Enforcing Takings Clauses in China

• Author: Cheng Jie
• Pages: 192-219

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192 TSINGHUA CHINA LAW REVIEW [Vol. 7:191

ENFORCING TAKINGS CLAUSES IN CHINA

CHENG Jie

I. INTRODUCTION

Property rights are considered fundamental in constitutional

jurisprudence and essential for economic development. However,

China’s economic growth over the past 30 years has posed a special

paradox to many theorists: for some, it is a mysterious phenomenon

that China could continue rapid growth for a few decades without

proper contract law until 1999 and without constitutional private

property rights until after 2004. For others, the lack of property rights

explains the social unrests arising from land-taking and the potential

risk of non-sustainability of further development.

This does not mean that there is no property protection in China;

both the Constitution and other relevant laws provide for property

rights. However, it is the security of property rights that is questioned.

Not only do individuals find themselves vulnerable when government

agencies (the State) take their property, but also collective

organizations in rural areas fail to resist expropriation requests from

the State. According to the original text of Article 10 of the 1982

Constitution, “The state may in the public interest take over land for

its use in accordance with the law. No organization or individual may

expropriate, buy, sell or lease land, or unlawfully transfer land in other

ways.” It was not until 2004 when the 20th and 22nd Amendment of the

Constitution added compensation to the original clause.

Among other things, real property, especially land property rights

are especially fragile because individuals are not considered

landowners under the Chinese legal system. According to the 1982

Constitution, in urban areas, all land belongs to the state. In the rural

areas, land belongs to the state or collective organizations. In both

urban and rural areas, individuals only have a land-use right. What is

more, collective organizations in rural areas cannot transfer ownership

freely. They can only passively transfer their land ownership to the

state when the latter expropriates the land. After the state expropriates

the land from rural areas, individuals or private sectors can acquire

land-use rights from the government or from the market. As a result,

there is no spontaneous market for land price and the government will

only compensate the collective landowners with the minimal

government-set price. In other words, the government has a monopoly

over prices for all land owned by the collective, which is highly

distorted and below the actual market price.

Observers and experts have noticed the problems associated with

land property rights in China. Many have proposed reforms to address

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the distortion. Among them, there are three main approaches: the most

radical one is to privatize land ownership both in urban areas and in

rural areas.1 Many economists believe that the property ownership is

the ultimate reason for the distortion. However, due to the perceived

conflict between privatization and socialism, this approach has not

been officially endorsed.

The second approach is legalistic, which advocates to limit

expropriation by a narrow interpretation of “public interests” in the

law. 2 This approach was endorsed by the 2004 Constitution

Amendment; and the 2011 Regulations on Expropriation and

Compensation of Real Property on State-owned Land in Urban Areas

provides a list of projects that are considered to be within public

interests.

The third approach is a constitutional due process of law approach.

This approach requires the government to go through important

bargaining and assessment procedures and to make the results public

with due care.3 Up till now this approach has not been ratified by the

Constitution. However, relevant ministerial procedures have been

introduced to reflect the procedural requirements that emphasize

fairness, neutrality and openness.

This article aims to examine the effectiveness of the third approach

through a systematic analysis of over 200 court cases that involve

Articles 46-49 of the Land Management Law, as amended in 2004.

These articles were chosen for several reasons. Firstly, these articles

are the de fecto due process of law provisions that restrict government

land-taking actions substantively and procedurally. Secondly, these

provisions are enforceable in China. Even if the Constitution is

amended in the future, it is worthwhile to examine the enforcement of

1 Huang Shaoan (黄少安), Sun Shengmin (孙圣民) & Go ng Mingbo (宫明波), Zhongguo Tudi

Chanquan Zhidu Dui Nongye Jingji Zengzhang de Yingxiang—Dui 1949-1978 Nian Zhongguo Dalu

Nongye Shengchan Xiaolü de Shizheng Fenxi (中国土地产权制度对农业经济增长的影响——对

1949—1978年中国大陆农业生产效率的实证分析) [The Impact of Land Ownership Structure on

Agricultural Economic Growth: An Empirical Analysis on Agricultural Production Efficiency on the

Chinese Mainland (1949-1978)], 3 ZHONGGUO SHEHUI KEXUE (中国社会科学) [SOC. SCI. CHINA] 38,

38-47 (2005); Matthew S. Erie, China’s (Post) Socialist Property Rights Regime: Assessing The Impact

of the Property Law on Illegal Land Takings, 37 H.K. L.J. 919, 919-49 (2007) (outlining the anti-

commons (privatization) model and fuzzy approach (maintenance of a hierarchical order of rights among

various players of rural land market) in modeling property law reform in China); see also Zhu Keliang &

Roy Prosterman, Securing Land Rights for Chinese Farmers: A Leap Forward for Stability and Growth,

3 DEV. POL’Y ANALYSIS (Oct.15, 2007), http://object.cato.org/sites/cato.org/files/pubs/pdf/

DPA3.pdf.

2 Hu Jinguang (胡锦光) & Wang Kai (王锴), Lun Woguo Xianfa Zhong “Gonggong Liyi” de Jieding

(论我国宪法中“公共利益"的界定) [Defining Public Interest in the Chinese Constitution], l ZONGGUO

FAXUE (中国法学) [CHINA L. SCI.] 18, 18-27, (2005).

3 Zhang Qianfan (张千帆), “Gongzheng Buchang” yu Zhengshouquan de Xianfa Xianzhi (“公正

补偿”与征收权的宪法限制) [Just Compensation and Constitutional Control of Takings Power], 2

ZHONGUO FAXUE YANJIU (中国法学研究) [CHINESE J.L.] 25, 25-37 (2005).