In March, the Chinese government did a very strange thing for a Communist dictatorship – for the first time ever it granted legal protection to the concept of private property rights, a cornerstone of capitalism since before Adam Smith.
The new law, which elaborates on the 2004 constitutional amendment enshrining protection of personal property rights, certainly made for nice headlines in the global press, which is always looking to inform readers that China is not really Communist at all.
To the Beijing leadership this law is another example of "Socialism with Chinese Characteristics"; to the rest of us it might be more familiar as cowboy capitalism.
But, after much hype and over 13 years of discussion, how significant, really, was it?
Long ago I stopped subjecting myself to the frustrations of reaching the end of a long, opaquely-worded Chinese legal clause only to find a line saying that "everything you've just read can be negated, changed or overruled by a relatively minor official from the organ that just issued this supposedly iron-clad law."
But from a cursory examination I can tell you one thing: The law isn't necessarily a boon to the real estate market in China, as some have tried to spin it.
As with most things in this country, things happen on the ground first and the laws and regulations catch up much later.
Citizens and companies have been happily investing in real estate for at least 10 years without a thought to any legal protection. Property transactions hit US$9 billion last year, up more than 40%. And almost 40% of these transactions were conducted by foreign investors, who clearly pay as little attention to the need for strong legal protection for their investments as locals do.
The state-owned banks felt comfortable enough without such legislation to grant the first private home mortgage in 1999 and today the domestic mortgage market is one of the most lucrative sectors in the banking industry.
The new law also means little to the country's 800 million or so peasants because the legislation doesn't grant ownership rights over land to anyone except the government.
In urban centers this is circumvented by the 50-90 year lease concept, under which property investors are just "borrowing" their land from the state. All property transactions are conducted on the assumption that these leases will continue to roll over in perpetuity or until political reforms make it possible for individuals to truly defend their private property rights in a transparent judicial system.
But in the countryside, the government is deathly afraid of a Russian-style privatization in which ruthless opportunists swing through the villages picking up land for peanuts and disenfranchising the peasants – who then either move en masse to city slums or revolt against the Communist Party that abandoned them.
This means the outdated "individual responsibility" system of 30-year farming leases that so successfully launched China's capitalist rejuvenation in the early 1980s will continue.
Radical academics and some outspoken property developers have called for all Chinese soil to be commoditized but the problem is not only ideological or motivated by fears of rural unrest.
The fact is that local governments across the country derive up to 50% of their revenues from land sales and real estate development. Granting individual property rights to rural dwellers would massively expand the supply of land, thereby diminishing the value of local government land banks.
The most vocal opposition comes from officials and academics who believe the legislation is merely a fig leaf that legitimizes the historical and ongoing looting of state assets by the nation's political and business elite.
The widespread privatization of state assets through "management buyouts" and other murky methods has come to be known as the "original sin" of China's modern business world and there is barely a successful entrepreneur who is innocent.
Unless the government intends to lock up all its captains of industry, it must come up with a way to legitimize their ill-gotten gains. For many in China, the new property law is more about this than protecting the rights of individuals to own and invest in private property.
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