From Public to Private: The Newly Enacted Chinese Property Law and the Protection of Property Rights in China

Protection of Property Rights has become a pressing issue in China since the country strived to move from a planned economy to a market economy in late 1970's. The passage of the Property Law of China on March 16, 2007 marked an historic change in the country from public to private in respect to property rights. Effective on October 1, 2007, the Property Law for the first time in Chinese history grants an equal protection to both public and private properties, breaking up the orthodox ideology in favor of public ownership against private ownership and individual liberty. With a notable civil law tradition, the Property Law is intended to set forth comprehensive rules regulating creation, alteration, alienation as well as termination of property rights, and protecting private property rights in China, a country where the public or state ownership is still playing a leading role in the nation's economy. Many rules in the Property Law, which are different from those in other countries, particularly the common law countries, are unique not only in their contents but also in their application. The land use rights typically reflect a Chinese reality in that the ownership of land is separated from the possession and use of it. Adoption of the Property Law in China is a substantial step toward protection of private property rights in the nation. The greatest challenge facing the country, however, is how to enforce the law so that the private property rights would be effectively protected, especially in the situation where the public ownership is involved. The Nail House syndrome that has spread all over the country indeed raises a serious issue of compensation in the case of taking. Whether or not the compensation must be just and reasonable remains to be answered.