EMERGING REGIMES FOR PROPERTY RIGHTS IN CHINA4

Under the rubric of internationalization of property rights, Chinese jurists have called for greater reference to be made to foreign law from Japan, Europe, and the Anglo-North

American tradition as precedents for property rights reforms in China.5 Chinese civil law notions of “property behavior” (wuquan xingwei) have been influenced in particular by German law (either directly or through the forms adopted from Japan and Taiwan).6 Taiwan law scholars, such as Wang Zejian, have been particularly influential in the transmission of German civil law concepts to China.7 The recently enacted Property Rights Law of the PRC is particularly influenced by liberal ideals of private property rights, albeit qualified by imperatives of socialist regulation.

Transitions Toward Ideals of Private Property

While the economic reform policies enacted beginning in 1978 granted enterprises greater autonomy in decision making and permitted increased diversity of economic actors and transactions,8 doctrinal norms continued to emphasize the importance of state interests in the enforcement of private law relations. The 1982 constitution extended protection to property but only to the extent that it would constitute “lawful property,” the definition of which remained the exclusive province of the state.9 Constitutional requirements that the exercise of citizens’ rights, including the right to own property, do not conflict with the state or social interest10 effectively granted the state a monopoly to interpret those interests and thus to determine the extent to which private property rights would be recognized and enforced. During the period of accelerated reform following Deng Xiaoping’s 1992 “Southern Tour” (nanxun), property policy and legislation emerged as important agenda items for both academics and government officials. While conventional norms of public ownership and protection of public interest remained well represented,11 increased attention was also paid to reforming the system of state ownership. Existing discourses on management rights were expanded to address not only issues of managerial autonomy but also managerial responsibility to conserve state property.12 Problems of corruption and mismanagement of state property (particularly in state- owned enterprises) gave rise to calls for tighter regulation.13 However, policy changes supporting the transition to a market economy meant that state ownership rights must also evolve and in some instances give way to diverse alternatives.14

The PRC constitution was amended in 1993 to affirm the socialist market economy as the foundation for economic policy.15 The transition from the socialist commodity economy meant that increased market autonomy for economic actors (including individuals as well as enterprises) could extend beyond the realm of transactions in goods. This invited changes to the existing property rights regime to extend protection not only to immovable property such as land and movables such as personal property but also to intangibles such as intellectual property.16 In 1995, a semiofficial proposal on property legislation was published, which suggested that conventional boundaries for property rights as set forth in the General Principles of Civil Law should be reex- amined.17 Jiang Zemin’s speech to the CPC Fifteenth National Congress in October 1997 supported the development of property rights in corporations—an essential precursor to expanded private property regimes generally.18

Efforts to draft a code of property law in 1998 under the aegis of a Civil Code drafting team revealed ongoing disagreements over the proper scope of private property rights. On one hand, by clarifying property as a civil law relationship, the drafters emphasized the importance of limiting state intrusion. Thus, the draft property law contained a principle that property rights could not be interfered with by third parties (including government organs).19 On the other hand, the draft retained the basic principles of protecting “lawful” rights and interests and safeguarding social and economic order and socialist modernization, as well as a prohibition against property rights harming the public interest.20 Explanations of this section make specific reference to the constitutional provisions on the market economy—and by extension the limits on full marketization imposed by the Party’s policy imperatives on socioeconomic order.21 Thus, even as renewed efforts are made to enshrine property rights into legal codes, the rights that resulted unavoidably remained subject to the general tenor of constitutional provisions favoring socialist public ownership over private property rights.

Confronting those who argued for more expansive private property rights protections in the constitution, opponents of expanded constitutional protection suggested that this would contribute to problems of corruption and misuse of state property.22 This reflected the extent to which norms of public ownership remained deeply ingrained in the normative and institutional framework for China’s property law regime.23 Indeed, the importance of conforming to China’s particular “conditions” (tedian) remains a powerful orthodoxy governing the scope and terms of property rights reform.24 Doctrinal norms continued to emphasize the importance of state interests in the enforcement of private law relations.25 The centrality of public ownership was part of this orthodoxy and inhibited the recognition of private property rights.26

The 1999 revisions to the constitution did not ultimately include a provision on the sanctity of “private property rights” (siying caichan shensheng)—instead the language provided that the self-employed, private, and other nonpublic sectors constituted an important component of the socialist market economy, whose lawful rights and interests would be protected by the state.27 The constitutional amendment originated nominally with the CPC Central Committee,28 although the CPC Politburo Standing Committee and its politics and “law system” (zhengfa xitong) remain the key arbiters on issues attendant to the constitution and other key enactments. The 1999 amendment confirmed that, although the socialist market economy would permit individual enterprises and private firms to play an important role, ultimately property rights would remain subject to the policy priorities of the Party/state and would not receive unlimited constitutional protection. While this confirmation was touted as a major step forward in China’s reform process,29 the reference to state protection of lawful rights and interests signaled that the private sector would remain subject to significant state control. Parallel provisions were to be found in the newly enacted Contract Law of the PRC (1999), which confined contracts to notions of “lawful rights and interests of the parties,” and subjected contracts to the imperative to protect “state and social interests.”30

The limits of the 1999 constitutional revision reflected a continuing policy position that privileged socialist public property. While China’s socialist system might tolerate or even encourage private property, this would still depend on the policy direction and dispensation of the Party/state.31 Indeed complaints about the phenomenon of “unit crimes” (danwei zui), such as bribery and tax evasion, committed by enterprises suggested further limits to official tolerance of private businesses.32

The constitution was amended yet again in 2004 to provide in Article 13 that lawful private property “shall not be violated” (bu shou qinfan). The language of protection for private property contrasts with the provisions in Article 12 that socialist public property is “sacrosanct and inviolable” (shensheng bu qinfan), underscoring the continued privileging of public property.33 The proposed application of the term “sacrosanct” (shensheng) to private property was rejected yet again, although the constitutional affirmation of an expansive role for private property rights signaled an important change in official orthodoxy on relations between public and private ownership. These constitutional developments, in turn, paved the way for completion of a draft property law, work on which had begun in the early 1990s.

 
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