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Knowing China's New Property Law

General Principles

The Property Law contains three Divisions.

A. Division 1: Fundamental Principles

A major focus of debate over adopting the Property Law centered on two concerns. First, many opponents of the Law argued that providing for private property would violate the fundamental principles of China's socialist system. Second, many opponents argued that allowing for private property would protect prior illegal acquisitions of state property by local officials and would prevent the state from taking back such property. The eight sections of this division center on responses to these concerns.

The relative protection afforded to state owned property versus privately owned property is the most important issue addressed in this division. Many opponents of the Property Law argued for giving state property rights priority over individual property rights. The Property Law rejects this position by according equal protection to the property rights of the state, the collectives and private individuals. Section 4. The drafters provide two reasons for why this equal protection is necessary. First, the purpose of the Property Law is to provide for property rights as the basis for a market economy. Since the state and collectives are heavily involved in ownership rights in the economy, it is necessary for the smooth functioning of the economy to treat them on the same basis as private persons. Second, the drafters refer to the most recent revision to the Constitution which provides that the party (CCP) and the state must represent the vast majority of the people. The drafters quite openly pointed out that the vast majority of the people in China insist on individual property rights being on an equal footing with the state. The drafters essentially indicate they had no real alternative on this issue.

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