Major News: China Introducing Property Law

Communist China passed major legislation Saturday, protecting the rights of individuals to their private property. This is a major milestone towards creating a free market economy and a potential death knell for Chinese communism.

The announcement comes about 8 hours after I called for Chinese property rights in my blog post, China Reigns in Corruption; Markets Plummet. I don’t know what the connection is, I just wanted to mention that…

96.9% Parliamentary Vote

The National People’s Congress passed the Property Law of the People’s Republic of China by a 96.9% majority of the 2,889 legislators attending (NB: Wikipedia gets this percentage correct, while the BBC gets it wrong). Landslide votes are common in the Chinese parliament, which only meets once a year largely to rubber stamp policies pre-determined by the Communist Party.

What the Law Provides

The government is offering its guarantee to private business owners that it will no longer randomly seize property, thereby adding confidence, security, and incentives to Chinese business owners.

But There’s a Catch…

The Chinese Government will continue to own all land in China, only granting temporary land use rights to individuals.

So why is this a step forward? Consider the words of Vice-Chairman Wang Zhaoguo who told the Congress the law will “safeguard the fundamental interests of the people”, adapting to the new “economic and social realities” in China (quote translated from the Chinese BBC by Wikipedia). The Chinese Government is aware it cannot create sustainable growth solely through its cheap manufacturing export business. Chinese business cannot grow and innovate until business are given the right to keep and own their money and property. After five years of debating this law, the government is publicly accepting this reality.

Cause for Hope

Moreover, the wording of The Property Law of the PRC leaves it somewhat ambiguous what “property” refers to. As I understand it, the law may actually set precedent for much more than mere land rights, but may extend to all property. This is real progress.

I am not a big fan of communism. By an order of magnitude, Communism has killed far more people in the world than any other ideology. An estimated 72 million Chinese were starved or murdered under Mao Zedong alone. History shows that ultimately it is economics rather than politics, that defeats Communism. I am patiently bullish on China.

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