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Controversies of China’s Property Laws

Collectively Owned Properties in Rural China

In China, most, if not all farms are collectively owned - a tradition and practice dating back since the rise of Maoism, an ideology heavily influenced by Socialism.

China still retains the traditional concept of collectively-owned farmland in the rural provinces. This still remains as a reflection of its unwillingness to let go of its communist roots. A major problem stemming from this a large potential for abuse, as the critical decisions regarding the land and its use, are made by a small number of village leaders. While the recently enacted Property Law serves to provide some sort of legal leverage to prevent the abuse of power by those village councils, it remains to be seen if those tools are accessible or even used by the villagers – owing to many factors including local culture and fear of authority. Also, such rules may be disregarded by the committees or councils due to lack of enforcement. However, while critics may be skeptical of whether the changes in the LP clarifying the issue of collective ownership will make a difference, such changes are still welcomed by proponents of the Western and Free-market world.

Maoist roots v Acceptance of Free-market Economy

With the passing of the 2007 Law of Property, a number of local legislators fear that “while the new property law would undoubtedly increase protection from home owners and prevent land seizures, it would also erode China’s socialist principles”. These voiced-out concerns by the select group run head-on against capitalism and the principles of a laisse-faire economy have taken root in most of the world, and have been attributed to the keen and close cooperation of many countries. See also Thus, it is controversial whether China – an emerging world superpower – intends to open its doors fully to the Western world, and its ideals of free-market liberalism, or whether it will continue to differentiate itself while still insisting membership in such organisations.

Governmental abuse through a Catch-all phrase of “Public Interest”

The Chinese government, while liberalizing its property laws, has still preserved its right to reclaim any property from an individual, as long as there is a public policy consideration. In 2004, it amended its 1982 Constitution to include that the Government has to pay the person compensation for expropriation (zhengshou) or requisition (zhengyong). However, the article neither provides, either in the constitution or in any subsidiary legislation, for the quantum of the payment, nor does it stipulate that the payment must be proportional to the size of the land. However, in 2011, the Chinese Government released regulations clarifying this, which promise to provide more transparency and a fairer compensation system. Western critics continue to call for greater transparency, but such is a difficult state of affairs to arrive at, given the largely entrenched system of state bureaucracy in China.