. Economic and social matters relating to the development of the market economy call for regulatory laws. Legislation, therefore, is now a pressing matter. During the NPC 2007 session, world attention was focused on two laws -- the Property Law and the Corporate Income Tax Law. The former affirms the principle of protecting private properties, the latter of optimizing a market environment by means of fair competition. These laws will undoubtedly inject new vitality into China’s market economy.

Longest Legislative Process

There was thunderous applause in the Great Hall of the People when, at 10:00 am on March 16, 2007, the Property Law was adopted by a 2,799-vote majority. Having undergone seven readings in 13 years, there has been longer deliberation of this civil law than of any other in the history of NPC legislation.

Chen Shu, a legal worker and NPC deputy, clearly remembers when she first became involved in the deliberation of the Property Law (draft) in 2004. She had been invited to the 12th meeting of the Standing Committee of the 10th National People’s Congress as an observer. One item on the agenda was the second reading of the Property Law (draft).

“I never imagined that the suggestion I raised at that meeting would be adopted,” she recalls. Chen Shu pointed out that public notification of property rights is a basic principle of the Property Law. In the past, however, artificially imposed obstacles impeded potential house owners from obtaining relevant real estate registration information. Chen proposed that such information be made more accessible. The Ministry of Construction accordingly issued the Interim Measures for Inquiring Registration Information of Housing Ownership in October 2006. One article stipulates: “Housing ownership registration information as recorded by the relevant organs should be made accessible to inquiry by units and individuals.”

Chen Shu was invited to Beijing again in November 2004 to attend two forums on the legislation of property rights. At this meeting, Chen Shu pointed out that many items relating to the registration of housing and land overlap, and that the two processes should be unified into one real estate registration, thereby reducing the expenses incurred by repeated registrations. The Property Law adopted by the NPC 2007 session stipulates, “The state practices a unified system of real estate registration.” Chen Shu attended four readings of the Property Law (draft), each of which led to revisions.

In July 2005 the draft law was published in its entirety. The National People’s Congress subsequently received more then 10,000 letters from people of all walks of life. The Commission of Legislative Affairs of the NPC Standing Committee convened more than 100 forums and several meetings with the aim of soliciting the opinions of experts as well as of the general public.

The Property Law began to be drafted in 1993. It underwent seven readings by the legislature in the course of the next 13 years. On each occasion voting was postponed owing to differences of opinion. Liang Huixing, the legal expert who participated in drafting the law, made the comment several years ago, “Taking into consideration the general lack of understanding of the Property Law owing there being no concept of property rights, legislation in this respect might be expected to be arduous, requiring great efforts from legislators and legal scholars.”

Liang Huixing has reservations still about certain articles in the Property Law, in particular the stipulation that wildlife resources belong to the state. In his view, personal and property damage caused by infringements by wild animals may lead to lawsuits against the state and necessitate state compensation. Matters could be even more complicated in cross-boundary cases and spark off international disputes. This stipulation, therefore, should be reconsidered.

Chen Shu also points out that many Property Law stipulations are merely nominal, and that specific issues call for concrete implementation measures.

Equal Protection of Public and Private Properties

Zhang Tianliang, a Beijing citizen, says that his greatest concern during the 2007 NPC and CPPCC sessions was whether or not the Property Law would be adopted. The aspect that concerned him most about the law was its detailed stipulations as to the ownership of green areas and car parking space in residential areas. He explains, “I moved into a new apartment last year. The car-parking fee in our residential area is an exorbitant RMB 400 per month, and negotiations between house owners and the property management company have been going on for months with no result. The Property Law now provides a basis on which house owners can protect their rights and interests. More important, the right to land on which commodity housing is built is automatically renewed after expiration of a 70-year period. I am now free from the worry that my house will be confiscated in 70 years’ time.” Zhang is relieved that the law clearly confirms that the apartment he has bought on a mortgage actually belongs to him.

Since China adopted the policy of reform and opening-up, the co-existence of public and non-public ownership and sustained development of the national economy have engendered a large number of private enterprises; there has also been a substantial increase in private properties. China’s Constitution was revised to include the term “private economy” in 1988, and the term “market economy” was included in the Constitution in 1993. Since 1999, the Constitution has explicitly stated that, “the state protects the legitimate rights and interests of the individual economy and the private economy.” Certain experts regard the adoption of the Property Law as representing the final establishment of China’s market economy system.

“We non-public entrepreneurs have anticipated the Property Law for more than a decade,” says Liu Yonghao, president of the New Hope Group. "The reform and opening-up policy encourages private entrepreneurs and allows them to become rich earlier than others. Now many of these people have accumulated industrial as well as family properties, and the state should protect them.“ The scope of protection is now much broader by virtue of the newly adopted Property Law. It covers private enterprises, individual citizens, foreign-funded enterprises and state-owned enterprises, as well as all wealth obtained through legitimate means.” Liu believes this law will encourage enterprises and individuals to work harder in creating greater wealth and national prosperity.

The Property Law is also considered to have revolutionized the whole concept of property. “That the interests of the state and collectives take precedence above all else has been impressed on us since childhood, but the Property Law officially specifies equal protection of both private interests and the interests of the state and collectives. This is its greatest significance,” says Liu Min, a post-graduate student at the China University of Political Science and Law. Orthodox education in China indeed stresses that personal interests come second to those of the state and collectives. The Property Law adopted at the 2007 NPC session, however, clearly stipulates that state, collective, individual and otherwise-owned properties are all protected by law.

Deng Xinmin, secretary of the CPC Suining City Committee, Sichuan Province, told this reporter, “Most important is that the ownership of farmland and housing has been clarified, which is a great weight off many people’s minds. Equal protection is unprecedented.”

Qiao Zhanshan, an NPC deputy from Shaanxi Province and chairman of the Villagers’ Committee of Bajialiang Village, Huanglong County, said, “Farmers are most concerned about the farmland issue. The Property Law affirms farmers’ rights as regards contracting and using land, the contracting period having been set at 30 years. This allows farmers to make long-term land use plans, which is beneficial to agricultural production.”