China weighs property law

Chinese lawmakers opened formal debate Thursday on a controversial bill aimed at protecting private property, a milestone in a communist country that a generation ago condemned the accumulation of individual wealth as evil, exploitative and inhumane.

The measure is almost certain to pass during the 12-day session of China’s parliament, which ends March 16, although implementation will be far more protracted and difficult in a society struggling to define the line between state and individual.

“Recognizing private property rights will encourage more investment,” said Wang Yi, a law professor at Renmin University in Beijing. “It will also encourage people to acquire and develop property more honestly and legally. And it will help solidify the reform achieved since the 1970s.”

On paper, the annual National People’s Congress is the highest lawmaking body in the country. In reality, power is held by a small number of officials on the Communist Party Politburo. Wang Zhaoguo, a politburo member and vice chairman of the congress, underscored the politburo’s support and thinking Thursday in a lengthy speech.

“Since the reform and opening up, the economy has been developing rapidly, the people’s living standards have continued to improve, and private property has been increasing with each passing day,” Wang told about 2,800 deputies assembled in the cavernous Great Hall of the People.

“Enactment of the property law will serve to define and protect private ownership ... protecting the immediate interests of the people, stimulating their vigor to create wealth and promoting social harmony,” he said.

China enshrined the concept of private property rights in its constitution in 2004, but the draft law begins the process of translating theory into practice. Although many of the provisions laid out in the 247 articles of the 40-page bill are covered in current laws and regulations, this so-called basic law attempts to bring greater consistency, definition and assurance to the thorny issue of property rights.

The debate over such rights has been underway since the early 1990s. In the process, it has pitted reformers in favor of clearly defined guarantees against conservative communists keen on maintaining state power.

Foreign businesses welcomed the draft bill.

“This is a move in the right direction,” said James Zimmerman, an attorney and president of the American Chamber of Commerce in Beijing. “It’s a good sign for domestic and international companies that China is moving away from the point where the state owns everything.”

Although the law would bring clarity to usage rights and their renewal, all land would remain the property of the state or local cooperatives that effectively represent the state’s interest.

That said, tenants’ ability to extend use rights by as long as 70 years should give them more of the peace of mind that outright ownership provides, along with the economic incentives to make longer-term improvements.

China has seen growing rural unrest by farmers muscled off their land by corrupt or unscrupulous local government officials. Analysts say the law wouldn’t go a long way toward addressing that social problem.

But it would extend a significant hand to urban middle-class Chinese lining up by the thousands to buy their first apartments. Included in the bill’s provisions is greater recognition of condominium homeowner groups that increasingly find themselves on the front lines in disputes with powerful developers. And it would provide apartment owners greater control over common areas such as hallways and parking lots.

On Thursday, China also formally outlined a unified corporate tax that would charge both foreign-funded and domestic companies the same 25% rate.

mark.magnier@latimes.com

Cao Jun of The Times’ Shanghai Bureau contributed to this report.