China: Property

Cameron Sawyer writes:Tim Ashby's information about private property in China is rather dated.  Private property is not only not illegal in China, since last year it is constitutionally protected -- in March, 2004, the Chinese constitution was amended to include these words:  "A citizen's lawful private property is inviolable."  A new Property Law is being mooted to modernize real property relations.  But significant private property rights -- including the right to form private companies -- have existed in China since 1988.  In 1988, Chinese got the right to acquire transferable -- marketable -- rights in real estate in those days not called ownership but the same as ownership for all practical purposes.  Since then, more than 80% of all public housing in China has been privatized, and a similar proportion of Chinese are homeowners.  Unlike in Russia, the mortgage system is highly developed.  Anyone has the right to buy land and build an office building, for example, if he has the money and can get planning permissions, and is free to lease out the space and earn profits.  No, Tim, private property is alive and flourishing in China.
 
 
 Tim Ashby said private property ownership is illegal in the PRC.  I asked: Then who owns all the new buildings going up, especially in Shanghai? Cameron Sawyer said Tim's information was dated. Tim responds: Private ownership of land is illegal in China.  Under article 10 of the 1982 Constitution, urban land belongs to the state, with rural land owned by the collectives.  Since the rural collectives are administratively subject to the leadership of the central and local governments, all land is de facto owned by the state.  The new class of oligarchs have found ways to circumvent this.  For example, the land on which a $50 million mock French chateau sits, built by a real estate developer (a Communist Party member and former senior official at Beijing's municipal construction bureau whose fortune was founded on bribes), is not technically owned by him.  The property – a former mechanized wheat farm tilled by 800 farmers – was acquired in a deal under which the developer bribed the District Council to convert it from farmland to a conservation zone.  The millionaire leased the land for an annual rent of $300 per acre, provided it mostly remained green space. The developer was then granted one easement for his chateau and a second for a community of 1,000 luxury homes covering 170 of the 1,000 acres.  High walls, steel gates and security guards keep ordinary Chinese from trespassing on the conservation zone.

RH: This does not seem to explain the cheek by jowl high roses in Shanghai.  I think Cameron's posting covers that.