BEIJING - China seems to be moving in the
direction of a new property law, a need we
identified in Part 1 of this report (Hu Jintao and the new
China, June 28).
The approval
of such a law has been postponed for almost two
years because of strong opposition and the great
difficulty of setting in order the present chaos
of all that could be defined as property in China.
One sticking point is the definition of collective
property, in which a village controls the local
land. How hard should be these rights? Should the
rights to such property be divided among the
villagers, or merged in the person of the village
chief?
If the rights were divided, they
would provide for better management of the land
while enabling a "political" challenge to
the
authority of the village chief. But then there is
the issue of how the villagers could claim
property. At present, if someone moves out of the
village he loses all claims to the property
without compensation, while someone who moves in
automatically is entitled to a stake in the
village land. Therefore village chiefs have
relatives and cronies move in and force
adversaries to move out. Clearly this must change,
but how to do it without causing a riot among
thousands of villagers where the interests of a
large part of the population are tied with those
of the village chief?
Then there is the
even larger problem of defining private property,
its limits but also its rights. But no matter what
the difficulties, the new property law must pass.
This was the message between the lines of a
People's Daily commentary [1] urging government to
press ahead and deepen reforms "of the economic
system and including political, cultural, social
and of other aspects of the system". This is
because "reforms are all-encompassing. They do
include the economic basis as well as the higher
construction."
However, the crucial
sentence was about private property: "Encourage,
support and guide without any hesitation the
development of the non-public economy," said the
commentary. It did not forget the public economy,
but it did not make clear whether there is a
difference between state and collective property,
that is, between what is owned by the village and
what is held by the state at, for example, the
central or provincial level.
There is huge
opposition to regulation by law of private
property. The opposition is twofold: on principle
and on real interests, and the two complement each
other but are not consistent with each other.
In principle the opposition is
straightforward and noble. A new law on private
property could whitewash all improper acquisitions
of the past. Millions of people who took advantage
of the their position or family relations to
acquire land and property in the murky times of
the move from a socialist to a market economy
would have their acquisitions redeemed and
legalized. In the meantime, millions of other
people who were honest and law-abiding, who did
not take advantage, or had no opportunity to do
so, would be officially poor, without any
compensation for their honesty. Yet again,
thousands of unlucky people tried to grasp the
opportunities at hand but got caught, and now live
in prison or got the death sentence. If there has
been unfairness in the past, the state should not
now stamp its seal on it by legalizing it.
Millions would be up in arms about it.
On
the other hand, there are the less noble souls who
fear that the legalization of property will end
their present privileges. If the peasant has clear
rights over his land, then the village chief can't
act as a middleman, pocketing huge margins between
the price paid by a real-estate developer and the
funds received by the peasant. Besides this,
corrupt tycoons have nothing to gain from a new
property law. Their money has been taken abroad
and has come back in the form of foreign
investment, so their rights are already protected.
If the state of confusion over property rights
goes on, they will have more time and
opportunities to play their tricks, prolonging the
bonanza.
In fact the new property law
would harm the interests of this new class of
"robber barons", not those of the poor. If the
current confusion over property rights goes on,
the poor will be ruined and the robber barons will
make the country barren. The alternative is not
between an egalitarian country and one full of
wrongs. The alternative is between many wrongs and
fewer wrongs - unless, of course, we think a
communist paradise can be of this world. But how
many people in China want to go again through the
Great Leap Forward, the Cultural Revolution or
even some kind of Sovietized economy making
everybody poor?
But then there is the
greater political question mark. As China's
leaders are steeped in Marxist education, they
know that legalization of property rights is the
first step toward political rights. People with
legal property will want to defend it, and if
their property rights are guaranteed, their
defense will be fully legal, and it will be a
political right. One could easily see where this
would end - a massive political change, suggested
by the People's Daily and announced by President
Hu Jintao during his speech at Yale University on
April 22 during his trip to the United States. Hu
said that by 2020 the Chinese political landscape
would greatly "improve", meaning (1) that the
political system now is not too good, and (2) that
by then we can expect greater democracy.
A
reference to greater democracy in the future and
larger political reforms was the main thrust of a
speech that Zhang Yi, from the Society of Strategy
and Management, gave at the Bilderberg conference
held in Canada this month. Strategy and
Management, which used to publish a homonymous
journal, is a non-governmental organization with
Chinese characteristics and strong bonds with the
government but also a high degree of independence.
Zhang Yi's speech was exactly in line with Hu's
Yale speech and expanded on it.
By 2020
China should have a per capita gross domestic
product of some US$3,000, if it grows at the
present speed, without taking into account a
revaluation of the yuan. That per capita GDP is
considered in China some kind of threshold for
democracy. With that much money in their pockets,
people will want to have rights and defend their
property.
The ideal direction is then set:
slow movement from property rights to a more
democratic system around the year 2020, when
China's GDP could be some $8 trillion (without
yuan revaluation), safely the second-largest in
the world after the US.
Hu's official
ideological adviser Zheng Bijian [2] has said the
resurgence of China will have to be linked to
peace - only this can defeat the two ideas that
besiege the country now, the theory of China as a
threat and the theory of China's coming collapse.
He stressed the need for greater reforms,
political and cultural, to improve the quality of
the life and open up for greater democracy. No
timetables were set, but improving the level of
civilization of the Chinese people will be a
long-term project.
But two forces at work
may have different timetables for both economic
and political reforms in China. One force wants a
slower pace, while the other may impose a faster
one.
The bureaucracy factor The
bureaucracy in China would like a slower pace for
reforms, if not a total halt. This is a relatively
recent phenomenon, and the reasons for it are
simultaneously simple and complex.
When in
the late 1970s Chinese leader Deng Xiaoping
launched his reforms, government and Communist
Party officials were in total disarray. Some of
them had been criticized at the beginning of the
Cultural Revolution, had then been rehabilitated
and were reinstated in their posts, while others
had moved in during the Cultural Revolution and
now were sidelined to make way for the
rehabilitated ones. Both groups felt wronged by
the party, both were disaffected by its ideology,
and nobody had a real turf to defend.
In
such a situation, the bureaucracy had no reason to
oppose reform. On the contrary, the reforms were
an occasion to make some extra cash. There were no
clear lines, either ethical or legal, between
right or wrong in the new market economy, and
nobody clearly forbade officials (especially at
the beginning) from trying their hand in business.
Deng simply said, "To get rich is glorious" - he
did not say, "To get rich in an honest way
is glorious." Besides, after three decades of
communism, where all economic exchanges were
wrong, who knew what was honest and what was
dishonest?
Furthermore, it seems that Deng
clearly nudged the officials to be entrepreneurial
- it would make the country rich and would build
political consensus for the reforms. The officials
had a stake in the reforms, they wanted them, they
would make money out of them. Corruption was rife,
and not limited to a small group of high officials
- it trickled down at every level, to create a
large mass of consensus. So corruption was also
the immediate fuel to start and move the engine of
reforms.
But corruption needs a murky
situation, privileges to be sold or granted at
whim. Citizens have to beg officials to get away
with something. But if the picture clears, if the
economy starts rolling and property rights
solidify, then corruption is an obstacle and has
to be done away with. But after almost 30 years of
reforms, the privileged positions of officials
have become consolidated. If reforms move fast, if
property rights become clearer, officials lose
power, privileges and concrete instruments to line
their pockets.
If the state grants the
farmer clear property rights over his land, the
local official can no longer buy the land and
resell it to a developer for a fat profit.
Developer and farmer will talk directly to each
other. And then the official will be obliged to
make sure no rule is broken by either party; the
official should step back and hope that nothing
happens requiring his intervention.
But
this is a very different profile from the present
official who takes everything into his own hands
and pushes reforms and change like the chief
executive officer of his locality, including land
transfer. The kind of official who will enforce
property rights is not available now, and it is
hard to imagine that the cooperation of China's
Central Party School with Harvard University's
Kennedy School of Government or with Italy's Alta
Scuola di Economia e della Finanza could make up
for this shortfall.
And so there is large
constituency that has privileges and rights to
defend and has had a positive experience in
running the country, and sees no reason to change
Furthermore, no country can function
without its bureaucracy, and even if some changes
can occur it is hard to eradicate habits ingrained
during 30 successful years and that are based on
an old tradition when officials were small
emperors and all the people went out of their way
to ingratiate them. China cannot turn its back on
officials who have brought the country this far,
and even if it were to do so, it simply could not
function without them. In any country the
bureaucracy is one of the most powerful
constituencies, and this is even more so in China,
the country that invented bureaucracy, that it is
held together by bureaucracy and where now the
emperor himself is a bureaucrat.
Yet other
forces press for change.
The Ma
Ying-jeou factor China must change because
of Taiwan and because of Ma Ying-jeou. The
"pro-independence" Chen Shui-bian is done for -
even if he doesn't resign as president of Taiwan
he will be a lame duck. Meanwhile
"pro-unification" Ma Ying-jeou is rolling in. For
Beijing he represents a larger risk than Chen. The
possibility of Taiwan proclaiming independence was
extremely dangerous (it would have meant war
destroying both the island and the mainland) but
was also very thin. But Ma, chairman of Taiwan's
opposition Kuomintang (KMT), is a different kettle
of fish.
When talking about the possible
unification of Taiwan and the mainland, there is
the question of the two different systems in
Beijing and Taipei. If integration should choose
the most modern system, then Taiwan could push for
its own over that currently used on the mainland.
Furthermore, if there were reunification, the KMT
would try to set up shop in China and recruit new
members. It might want a deadline for democratic
elections in China where the KMT could run against
the Communist Party.
These are all
theories, just floating ideas. But clearly the
probable election of Ma as president of Taiwan in
2008 could start talks on reunification. If these
were successful, Hu would then have outdone all
his predecessors, including Mao Zedong, because he
would have managed the peaceful reunification of
China. But then he would also have to face the
urgent matter of political reforms, of
accommodating KMT requests. Ma, or whoever is in
his place, may not want to wait decades to regain
a position in Beijing.
But the KMT
requests are just the opposite of those coming
from local officials on the mainland. Thus any
kind of scenario could be imagined for the clash
of the two trends, the domestic one embraced by
mainland officials, and the external one, Ma
Ying-jeou. The eight years during which Ma could
be in office in Taipei, from 2008 to 2016, could
be very shaky for Beijing, as that will bring
China very close to the 2020 date of Hu's speech.
But at the same time, while reunification
is a quasi-religion in China, the terms for this
reunification are totally hazy. Beijing knows it
has to give up something, but the large
constituency of the retired old guard watching the
younger leaders over their shoulders are pretty
miserly. They know that the more Taiwan gets, the
less influence they might wield, and they could
always scream betrayal, accusing those dealing
with Taiwan of selling out. Yet reunification
cannot be achieved at no cost.
So Hu
Jintao is walking a tightrope, like a
revolutionary, ferrying the country into the
future, something that proves that behind the
caution, the formality, the detachment, and the
reserve, he might well be one of the most daring
leaders China has ever had.
Indeed, he
needs a lot of courage to move ahead even with the
first "insignificant" step of a law on property.
(This is the concluding article of this
report.)
Notes 1. Zhong
Xuanli, "Haobudongyao di jianchi gaige
fangxiang", People's Daily, June 5. It is
noteworthy that the commentary came out the day
after June 4, as if indicating that the
consequence of the Tiananmen Square incident on
that date in 1989 would be certain reforms.
2. Zheng Bijian, "Shixian wenming
fuxing he qiangguo meng", Xinhua, June 14.
Francesco Sisci is editor of La
Stampa in Beijing.
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