Keeping the wealth

China's new property law, passed in March by the National People's Congress (NPC) after five years of debate, has created unlikely allies in the fight for stronger individual rights of possession.

Two distinct pressure groups have emerged in support of the law. The first is the mostly urban entrepreneurial and business class that wants to protect capital and investment. The second comprises farmers and rural peasants angered by extensive and arbitrary land confiscation by local cadres, behavior that has been a major source of embarrassment for the Chinese Communist Party (CCP).

"This law will bring a dramatic change in people's conception of property and property rights in China," said Jeanette K. Chan, a partner at the law firm Paul, Weiss, Rifkind, Wharton & Garrison.

"Before, China did not have any comprehensive rules governing the types of properties that could be owned nor what property rights and obligations people had and how they could be protected."

Divisive issues

The law was originally drafted in 2002 by the NPC Law Committee and has gone through an unprecedented seven readings. In July of 2005, a draft released for public comment received 1,543 opinions in 40 days, according to state media.

Backers of the law say it is the next logical step after a 2004 constitutional amendment sanctioned individual ownership by stipulating that "citizens' lawful private property is inviolable". A stronger legal framework, they argue, is needed to clarify the intent of the constitution.

The legislative language is more practical than ideological. It sets out to provide clarity and consistency for arbitration of simple property disputes and protect public property from the frauds and thefts that have laid waste to the assets of many a state-owned enterprise.

However, much of the focus has been on the clash between private property rights and China's socialist system.

Despite the practical intentions of the law and vigorous words from those who support it, a wide cross-section of society see it as a betrayal to the principles the People's Republic was founded on.

A draft was shelved after Peking University law professor Gong Xiantian blasted it online and a widely circulated petition from former government officials warned the law "overturned the basic system of socialism".

A revised version, intended to better balance the protection of public and private property, was put before the Standing Committee in December 2006. While the government is considered to be in lockstep in its march towards capitalism, the fight over the bill exposed the rift between the left and right wings of the party.

State officials used the language of egalitarianism to push the law to calm left-wing socialists and members of the New Left in the public and government.

Zhu Xiangyuan, a member of the NPC Standing Committee, was recently quoted as saying that secure property rights augment a "harmonious socialist society", as people secure in their possessions equates to a more stable society.

Uncertain outlook

But the law is just the first step and it is still unclear what effect it will have. For starters, the CCP still legally owns all the land. The intent of the law may be to balance public and private ownership, but both are under the control of the state.

Feng Xingyuan, an associate professor at the Chinese Academy of Social Sciences, worries that "a harmonious society will not be achieved if the state competes with private actors".

More and more, however, safeguarding the wealth of richer urban populations is a factor of safeguarding political stability so the government is continuing the transition in small and safe steps.

This view was summed up by NPC spokesman Jiang Enzhu shortly before the meeting: "If various property rights were not protected equally, the initiative of legally creating and accumulating wealth by the masses of people would be harmed, and national strength and social harmony would also be impaired."