No need to share after all, says China

By Tim Luard BBC News Online

China's long march from communism to capitalism sometimes seems more like a stampede.

As the rush to riches continues to gain pace, a major milestone is now being put down, enshrining people's legal right to own private property.

Many Shanghainese now own their own apartments

The Communist Party's leadership has tabled amendments to the constitution which amount to official confirmation that the country's economic future rests with private enterprise.

The proposed revision on private property protection puts private assets, seized by the Communists when they took power in 1949, on an equal footing with public property, which is supposedly "sacred and inviolable".

Rule of law

On the face of it, the change is merely a belated recognition of the spectacular changes that have taken place in the 30 years since former leader Deng Xiaoping abolished the communes and unleashed the free market forces so detested by his predecessor, Mao Zedong.

A market economy depends on property protection Peter Nightingale, China Britain Business Council

As proof of that change, many Shanghai families now own their own housing and in the neighbouring province of Jiangsu, the private sector accounts for 90% of economic output.

But some see the proposed amendments as being vitally important in their own right for the continued development of China's economy - already the fastest-growing in the world.

By strengthening the rule of law in a business environment plagued by an almost total lack of legal protection, they are expected to bolster confidence in private investment, both Chinese and foreign.

Freedom and democracy

Giving respect to personal property rights and ownership of the productive means is highly significant, says Professor Zhou Dunren, a lecturer on Chinese economic reforms at Fudan University in Shanghai.

Landlords are no longer the demons they were in Mao's book

"This is the highest law in the country. Once something is in the constitution it is hard to reverse it," he told the BBC's World Today programme.

Some Chinese analysts see the change as having a largely symbolic importance, but one that goes beyond the purely economic sphere.

It is a very positive move towards liberty, freedom and democracy, according to Beijing-based economic consultant Dean Peng.

"Private property is the economic foundation for them all," he told the BBC's East Asia Today programme.

The proposed constitutional amendments make no mention of political reforms as such, though they do demand for the first time that human rights be respected.

Rather, they seem driven at least partly by China's need to comply with its obligations as a new member of the World Trade Organisation.

As long as there are no limits on state power, businessmen cannot feel secure Dean Peng, Beijing economic consultant

Foreign property in China is already much better protected than Chinese, according to Mr Peng, but many international businesses have complained of a lack of a legal safety net in areas ranging from land use to employment practices to intellectual copyright.

Foreign companies are cautiously welcoming the proposed property protection as the start of what they hope will be a series of legal changes making it easier to do business in the world's most populous country.

"In principle it's an extremely important piece of the jigsaw puzzle of making China a proper market economy, because a market economy depends on property protection," according to Peter Nightingale, chief executive of the China Britain Business Council.

"Land and buildings are the basis of a business... but the question of their ownership in China until now has been a slightly grey area, even for foreign investors who have gone in with Chinese partners," he told BBC News Online.

Legal caveat

Exactly what the proposed new rules will entail is still unclear, but earlier discussions focussed on such areas as giving equal market access to all enterprises, whether state, private or foreign-funded, and eliminating "irrational fees" - or illegal local taxation.

The wording of the amendment made public on Monday differs from a simpler version put forward by supporters of more fundamental changes to the Constitution.

"Private property obtained legally shall not be violated," it says, and the country may expropriate it "for the public interest" only if it pays compensation.

By including the phrase "obtained legally," the amendment still ensures that the ultimate arbiter, on property rights as on everything else, remains the Communist Party.

Three decades after China began its shift to a market economy, any return to the Maoist or Marxist-style past is widely regarded as out of the question.

But there are those who point to previous dramatic policy reversals and who remain wary about the future, so long as the Communist Party retains absolute power.

"The point is whether businessmen feel secure about their private property", says Dean Peng.

The new proposals have been welcomed by foreign investors

"And I don't think they can do, as long as state power is not limited. People fear that one day the regulations could change and their property could be expropriated."

The other draft constitutional amendment proposed this week - and due for approval in March by China's parliament - allows the broadening of the Communist Party's base to include businessmen - a move opposed by many intellectuals and labour groups who say links between party officials and the business elite have already become unhealthily blurred.

Landless

There has been opposition on similar grounds to the move to protect private property. Some say it simply legitimises the sale of public assets at knock-down prices, and should at least be balanced by legal reforms that would give greater rights to laid-off workers and landless peasants.

For years now, state-owned companies and collective farms have been sold off to well-connected insiders in often dubious deals.

But the new revisions to the constitution will benefit the broad masses and not just the rich and well-connected, says professor Zhou Dunren.

"Under the present circumstances almost every citizen has chosen to own private property. 95% will benefit," he insists.

"China is now at the preliminary stage of socialism," he says, referring to the official party jargon used by justify non-communist practices.

"It will take 20 or 30 years to complete the transition. But it is on the right track".