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CHINA: Party Leaders Endorse Property Rights

In Break From Founding Ideals, Party Also Decides to Allow Large Land Holdings

by John PomfretWashington Post
October 15th, 2003

China's top Communist Party leaders ended a four-day meeting Tuesday with promises to protect private property and allow farmers to amass large land holdings, key steps toward creating a more capitalist economy, state-run media said.

The decisions, made at a meeting of the Communist Party's Central Committee, marked another radical break with the country's founding ideals and a pragmatic recognition that economic reforms have remade society. Communist China was established in 1949 on the idea that private property should not exist and that farmers should work on communes where all land was held in common. Now private firms produce more than half the economy's total output, and farmers till their own plots.

The plenum, presided over by President Hu Jintao, underscored a further shift away from belief in the primary importance of state-owned industries to realization that the country's hopes lie in its vibrant private sector. State television said delegates agreed to continue supporting state-owned firms, while encouraging private companies to enter sectors previously closed to them such as infrastructure and public utilities. "Non-state firms will enjoy the same treatment as other enterprises in fundraising, investment, land use, tax and foreign trade," state-run television said.

Allowing farmers to transfer their rights to land, thus letting some amass large holdings, has been tried as an experiment in several provinces. Two government researchers said the move by the Central Committee could remake the face of agriculture, which currently involves millions of small holders.

An estimated 700 million of China's 1.3 billion people live off the land. China is worried about competition in the World Trade Organization from foreign foodstuffs, and the emergence of big farms would increase agricultural efficiency, an agronomist said, on condition of anonymity. But it could also rapidly increase unemployment in the countryside, where farmers' incomes have been flat for about the past five years.

Both changes -- the protection of private property and the freedom to transfer land rights -- are controversial. Some researchers have opposed the protection of private property because they argue that much of the wealth amassed over the last decade during an unprecedented economic boom is rooted in corruption and theft of state assets. "Many people made their money by illegal means; many people never paid taxes. Should we be protecting them?" asked Dia Jianzhong, a leading social scientist.

Other researchers have expressed worries about allowing farmers to transfer land because it could mean a return of big landlords, who were eliminated during the 1949 revolution. It also could open the way for greater abuses of poor farmers by local governments, which are now stealing farmers' land on an unprecedented basis, according to official central government reports.

State media have trumpeted the importance of the meeting, the Third Plenum of the 16th Party Congress, just as China was gearing up for its first manned space launch in an apparent propaganda campaign for China's communist system.

The meeting came 11 months after Hu assumed the leadership of the Communist Party in China's most orderly transition ever. Hu has moved rapidly to secure power and has impressed many Chinese and Western observers with his pragmatic approach to policies. Under his stewardship, China for the first time participated in a meeting of the Group of Eight nations and is now cooperating with the United States on working to solve the nuclear crisis in North Korea.

Domestically, while China's security services have maintained a crackdown on dissent and religion, Hu's government has modified some social policies. For example, couples no longer need the permission of their employers to marry. China also annulled a law that gave police the power to arrest almost any traveler and accuse him or her of vagrancy.

"Hu's style is simple," said Zhen Xiaoying, the vice president of the Central School of Socialism. "He doesn't talk about changes, he goes ahead and makes them."

The New China News Agency reported that 188 members and 154 alternates of the Central Committee, which sets policy for the 60 million-member party, approved several revisions to the constitution as well as a package of measures to "perfect several issues in the socialist market economic system." Those measures and constitutional changes will be sent to the Standing Committee of China's legislature, which will turn them into law, the report said.

Although the official news agency did not spell out those changes, a longer report later on China Central Television said the plenum committed the party to protecting private property and private business, leading analysts to conclude that, as expected, the party would revise the constitution to bolster protection of private property.

The plenum also vowed to address growing economic gaps between village and city, and the coast and interior. Although the gross domestic product has tripled since 1980 and the economy is on track to grow by 8 percent this year, growth is increasingly inequitable. Eastern areas are enjoying boom times, while people in the west and central regions remain largely destitute.

The plenum also appeared to take steps toward writing a new theory into the constitution as a basis of Communist Party rule. That theory, called the Three Represents, is the brainchild of Hu's predecessor at the party helm, former president Jiang Zemin. It essentially says the party should now represent the interests of the economic and cultural elite as well as those of everyone else.

It is an acknowledgment of the contributions of the nouveau riche and fast-growing middle class to economic growth and a recognition that the party cannot stay in power if it remains simply the party of the peasants and working class. State television said the plenum would write into the constitution "important theoretical principles decided upon at the 16th Party Congress," which, according to several Chinese sources, was code for this theory.

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