The long-awaited Property Law was finally enacted by China's National People's Congress on March 16, after seven lengthy reviews. The law has received extensive media coverage in China and overseas. In fact, some leading foreign media have touted it as a catalyst to strengthen the rights of a growing middle class in China. Meanwhile, many commentators have argued that the law has failed to tackle the fundamental hurdle faced by farmers' ability to increase their incomes - namely, the outright privatisation of land.
Is the law another classical case of 'the glass is half full or half empty', which is often the case in mainland China? In my view, the glass is definitely half full, but China has a long way to go.
The law is aimed at protecting private property. In recent years, real estate has been the most sought-after investment by city dwellers, whose wealth is growing but who face limited choices of investment. In major Chinese cities, home ownership has reached 70 per cent, a level comparable to, or even higher than, that in most developed countries. Even so, the lawmaking process, just like most political changes, quite often lags behind the underlying economic changes. That said, the Property Law will affect China profoundly in many ways.
First, it should not be viewed in isolation. Since entrepreneurs were accepted into the Communist Party, Beijing has been making conscientious efforts to change the nature of the party by broadening its representation. Admitting entrepreneurs has laid the groundwork for legitimising their wealth.
Second, with such a high home ownership ratio in urban China, there is a compelling need to protect the properties that might have absorbed the life's savings of many ordinary Chinese. Third, the law also reflects a clash of ideologies: as China becomes richer, citizens long for legal protection; but resentment has grown in society towards various schemes that resulted in state assets being sold cheaply.
Many citizens have mixed feeling about property: most attach a high premium to home ownership because it represents both wealth and security. As a result, many are angry with the fact that the majority of China's richest people are involved in the property sector - where the collusion between corrupt government officials and unscrupulous businessmen is relatively blatant.
From the perspective of many ordinary people, the Property Law has effectively legitimised the looting of state assets by tycoons. That is why the affordability of housing is such a politically sensitive issue, and why the timing of the law's enactment reveals the dominant view at the very top towards reform.