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China’s 10 Worst Laws

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Foreign Policy Magazine is out with a fascinating and very well done list of China’s 10 worst laws (damn, why didn’t I think of that). (h/t to Jeremiah over at Peking Duck)
I certainly agree with most of those on the list, but I hardly think it fair to put the New Property Rights Law on there. Here’s what Foreign Policy has to say about it:

What it says: A first, this law granted the right to property ownership by private persons.
What it does: Although one can own buildings and fixtures on land, the land itself still belongs to the state. The Chinese government also has a right to seize private property for “a public purpose,” a vague standard that is often exploited by commercial interests. The state must “provide compensation” for such seizures, but it usually offers a menial amount. Some analysts think that giving peasants in particular the right to sell their land would have tamped down rural unrest and helped millions find work and overcome poverty, but such a dramatic step was apparently too much for the Communist Party.

Though this law is not perfect, it is a giant advancement for China.
For an in-depth examination of that law, check out the following:
Part I, Introduction, is here. Part II, General Principles, is here. Part III, Rules Of Real Property Ownership, is here. Part IV, Real Property Use Rights, is here.

  • jin

    7 out of the 10 laws mentioned in the list are chosen biscally to do same old same old political attacks.

  • http://www.halfin-halfout.org/newyork ddjiii

    Hmm, I can’t help noticing that all of the negative aspects of the law noted (except for state ownership) are also true of property law in the U.S. – right to seize private land: check (and is there any society where the state doesn’t have this right?) vaguely defined public purpose, subject to abuse: check, menial amount offered to those whose land is seized: debatable, I guess. And despite all these flaws, is there any better system?
    As for public ownership, I actually think it’s not a bad system. Since (as I vaguely recall from my land use law class) the only meaningful basis of ownership are the rights to exclusion or destruction (help me here please, CLB) and the former can be obtained with a use right and the latter shouldn’t be allowed in the case of land anyway, what’s the problem? I have worked on development projects in the states in which title was owned permanently by a public entity, and it all went fine.
    So I guess I agree with CLB that there’s no reason for the land use law to be on the list.

  • http://beijingtaotie.blogspot.com/ Benjamin

    Dan,
    Why not do a post on China’s 10 Best Laws?

  • James G

    I agree that the property law is a major step in the right direction. It might also be a shrewd way for the government to put themselves in position to raise tons of revenue in the future, once people have become comfortable buying, then the government can drop a nice property tax on them…
    I’d like to know how often the Chinese government seizes land in comparison to how often land is seized under eminent domain laws here in the US. Locally, The University of Chicago has for decades used it and there is always a great deal of controversy surrounding it’s use.
    Also, there was Mayor Daley’s midnight razing of Chicago Mieg’s field airport, which left dozens of planes stranded after he sent bulldozers in the middle of the night to rip up the runways – they actually came in under cover of darkness and carved giant “X”s across the runway! Oh, and he didn’t tell anyone beforehand, not even the FAA or the people who had planes there, including Harrison Ford!
    Maybe we Chicagoans can call that “urban planning with Chinese characterics”?

  • http://twofish.wordpress.com/ Twofish

    The Real Property Law *didn’t* grant the right to property ownership to private persons, that was done years and years ago. It did clarify the process of transferring title and the details of ownership. It is a huge advancement since it reduces legal ambiguity, but it did *NOT* create any new rights to private property. That was done by a whole series of laws and regulations, and replacing a mess of contradictory laws and regulations with one law is a huge step.
    Also as far as rural land goes, it did require that land transfers from agricultural to non-agricultural uses now have to be approved by higher levels of government who have fewer conflicts of interest.
    Also, it’s not clear that that giving peasants to sell their land would reduce pressures. As the law currently exists, every peasant that lives in the countryside has a legal right to farmland which they can farm (which is actually why peasants sometimes choose not to change their hukou). This means that if things go badly for them in the city, they can go back to the country and survive.
    If you change the system so that peasants can sell their land, it’s likely that they will forced to do so at below market rates and at bad terms, and that will increase rural unrest. Looking at the sort of things that happen in Latin America that does have a system of private land ownership, I’m not convinced that having peasants give up their legal right to land would make things better for them.
    Chinese law requires the government compensated peasants for the “use value” of the land (i.e. the amount that farmer would have made from the land had they kept it). In the richer provinces this is usually way below the market value of the land. However, letting peasants sell land doesn’t help peasants in the poorer provinces where this doesn’t happen. Also making it easy for people to cash into a real estate bubble may not be a good thing.
    Finally, if take away land sale revenue from local governments then you need to find some other way of funding schools and hospitals.

  • http://twofish.wordpress.com/ Twofish

    For China’s best laws. One would be Article 8 of the Legislation Law which says that no one may be charged with a crime except by a national law.

  • Zhongzhi Gao

    Basically, I agree in spite of concuring in some events. In addition, I would like to add the Law of the PRC on Security Administration to the list. In my view, this law is the worst one and must be annulled as soon as possible. One of the modern criminal rules is any person shall not be convicted without trial in court and Chinese law appears to honor it. But unfortunately, this law grants the police the power to de-facto convict a person without trial in court. It is said that the person punished under the law is not a criminal and will not be thrown into jail. But the fact is the most serious punishment under the law is three years detainment and it is even harsher and more draconian than two types of punishment under the criminal law.
    BR//Richard
    http://www.foreignpolicy.com/story/cms.php?story_id=4453
    1. Article 105 of the Criminal Law
    What it says: Criminalizes “organizing, scheming or acting to subvert the political power of the state and overthrow the socialist system” and “incitement to subvert the political power of the state and overthrow the socialist system by spreading rumors, slander or other means.”
    What it does: Although China’s constitution ostensibly guarantees the right to free speech and expression, statutes such as this one allow the state to suppress all criticism. Subversion charges are a common fate for China’s activist bloggers and journalists.
    My thoughts:
    I do not think China should abandon death penalty but I think we have too much death penalties under the Criminal Law. Basically, I think China should abandon death penalties for economic crimes such as embezzlement or bribery. But for those criminals against personal rights such as murder, homicide or rape should not be free of death penalty.
    2. Hukou (Household Registration) System
    What it says: Citizens are classified according to place of residence and socioeconomic status. Parents pass down their classification to their children, making hukou a form of social identity. Rural migrants are not allowed to relocate to cities unless they meet certain requirements, including a “stable job or source of income” and a “stable place of residence.”
    What it does: The hukou system, excoriated by critics as “China’s apartheid,” traces its origins to the fifth century, B.C. Reforms have lifted restrictions in recent years and enforcement has slackened off, but some provinces still have hukou on the books. Migrants who don’t meet requirements have trouble obtaining public services such as healthcare or education for their children. Some officials defend the system, warning that too-rapid changes will lead to soaring crime and social chaos. But earlier this year, a government-sponsored report suggested that hukou be scrapped altogether to grant farmers the same status as urbanites.
    My thoughts:
    It is not a precise understanding to say “Rural migrants are not allowed to relocate to cities unless they meet certain requirements, including a “stable job or source of income” and a “stable place of residence.” If it means to acquire Hukou, it is impossible for rural migrants to get it even if they satisfy the aforesaid requirements; but if it means to stay in cities, I don’t think it is an issue now.
    But generally, hukou system is a shame.
    3. Law on the Supervision by Standing Committees of the People’s Congress at All Levels (2006), Article 3
    What it says: It lays out the requirement of “upholding leadership of the Communist Party.”
    What it does: Along with the constitution itself, this law enables one-party rule by mandating Communist Party dominance in Congress. Technically speaking, China has eight registered minor parties. But thanks to laws such as this, they have little to no influence on government.
    My thoughts:
    Agree. At least it partly contributes to one-party dominance and autocracy in China.
    4. New Property Rights Law, 2007
    What it says: A first, this law granted the right to property ownership by private persons.
    What it does: Although one can own buildings and fixtures on land, the land itself still belongs to the state. The Chinese government also has a right to seize private property for “a public purpose,” a vague standard that is often exploited by commercial interests. The state must “provide compensation” for such seizures, but it usually offers a menial amount. Some analysts think that giving peasants in particular the right to sell their land would have tamped down rural unrest and helped millions find work and overcome poverty, but such a dramatic step was apparently too much for the Communist Party.
    My thoughts:
    Agree. But it is arguable for what constitutes the public purpose in most countries of the world, even in America. American Constitution says no property shall be taken for purpose of public use without just compensation. The court arguably and broadly interprets public use to mean public purpose. The federal supreme court spelled out that it is constitutional to sweep the poverty in blighted area in spite of any economic purpose.
    So in my understanding, issues on the side of China are the dual system of land tenure, the separation of land ownership and land use rights, lack of channels to settle disputes and lack of transparency in the process of land taking. By the way, Chinese property law says “public interest” instead of “public purpose”.
    5. Regulations on Religious Affairs (2005)
    What it says: Allows religious organizations to possess property, publish literature, train and approve clergy, and collect donations, but requires them to register with the state. Article 3 sets forth that religion can’t be used to “disrupt public order” or “harm State or public interests.”
    What it does: Requiring groups to register with the state grants the government the right of refusal over religious organizations. The language in Article 3 is intentionally vague and is often used against groups the government doesn’t approve, such as the Falun Gong. The government officially recognizes just five religions: Buddhism, Taoism, Islam, Catholicism, and Protestantism.
    My thoughts:
    Agree.
    6. Trade Union Law of the People’s Republic of China
    What it says: “The All-China Federation of Trade Unions shall be established as the unified national organization.”
    What it does: Limits workers to party-controlled All-China Federation of Trade Unions (ACFTU), which rights groups say doesn’t adequately protect workers’ rights. A new labor law passed in 2007 strengthened the role that the ACFTU could play in negotiating wages and benefits, but the union has traditionally favored management over workers and has not played an active role in defending such worker rights as overtime compensation and the ability to strike.
    My thoughts:
    Agree. So it is understandable why Europe and USA do not agree to give China the treatment of market economy in autidumping. Ironically, the Communist Party took power by abetting workers to overthrow the Guomindang ruled government and they stated they are representing repressed workers.
    7. State Security Law, Article 4
    What it says: Lists specific acts that endanger state security, but are still vague enough to encourage arbitrary enforcement.
    What it does: Activists and journalists are often prosecuted for Clause 1— “plotting to subvert the government, dismember the State or overthrow the socialist system,” or Clause 3—“stealing, secretly gathering, buying, or unlawfully providing State secrets.” According to human rights researcher John Kamm, 99 percent of people tried for endangering state security are convicted.
    My thoughts:
    No comments!
    8. Consumer Protection Law, Chapter II, Articles 7 and 8
    What it says: Companies are expected to maintain safety standards currently established by other companies, and businesses can’t be punished for falling behind raised standards established by goods entering the market at a later time.
    What it does: Safety standards and laws fluctuate with shifts in the market. Thus, there are no objective mandates for consumer product safety. After last summer’s string of product recalls, the U.S. and Chinese product safety agencies met to discuss new measures, including banning the use of lead paint in toys exported to the United States. Still, there is little hope for progress unless Chinese local authorities stop haphazardly enforcing rules and regulations.
    My thoughts:
    Agree.
    9. Emergency Response Law
    What it says: Designed to ban the spread of false information during disasters, the law prohibits “units and individuals” from “fabricating or spreading false information regarding emergencies and government efforts to cope with emergencies.” It also mandates local governments and authorities to “provide coordinated, accurate and timely information on the emergency and its development.”
    What it does: Passed in the wake of Chinese stonewalling during the SARS outbreak in 2003, the law ostensibly aims to improve the spread of information. But critics contend it just as easily muzzles the press. China’s legislature did water down a measure that would have imposed strict fines on the media for “inaccurate reporting,” but the law still contains provisions revoking media licenses for violations. State media coverage of coal-mine and other industrial accidents has been limited, as the government worries such reporting would provoke social unrest.
    My thoughts:
    Agree.
    10. Measures for Managing Internet Information Systems, Issued by State Council Order No. 292
    What it says: Prohibits certain content from Web sites, online bulletin boards, and chat rooms, including content that could “harm the dignity and interests of the state” or “disturb social order.” It also holds Internet service providers (ISPs) responsible for the content of their sites.
    What it does: Vague provisions such as banning Web sites that “disturb social order” are a blank check for Internet censorship. China employs some 30,000 Internet police to keep tabs on its more than 250 million Web users, and holding ISPs responsible for content often leads to widespread self-censorship and the recording of subscribers’ online and telephone activity.
    My thoughts:
    Agree.

  • Zhongzhi Gao

    Yes, I generally agree that Property Law should not be on the list. At least several laws much worse than the Property Law are not on the list. For example, the Chinese Constitution is bad because it mandates that China must be ruled by one party government. Especially, the Security Administration Law I mentioned is absolutely nasty since it grants the police the power to de facto convict a person without trial in court.
    Land is always a sensitive issue in China. In the long history of China, almost all Dynasties finally fell apart in some degree due to land concentration. Farmers became homeless and the social unrest ensued until a Dynasty fell down.
    The Chinese government is aware of its history and huge population. China has yet to establish the system of welfare, including medical system. Most of farmers have not any kind of insurances and land is almost their sole safeguard. Losing land means losing everything.
    China adopted dual system of land tenure. Bascially, land is either owned by state or rural economic organizations while individuals have the rights to use land.
    The Property Law mandates that the collective land can be taken or requistioned.
    As for state land, the government always owns it, so they can get it back at its sole disrection at any time. The buildings on state land can be taken by the government.
    What will happen if land users disagree with land taking? They can in fact do nothing, exactly.
    In state land, the government is in charge of resolving disputes if developers are not able to reach an agreement for compensation and relocation. If any party is dissastified with the government’ decision, they can file a suit with court.
    First, can you believe that the government is unbiased or impartial since they approve the project in the first place. So in my whole life, I simply know that only homeowners are dissatisfied with the government’s decision, not developers. (You know what? In practice, the government always first consult with courts before they render any decision. This means homeowners are destined to lose case.)
    Second, how can the government force parties to reach agreement? Ironically, Chinese government and Chinese contract law state that any contracts should be concluded at the will of parties.
    Third, as you see, homeowners can only challenge the sum of compensation. In this regard, it is absolutely much worse than in America. At least in American, parties can argue their constitutional rights are violated and they can argue in court to terminate the project of renewal. But in China, this is never seen as issues regarding constitutional rights.
    In collective land, farmers are more pathetic than urban residents.
    Because land is owned by so-called collective economic organizations (“CEO”), most of monies goes to the CEO not farmers. Under the Chinese Land Adminsitration Law, the compensation for farmers are pathetically low since it is calculated based on standing crops, annual output, etc. while location is generally is not a factor.
    Who represents CEO? What is CEO? It is relics of planned economy and not a legal term. So in many events, the monies for CEO in fact go into the personal pockets of few village leaders though they are supposed to be used for the benefit of village and farmers pursuant to Chinese law.
    For collective land, the only thing farmers can challenge is also the sum of compensation, not land taking itself.
    So in reality,lots of social unrest result from land taking or property taking.

  • http://twofish.wordpress.com/ Twofish

    Also as far as good Chinese laws. Articles 129-130 of the Company Law which state that shares in companies that are issued at the same time must be of the same type. What that means is that the majority owner of a company (i.e. usually the government) can’t issue special shares to itself at the expense of minority holders.

  • Thompsoncole66

    YOU ALL ARE CRAZY!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!