Road to legislating China's property law: never so tortuous, never so resolute

Legislation of other laws has never been as torteous and difficult as that of the property law. This is determined by the importance of the property law itself and changes in China's economy and society during a transitional period. The property law is an important component of the civil code. It is a basic law for confirming property, using property and protecting property. It involves both the foundation of a country and people's livelihood. Debates around the legislation of the property law are in essence a struggle between different interest groups.

2799 votes for, 52 votes against, and 37 votes abstain

On March 16, the Fifth Meeting of the Tenth People's Congress passed the "PRC Property Law" with high votes. According to the Xinhua News Agency, "China is sending a signal of further expansion in reform and opening up," and the "socialist market economy is being further perfected, and political civilization has taken an important step forward."
The Property Law, which civil law expert Wang Liming described as "very complicated to legislate" took 13 years to be issued. It broke the record for having gone through seven reviews, experienced unusual obstacles, and involving decisions that were made with great difficulty. Though there are still opposing voices, the general consensus is that the property law is "ripe," and cannot be obstructed any longer.

Difficult preliminary discussions

In January 1998, Vice Chairman of the NPC Wang Hanbin, who was in charge of legislation, entrusted six experts, two retired cadres from the Legal Work Commitee, and one judge to form a work team to draft the civil code. Their task was to draft the civil code and property law.

This was the last thing Wang Hanbin did before he retired. At the time, the draft contract law was waiting to be passed, and the opportunity for drafting the property law had arrived.

In 1994, the property law was listed on the legislation plan by the Eighth NPC Standing Committee. But pressed by economic development, contract law as a guarantee for market transactions had to be given priority. Contract law mainly regulates the circulation of property, while the property law mainly regulates the ownership and usage rights for property. Both "property rights" and "credit rights" are the most basic legal systems of civil code.

As the foundation for the entire civil code, property law is the most crucial link. The team for drafting the civil code proposed a "three step" strategy: first, get the contract law out in March 1999; second, starting in 1998, use four or five years (by about 2003) to formulate and pass the property law; and third complete the "China Civil Code" by 2010.

Liang Huixing, researcher at CASS Institute of Law, was appointed to draft the property law. A team under his leadership was actually established back in 1993, during which year in the spring, the socialist market economic system was written into the Chinese constitution.

Liang Huixing's draft of the proposal was finished in October 1999. And the NPC Legal Work Committee organized the first expert discussion meeting. Wang Liming, professor of Remin University Law School, NPC Standing Committee Legal Committee member, raised different opinions, and he established another work group, which brought out a second draft at the end of 2000.

"The content of the two drafts were actually not that different," says Liang Huixing. The greatest difference being: Liang's draft divided ownership into real estate ownership and movable property ownership, his basic principle is "both are equally protected." And this is called "monism." While Wang's draft divided ownership into "state-owned, collective owned, and privately owned," that is, "tri-division." Yin Tian, professor of civil and business law of Peking University says, dividing real estate from movable property is a technical division. It is "detached from ideology," and "relatively aloof." "It gives more consideration to property law itself as an independent legal rule, and presents a clear separation between public law and private law." While "Tri-division" is based on the current situation of three types of ownership. "It pays attention to ideology and current policies, and is closer to Chinese legal characteristics."

Sun Xianzhong, a member of Liang Huixing's team, researcher at CASS Institute of Law, remembers that when Liang's draft was discussed, somebody questioned, "Not emphasizing the state interests, is it still socialist law?" Yang Lixin, team member of Wang Liming's group, professor at Renmin University Law School, also believes that from an academic point of view, he agrees with Liang Huixing. But "tri-division" "is closer to reality.

The "tri-division" maintains the current classification of property ownership of current Chinese laws, and it receives support from the NPC Legal Work Committee. Yin Tian says, "tri-division" works because state-ownership cannot be avoided, no matter what we do. And "if we leave it as an isolated word there, it will look very strange." Plus, "if we don't give an emphasis to state-ownership, it will be a problem to pass this law." Jiang Ping, leader of the civil code drafting group, tenured professor of Chinese University of Politics and Law, says, in the eyes of the Legal Work Committee, there is no way Liang's "monism" would pass.

At the end of 2001, NPC Legal Work Committee civil law division formulated a "draft for discussion" based on Liang and Wang's drafts. The format adhered mostly to Liang's draft, while the ownership classification followed Wang's "tri-division."

The "draft for discussion" at the same time emphasized equal protection for all ownership types. The principle of equal protection is the guiding thought for property law. Wang Liming says to this newspaper that individual stipulations do not reject the protection of other ownership types. But in Liang' eyes, it only took "half a step" in equal protection. In the chapter on "ownership," there was no stipulation that "state property is sacred and cannot be violated." However, the three types of ownerships are stipulated separately in three chapters. "Just like before reform and opening up, one had to disclose one's family background in order to get into college," says Liang Huixing, separation implies unequal treatment. "First the format must be equal."

Before the academic community discussed Liang and Wang's differences, in 2001 China joined the WTO. And Li Peng, who was NPC Standing Committee chairman at the time, proposed the initiation of the three step strategy and start legislating the civil code. Civil law experts were directed towards formulating a civil code. The property law already has a "draft for discussion," so it was not assigned to anybody else. Differences between Liang and Wang are carried over, both men wrote their own huge drafts of the civil code.

December 23, 2002, at the 31st meeting of the Ninth NPC Standing Committee, property law, as a chapter of the civil code, was reviewed for the first time. The majority of the standing committee members believe that the civil code was not ripe for review, "it's best to pass individual laws first." Thus civil code was temporarily shelved, and formulation property law was pushed again.

In 2003 NPC was reelected. Liang Huixing as a CPPCC member proposed to abolish this "federation" civil code draft. His proposal was not adopted, and he ran into disputes with the legislative body. This main promoter of "China's civil code" announced that he will no longer participate directly in academic discussions involving the civil code or the property law.

In March 2004, the stipulation that "Citizen's legal private property cannot be violated" was written into the Constitution. And whether the property law will clearly "equally protect private property," was decided.

Over ten thousand proposals from citizens

The new Tenth NPC Standing Committee included the property law in the "10th Five-Year Plan" legislative plan, and was expected to pass it at the Third Meeting of the Tenth NPC in 2005. However, it was not until October 2004 that the property law was reviewed by itself for the first time, which was the second review.

Some scholar revealed that because in 2005 the NPC wanted to pass the "Anti Secession Law," the property law was shelved again.

Sun Xianzhong sat in on the discussion for the second review. He believes, the main reason why property law was postponed is because of insufficient academic preparation. Apart from the standing committee members who didn't understand a thing, many civil law experts also knew little about property law. "They can't even reach a consensus on basic common sense." Because of this, "there were so many versions of revision proposals."

For instance, Sun Xianzhong advocated that one should pay a reward for property lost and found, because safe-keeping involves costs. Many scholars asked "How are we going to educate our children?" A famous old professor asked: "If I put my bag under your feet, and then you ask me for a reward, would that be possible?" Sun answered: "We are talking about lost property here, can't you find your own bag?"

Detached from the civil code, the property law underwent a revision before the second review. In August 2004, the NPC Legal Work Committee invited over ten experts to revise the draft in eight days.
Prof. Meng Qinguo of Wuhan University remembers: "The first review draft was attacked from both sides, some people said protection of state-ownership was too much, some said it was too little."
At this time, Hong Kong economist Lang Xianping attacked Kelon Electric Appliance Co's chairman Gu Chujun for "stealing" state-owned assets using different ploys. The loss of state-owned assets became a focal point for the media. Thus the third great debate on reform broke out.

The second review of the draft made stipulations on the ownership of state-owned enterprises and farmers collective ownership more detailed. Someone calculated that stipulations on "state" and "collectives" far exceed those on "individuals. However the three types of ownership were put under one chapter and more details were given to protecting private property.

The third review was not until June 2005. The most obvious changes were clearly stipulating: "State, collective, and private ownership are protected by law. Any organization or individual is prohibited from using any means to infringe on or sabotage state, collective or private property."

July 10, 2005, the NPC Standing Committee office published the draft property law and solicited opinions from the entire nation.

October 2005, the "fourth review" of property law was held as planned. How over 10,000 citizen proposals affecting legislation became a focal point. The ownership of citizens' real estate was a hot topic; "divided ownership for the same building" attracted attention among urban house owners; building plot leases could be renewed automatically after 70 years; and the suggestion of "allowing business land lease rights to be mortgaged" was a bold one.

At this point, property law entered a stage of citizen legislation. Civil law experts were optimistic, and they estimated that by end of 2005 after another review by the NPC Standing Committee, property law would be submitted for vote at the fourth meeting of the 10th NPC in 2006. What they didn't know was, among the opinions of the 10,000 citizens, a special letter was impacting the legislative progress.

Saving the legislative progress

August 2005, Gong Xiantian, Peking University professor of jurisprudence, wrote a letter to the CPC Central Committee and the People's Congress. This letter was entitled "A Property Law draft in violation of the Constitution and deviating from the basic principle of socialism" was not responded to by senior leaders. Gong then published the letter on the Internet, which led to a big debate on property law legislation among people from all walks of life. Gong Xiantian accused the property law of violating the Constitution, because the draft did not mention the words "socialist public property is sacred and cannot be violated," and instead attempted to replace this with the spirit and principle of "private property is sacred and cannot be violated."

He also says the property law will accelerate the privatization process and promote polarization. "Equal protection" hitherto nobody objected to, but also became a hot topic. Gong made his famous statement, "you cannot protect the walking stick of a poor person the same way you protect the rich man's BMW and villa."

September 26, 2005, NPC Chairman Wu Bangguo held a discussion meeting and proposed three principles for revising the property law. To put it simply, the three principles are: adhere to the correct political direction; set foot in reality in China; and mainly solve urgent issues in real life that require a standard, and don't try to be everything at once.

December 7, 2005, a "seminar on difficult issues in China's Property Law" was held in Guangzhou. "Everyone was nervous" says Yang Lixin. After the meeting, scholars co-signed a letter to the CPC Central, asking that the legislative body rid itself of unnecessary disturbances and resume the normal legislative track for the property law. "It was like when the Red Army was defeated in Changsha, it went up to the Jinggang Mountains." says one scholar.

The Property Law was not reviewed in the NPC Standing Committee meeting at the end of December, nor was it passed in 2006.

Civil law experts came up with a lot of ideas to save the legislative progress on the property law and the entire civil code. In early 2006, the scholarly community in Beijing held seminars entitled "The Property Law and the protection of state-owned assets," "The Property Law and the building of a harmonious society in China," and others.

"The Property Law already embodies many basic economic systems, including the public ownership of land, are there any other productive material more important than this?" says Fu Dingsheng, professor of Huadong University of Politics and Law.

Liang Huixing, who no longer appeared at any meetings about the property law, conducted an internet debate with Gong Xiantian. The names they gave each other were: "that famous civil law expert from the highest national law institution," and "some professor of jurisprudence." Liang also wrote at the end of every article: "Copyright statement: welcome free circulation by all media."

Jiang Ping believes that the so-called violation of the constitution actually shows that some people are unhappy with the reform. This dissatisfaction goes far beyond the legislation issue. In 2005, though the third great debate about reform was cooling down, it was still continuing. It was at this sensitive time that the Property Law was labeled "capitalist" or "socialist," and got involved in a dispute about whether the reform was success or a failure.

Jiang Ping took part in drafting the civil code. This law passed in 1986 had a chapter relevant to property ownership, entitled "Property rights and the right of possession related to property rights." He said, at the time someone raised the concept of "ownership," it was immediately drowned by main stream voices. Because "that's bourgeois, and doesn't exist in Soviet Russian law." It wasn't until the end of the Cultural Revolution that a civil law system protecting citizens civil rights was reconstructed. But old legal thoughts still had a lot of influence.

In actual life, Jiang Ping was most concerned about three issues: the conscription of and use of farmers' land; the tearing down of urban residential housing and relocation of people; and the urban police' confiscation of the wares of small peddlers and venders. A famous argument of this civil law expert is: the civil code is "a protective wall of private rights built under the public rights of the state."

Balance and concessions

"The biggest difficulty of the Property Law is that it involves the interest of all groups, so the fundamental is to find a point of balance." says Jiang Ping.

Feb. 2006, Zhou Ruijin, former chief editor of People's Daily, published an article entitled "Reform and not waveri" (signed Huang Puping), which expressed the concern: "China has again come to a historical turning point. In the process of building a comprehensive well-off society, we face a time when domestic contradictions are flareing up in large quantities while international conflicts are also becoming frequent. There has appeared in society a new trend of negating reform and opposing reform. These people take new questions and new contradictions that have appeared in the process of reform and brand them as the evil fruit of worshipping western neo-liberalism. They criticize and negate these, as if we are in another round of debate concerning capitalism or socialism."

During the NPC and CPPCC the same year, General Secretary Hu Jingtao and Premier Wen Jiabiao openly said we will persist in the direction of reform and not waver. The property law was included in the legislative plan for that year, and put on the fast track.

August and October of 2006, the Property Law underwent its fifth and sixth reviews. The fifth review added the Constitution's stipulation about the basic economic system. And the sixth review added on top of Article One "This law is formulated according to the Constitution." After that, whether it was scholars involved in the drafting or NPC officials, everybody emphasized the "Constitutional legality" of the Property Law.

The fifth review was the first review after Gong Xiantian's "open letter" disturbance. Hu Kangsheng, vice director of the NPC Legal Work Committee said at the review: "Persisting in China's basic economic system and offering equal protection to the property rights of the state, collective and individuals are a unified organ. Without the former, socialist nature will be changed. Without the latter, we will be violating the market economic principle, and this will damage the basic economic system." "Legislators must make clear their stance." says Liang Huixing. Plus this revision of the Property Law also "made some concessions."

"Can't go too much before our time, nor can we stay too much behind." According to Jiang Ping, "No law is forever. It is good if it can last ten years. At this stage, a law cannot be perfect. We cannot hope to use the Property Law to solve all our problems."

Wang Liming says, legislation by necessity must stay ahead of the times. But only if conditions are ripe can we make some stipulations that break through some systems, for instance, break through the "70 year barrier" on construction land
.
Though debate about the reform is quieting down, social contradictions reflected by the debate, anything to do with property, will all reflect upon the Property Law.

Apart from the phrase "according to relevant laws," which has been kept, more controversial issues have been deleted. Yin Tian says, the principle of "the rights of possession through presumption" which is very important in Property Law, was read by some scholars as "protecting bad people" and deleted. "Obtaining on good will" relevant to the security of a transaction, was misread as pardoning original sin, and almost taken out. Deletion also includes "pawnee's right," "rights of habitation," "property rights of religious organizations," and "positive prescription."

Wang Liming admits that shelving some debates is necessary in order to get the legislation done. But he cannot predict now whether the target of accomplishing the civil code in 2010 can be met.

Jiang Ping discovers that the manuscript becomes "simpler" with each revision. "As a rule, the Property Law should be detailed, so that it's easy to execute." He says, "For instance, to whom does disgard belong to? Some say, doesn't "discard" mean "throwing out garbage"? Why do we need a rule for this?" He believes that "The seventh draft of the Property Law does not have a long-term vision. Some things we can already see in current reality, ahd the system should make timely adjustments."

For a long time, China's judicial development lagged behind practice. Sun Xianzhong believes that "crossing the river by groping at stones" shows a distrust for other people. Why can't we borrow from other people's experience and theories? You can cross the river very well through bridges others already built--"What is it that make us lose the courage to proceed?"

by reporter Su Yongtong