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Private Property Amendment Hailed by Chinese

"Lawful private property is not to be violated." This simple but significant sentence is likely to enter China's constitution in March.


From the new rich to ordinary citizens, the would-be amendment will affect the lives of almost every Chinese.


The draft amendment to improve the protection of lawful private property and the promotion of the private economy has been hailed by private entrepreneurs, who have accumulated wealth in the past two decades.


"I'm encouraged and excited," said Li Linkai, general manager of Rongtai Industrial Co. Ltd, a private company based in south China's Guangdong Province.


With the clear declaration that "Socialist public property is inviolable", the present constitution has weaker, more ambiguous words about private property.


The constitution says the state protects the right of citizens to own lawfully earned income, savings, houses and other lawful property and, according to the law, protects the right of citizens to inherit private property.


The draft amendment to the constitution puts private property on an equal footing with public property.


"The present constitution does not include quite a few items of private property, such as means of production, non-work-related income and intellectual property, in the category to be protected," said Tang Haibin, director of Research Department of All-China Federation of Industry and Commerce (ACFIC).


The ACFIC, the country's largest organization of entrepreneurs, had handed in proposals to amend items on the protection of private property in the constitution to the Chinese People's Political Consultative Conference (CPPCC) in 1998, 2002 and 2003.


"The private economy has grown rapidly since China adopted economic reform and opening-up, especially since 1999," Tang said. "It faces stumbling blocks in the law and the demand for equal protection of private and public property is growing."


The category of protected private property would be expanded and the power of the law would be enhanced if the draft amendment were adopted, Tang said.


The state has the right to expropriate or collect private property in line with laws in the public interest, but has to compensate owners, under the draft amendment.


Tang said the draft amendment set up a critical rule to curb public power and guarantee private owners compensation if they suffer losses in the public interest.


By November last year, China reported 2.96 million private companies with registered assets worth of 3.35 trillion yuan (405.08 billion US dollars). Private companies contributed to 23 percent of gross domestic product in 2002.


According to Forbes magazine, Ding Lei, the richest of the 100 richest Chinese, held shares of his company Netease, one of the leading Chinese websites, worth 7.6 billion yuan (918.98 million US dollars).


"The draft amendment will eliminate entrepreneurs' hidden worries about the security of their assets and boost their confidence in long-term investment," Tang said.


The proposed amendment is hailed not only by the wealthy elite, but also ordinary citizens who feel they have suffered injustices.


"We are not always so confident in representing private clients as sometimes judges lean towards the public party," said Liu Weiping, a Shanghai-based real estate lawyer, who has represented individuals in cases of illegal demolition of homes by local governments and developers.


"With the constitutional guarantee of private property, local governments and real estate developers won't recklessly level private residences as if it is in the nature of things," he said. "We will also be more confident in fighting for compensation for victims."


Writing private property protection into the constitution will exert a great influence on changing government work styles, and safeguard the rights of citizens, legal experts say.


The draft amendment was passed by the Standing Committee of the National People's Congress (NPC) in December last year and will be handed over to the second NPC annual session in March.


The principle to protect lawful private property should be adopted in other laws, such as the Civil Code still being drafted, said Prof. He Weifang, of Beijing University Law School.


In October last year, the Communist Party of China (CPC) also said in a crucial decision on economic development that the country will work to remove barriers in laws, regulations and policies that hold back the development of the private economy.


The 1988 constitutional amendments stipulate that the state permits the private economy to exist and grow within the limits prescribed by law as a "complement" to the public economy. In 1993, the term "socialistic market economy" was added. In 1999, the role of the private sector was upgraded to make it an "essential part" of the socialist market economy, while the 2003 proposal suggested "encouraging, supporting and guiding" the private economy and that "lawful private property is not to be violated."


Economists say such a "privatization" road map shows that the Chinese economic system reform, with property rights reform at the core, has been steadily promoted and can never going to be reversed.


(Xinhua News Agency January 12, 2004)


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