IP and Law

Does the Property Law protect private property?

China Law Blog recently published an overview of China's new property law, in four parts. The posts focus on immovable property (i.e. real estate), not the sections of the law that deal with movables (personal property).

It is an interesting look into the topsy-turvy, though-the-looking-glass world of Chinese law. For example:

The Property Law provides for certain special measures limiting ownership rights in land and buildings.

... Ownership of land and buildings is subject to state seizure by through eminent domain. The state has the right to take land owned by collectives and buildings and personal property owned by private persons for a public purpose. The state is required to provide compensation for such takings. The state taking farmland for commercial buildings and taking urban residences for urban redevelopment is a major social issue in China. Abuses in this area are common, well documented, and a cause of unrest. Two major issues arise. First, what is a public purpose? Many Chinese argue urban redevelopment and commercial development for manufacturing and leisure activities are not public purposes. However, the vast majority of land and building seizures are for just such primarily commercial purposes. Second, what is the standard for determining compensation when land and buildings are taken by the state? Many Chinese believe the standard should be fair market value, not the tiny amounts of compensation currently paid.

Earlier drafts of the Property Law included various provisions that would have defined "public purpose" and would have required payment of fair market value or some market based compensation for land and buildings. However, all of these protective provisions were eliminated from the law as adopted. In the commentary issued by the NPC, the drafting committee admits the statute is purposely vague in not addressing these issues. The controversy over these issues was too great and an attempt to resolve them in the Property Law would have indefinitely delayed adoption. The NPC candidly admits these major issues await resolution in some other forum.

It seems we have a law that was originally intended to protect private property, but it defines its terms so vaguely that it seems nothing is protected at all.

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