China may change landmark law

HONG KONG: A landmark piece of legislation, which polarised China’s policymakers along ideological lines and became a powerful metaphor for the future of economic reform in the country, is expected to be passed during the 12-day annual parliamentary session, which opens in Beijing on Monday. 

The draft law on property rights, which was withdrawn from last year’s session of the National People’s Congress (NPC) following fierce criticism from “New Left” ideologues, will be discussed for approval, if necessary with further amendments, spokesperson Jiang Enzhu said on Sunday. The law seeks to protect private property ownership in China, effectively knocking down a pillar of Communist ideology in a country where landowners were once lynched to death. Currently, in the absence of private property rights, the Chinese cannot legally own land: they can only obtain land-use rights for varying tenures. 1

The NPC session will be the last before the meeting of the 17th Congress of the Communist Party of China, later this year, which is expected to see President Hu Jintao consolidate his hold on power by packing the Politburo with his appointees.

That ideological battle has been raging for a while now. For instance, leading Marxist theorist and Peking University professor Gong Xiantian Gong Xiantian took the campaign against the property law to the Internet in 2005, arguing that the it violated the principles of socialism and that its authors had “copied capitalist civil law like serfs.” In essence, said Gong, the law was so drafted to make it sound as if it would protect everyone’s rights without discrimination. But in fact, he said, “it protects a millionaire’s limousine and a beggar’s rod in equal measure.”

The reformist ideologues hit back. The head of the China Institute of Reform and Development, Gao Shangquan, criticised Gong’s online petition and mocked at the “paranoia” of the New Left, which he said believed that the reforms were guided by CIA-backed neoliberalists.

To which another leftist ideologue responded with a call for a class struggle modelled on the Cultural Revolution orchestrated by Mao Zedong.

Subsequently, the ideological gap between the two sides appeared to have been bridged when the Standing Committee of the NPC, which discussed a record sixth draft of the bill, reported that legislators had arrived at a consensus on major issues and had commended the bill for a “quick vote”.

That 45-page draft made “the protection of state, collective, and private property” the main principle of the legislation process; the balance between private property and state ownership, and the fact that the bill incorporated provisions that would prevent fraudulent acquisitions and mergers of state assets, helped overcome inhibitions from New Left conservatives. The NPC session is also expected to pass a bill that would end the preferential tax treatment for foreign-funded firms.

Lehman Brothers analyst Mingchun Sun said, “On the agenda of the conference is a proposal for the unification of corporate tax rates between domestic and foreign-invested firms. Currently, the tax rate is 33% for domestic firms, and 15-24% for foreign-funded firms. The consensus is that the unified tax rate will be 25%.”

The session is also expected to debate a slew of social policies that address rural unrest, the result of a widening social divide.