A Property Law (Draft) that violates the constitution and basic principles of socialism

By Gong Xiantian
[Subtitled “An open letter prompted by the annulment of section 12 of the constitution and section 73 of the General Rules of the Civil Law of 1986”, this paper by Beijing University Professor Gong Xiantian was dated August 12, 2005. The translation for Links is by Eva Cheng.]

As a member of the Communist Party of China (CPC), a citizen of the People’s Republic of China, a professor who has engaged in years of research on the teaching on law, someone with party spirit, conscience, knowledge and experience, I am of the view that the Property Law (Draft) of the People’s Republic of China (abbreviated as Draft from here on) violates the fundamental principles of socialism and will roll the “wheel of history” backwards. In the absence of amendments of a principled nature, the National People’s Congress has no right to legislate the Draft because it violates the Constitution (see appendix)!

The basic spirit and fundamental principles of the Draft go against the fundamental stance and principles of Marxism, the cpc’s orientation and principles of socialist legislation, the basic spirit and demand for a scientific developmental perspective and for the construction of a socialist society of harmony as promoted by the party central leadership under General Secretary Comrade Hu Jintao.

1. The Draft’s annulment of core clauses of the constitution and the General Rules of Civil Law is unconstitutional.

In my view, some people are seeking to achieve through the Property Law what they failed to achieve through the 2004 amendment of the constitution. A fundamental difference between a socialist constitution and a capitalist constitution lies in their treatment of the issue of the private property system. V.I. Lenin said: “The spirit and basic content of all constitutions previously, including those in the most democratic and republican category, all boil down to the private ownership system”.1 For the victorious proletariat, the restriction and abolition of the private property system have been the key expressions of its rule as a class. As a result, recognition of the socialist public ownership system forms a most distinguishing feature of a socialist constitution, as opposed to a capitalist one. Therefore, “the sanctity of public property under socialism” becomes one of the most defining characteristics of a socialist constitution.

To the labouring masses and all Chinese citizens, the public ownership system and state property provide the most important and fundamental protection to—and are also the material expression of—the property right of each of them. In the absence of the property right of the state and the collective, the property right of individual citizens has no chance of being realised. However, in our country, there are people who, on the one hand, have been scheming ceaselessly to remove the principle of “the sanctity of public property under socialism” from our constitution and, on the other hand, have been seeking to replace it with the spirit and principle of “the sanctity of private property”. It’s worth being highly alert to this trend! Even under the constitution and the General Rules of Civil Law, which spell out clearly the principle of “the sanctity of public property under socialism”, public property is still violated and damaged to such an extent. It’s hard to imagine what would happen if this stipulation were gone! The basic spirit of the Draft is not consistent with this stipulation. It violates the principle of continuity in legislation and is also a violation of the constitution.

2. In form, the Draft safeguards equally the property rights of each citizen of the country, but its essence and main agenda are to protect the property rights of a small minority.

The Draft seeks essentially to protect private property, camouflaging it with the protection of public property as a decorative supplement; it seeks essentially to protect individuals’ property rights, camouflaging them with the protection of state and collective property rights; it seeks essentially to protect the property rights of individuals that in fact already exist, camouflaging them with stipulations to protect state property rights—which are in reality deficient, even inoperable and unrealisable; it seeks to protect the property rights of a tiny minority—an object of enormous size—for which the prerequisites and basis for realisation aren’t an issue, camouflaging them with the protection of the property rights of the predominant bulk of the people—an object of minute size—that seek to address minimum, urgent and indispensable daily needs.

According to the basic theorem of system theory, even if ninety-eight per cent of the clauses of this law are good, reasonable and scientific when scrutinised individually, if two per cent of the clauses are flawed, it is sufficient to lead to the entire law being flawed. This depends on the spirit and principles on which these clauses were drawn up, depends on what effects these two per cent have. Otherwise, what is the basis of the saying that “Four taels can be a counterweight to a thousand catties”?2

The most critical and core clauses of the Draft are wrong! Not only have they not protected public property rights (communal property under socialism and state property), which are the legislative expression of the socialist public ownership system that forms the material prerequisites and economic foundation of citizens’ equal rights in our country. Even worse, under the impact of the prevailing privatisation current of thought in our country, in reality, the economic sectors based on the public property system are no longer the main game, and the leading position of the state economy has been seriously impaired. Under these circumstances, not only does the Draft do nothing to change this scenario and thereby provide measures and legislative directions to consolidate and develop the economic basis of socialism in our country. It also endorses the existing state of play— i.e., endorses the vested interests of a tiny minority as well as their rights to appropriate the wealth of society through illegal means. The basic spirit and fundamental inclination of the Draft will surely further boost the process of privatisation, be socially polarising and lead to a greater wealth gap and a serious division of and sharp contradictions in society.

3. The Draft turns its back on socialist principles and steers the wheel of history backwards.

Equality under socialism refers to:

Firstly, the Communist Party—armed with Marxism—leads the people in overturning the reactionary regime, establishing the rule of the proletariat and, through state power, delivers equal political rights to the people. This is the prerequisite for the equal rights of citizens under socialism. Therefore, we must insist on the democratic dictatorship of the people, the leadership of the Communist Party and Marxism, Leninism and Mao Zedong Thought.

Secondly, through its state power the proletariat abolishes the private ownership of the means of production, and establishes a socialist public ownership system that defends the means of production, providing each citizen an equal share of the means of production, thereby eliminating the possibility of exploitation, providing the material safeguards to make possible equal citizens’ rights, providing the foundation and constituting the content for the equal rights of socialist citizens. Therefore, we must uphold the socialist system (such that we can realise the five characteristics of socialism as outlined by Deng Xiaoping).

Thirdly, while establishing political and economic equality, the Communist Party needs to use state power to legislate such that the political and economic rights of the citizens can be instituted legally as well as in form.

The equality enshrined in socialist laws is equality built on equal remuneration for equal labour, which comes about after the establishment of the state power based on the dictatorship of the proletariat, rooted in the abolition of the privilege of capital or money, built on the foundation of public ownership of the means of production, on the premise of the equal ownership of the means of production by all citizens. Put simply, this is the equality of labour. Labour is an activity that reflects and actualises the essence of human beings. To the absolute majority of people, using this yardstick to ascertain and determine the distribution of the means of livelihood is consistent with the interest of the absolute majority and consistent with equality and justice under socialism. The party and state power of the proletariat defend the socialist public property system to safeguard the material basis for citizens’ equal rights and for the Communist Party’s own rule. If this basis is gone, what place remains for the Communist Party?

Since the reform and opening policy3 started—especially under the influence in recent years of neo-liberal economics of the West and the “Washington consensus”—a small minority in China, who seek to promote capitalism and to bring down the state enterprises on which the economy of New China has been based and which have scored an impressive record, smeared the state enterprises as being “inefficient” and “feeding lazy buggers”. In name, they are seeking to steer the state enterprises to health, but in reality, they are steering them to death, selling them at deflated prices. (Remember what Premier Zhu Rongji once said: “In what way is it a sale? It’s a giveaway, a half-sale, half-giveaway.”) These moves have resulted in a massive leakage of the assets of state enterprises, forcing redundancy on many workers, resulting in the serious economic and social problems that prevail today, bringing great difficulties to the work of the party central leadership as well as the government, locking all players on the chessboard into a state where taking initiatives is difficult.

In recent years, people have taken counter-socialist measures and paths under fancy titles such as “a conversion to shareholding structure”, “cash payment in lieu of a worker’s entitlements based on years of employment”, “state enterprises retreat to make space for ‘people’-owned enterprises”, “management buyout” and “strategic restructuring”. No one can say with certainty how much or little is left of the state enterprises! At the moment, no one has anything responsible to say about state enterprises and state property. According to the scientific estimates of veteran cadres who have spent their whole working lives at the State Statistics Bureau and other specialists, the output of the state sector isn’t even seventeen per cent of the country’s industrial output. Yet, highly regrettably, individual leading officials of the bureau continue to lie to the party central leadership as well as the people, failing to provide a credible figure. The statistics released so far are self-contradictory, full of mistakes and omissions, with errors of such a serious nature that they absolutely shouldn’t have occurred.

Although our party decreed and billed our task as two “unwaverings”,4 many of our cadres are unwavering only with respect to the so-called people-owned enterprises (which are mostly privately owned). Even years ago, there were provincial officials who appealed for a big push to develop so-called people-owned enterprises “with their hearts at ease [implying they wouldn’t be charged later for political incorrectness, as happened during the Cultural Revolution], with minimum prescriptions and with boldness”. Later on, the “easy going” policy was added [as a fourth element], thus constituting the “four let go” policy5 on the people-owned economy. However, the development of publicly owned enterprises has received no special attention, as it should have, nor have useful measures been taken on the issue. Things happened this way because the public sector is not where the interest of these cadres lies. With meticulous calculation, they try to put state enterprises in an extremely difficult state, leading to the tragic situation where there was the need for a struggle for a [fair and equal] “national treatment” [on par with private enterprises] for state enterprises! This is why some members of the masses said the “common property party” [the literal meaning in Chinese of “communist party”] has become the “private property party”!

To talk about equal protection in such a grave scenario is like advocating protection for a beggar’s multipurpose stick and bowl equally with the machinery and vehicles of the minority! It’s like giving protection to the homes of average citizens, even their dangerous derelict homes, equally with the high-class villas of those who have struck a windfall fortune! According to the current conception of the Draft, equality will be delivered only to capital but not for the protection of labour. What is the difference then with capitalism? In the absence of the objects of such rights, or when such objects are few and far between, what possibility remains for equality of the subjects? What difference is there then with equality under capitalism? What’s the point of protecting something that I don’t have? I don’t need protection for things not in my possession! Even less do I need protection for things that I can’t possibly have even in the future! With respect to the ownership of the means of production, one is super-rich, with net worth of millions, tens of millions or even hundreds of millions of dollars; the other is a bum possessing nothing of value, providing no basis at all to talk about any equality between the subjects! The prerequisites and targets for the adjustments that the Draft is aiming for simply do not exist!

Recently, mining disasters have kept popping up, and they mainly happened in privately owned mines (such as the one in Guangdong province on August 8). Collusion between officials and the businesspeople also led to incidents such as the one in Dingzhou,6 and the ones in Beijing and Huailai resulting in 10,000 mu of “weeping” corn (eighty per cent of which couldn’t be harvested).7 Were these merely rare incidents? Were they merely accidental? In the year before last, when Premier Wen [Jiaobao] kind-heartedly sought to claim their back wages on behalf of rural-to-urban migrants, who was he trying to mock? Hasn’t China Central Television reported the example whereby a state enterprise in Zibo city in Shandong province was engaging in acts that involved “the left hand causing the downfall of the right hand, and what’s publicly owned turning into private property”? Aren’t these disasters caused by the privatisation of the means of production?

If the present Draft is passed, the fundamental will and long-term interest of the majority of China’s citizens will be violated, further damaging the material basis of the cpc’s rule, making worse the relationship between the party and the masses as well as that between the government and the masses, leading to greater hidden social concerns and disastrous consequences. This will pose the greatest and most fundamental threat to [the goal of] a harmonious socialist society, and is a serious incident that pains the sympathetic forces and pleases their hostile counterparts! Very early on, Deng Xiaoping said: “China needs to solve the poverty and development problem of 1 billion people. If we go down the path of capitalism, a minority may get rich but a big number of people will be mired in poverty for a long time. The issue of China needing a revolution will arise.” One must understand: a revolution will arise when the upper crust of society can’t continue to rule and manage as it did before, while the bottom layers of society aren’t willing to continue living the way they did. It’s not that they “can’t” continue living that way, but that they aren’t willing to! Isn’t privatisation the most fundamental cause of instability in Chinese society today?

In my view, the Draft:

(1) Turns its back on the socialist tradition and conception under the Soviet Civil Code, adapting instead to the principles and conceptions of a capitalist civil code. Some people have “slavishly plagiarised the bourgeoisie’s civil code” and “copied the bourgeoisie’s archaic civil code conceptions”.

(2) Turns its back on the fine tradition of our people’s democratic legal system, which was practised in the [pre-1949] liberated zones and since New China was founded, and adapts to the archaic legal tradition of the bourgeoisie. It is not fundamentally different from the Kuomintang’s “Civil Guidebook”,8 nor is it operating on a different principle.

(3) Turns its back on the socialist principles in the 1986 General Rules of Civil Law and adapts to the fallacy of capitalist globalisation and neo-liberal economics.

(4) Turns its back on the socialist principles and tradition of Marxism and adapts to the principles and tradition of the bourgeoisie.

In all, this is a Property Law that turns its back on socialist principles and steers the wheel of history backwards.

4. Clarity is required about a few questions.

I think it’s important to distinguish between:

(1) The relationship between the concrete clauses, the concrete principles and the entire legislation of the Draft. The absolute majority of the clauses (their essence) and the concrete principles of the Draft are correct and good. But once they form part of the whole legislation (system), there’s a qualitative change;

(2) The scholars and experts who took part in the drafting process, the leading officials who are involved in drafting laws and the state institutions that pass the laws. A difference must be drawn between the experts (jurists) and politicians; the work of the actual law drafters should be given recognition, and their labour respected, but their professional limitations exist. It’s different in the case of politicians, leading officials and power institutions, as they should have a political—i.e., a bird’s eye—perspective and a concept of the totality.

(3) The fundamental principle and spirit of the entire law, which I oppose, and ninety-eight per cent of its clauses, because based on the legal discipline as well as formally, those clauses are correct and scientifically based.

5. Queries and an appeal.

My queries are:

(1) Why on earth was the clause on the “sanctity of state (public under socialism) property” removed? Legislating according to the constitution is one of the most fundamental legislative principles, so why wasn’t this principle observed?

(2) Why not first establish the overall principles of the civil code—spell out the common and fundamental principles underpinning various specific civil laws—and only then move on to legislate one by one the so-called Property Law or Creditors’ Law and such like?

(3)Why wasn’t the state property law researched and legislated despite having been on the legislative schedule years ago? Why wasn’t the law governing leading cadres’ declarations of their personal assets legislated despite years of appeals?

I urgently appeal:

(1) For the social stability of our country and strategic planning towards our goal of building a harmonious socialist society, please prioritise discussion of questions such as the fundamental principles of the constitution, the direction that our socialism should take and whether or not we would continue on the socialist path, as well as the relationship between public (i.e. state and collective) property rights and the property rights of individual citizens. Otherwise, kindly delay the processing of the Property Law. Don’t let the discussion drift on to side issues and details, while forgetting the big questions regarding the fundamental principles that affect the absolute majority of the people. Side issues and details need to be discussed and the petty immediate and personal interests of citizens deserve attention, but there’s no way to avoid a discussion of the fundamental, long-term and principled interests of all citizens of this nation.

(2) Stop immediately the sale or transfer of state property. Under no circumstances should state property be sold or released at will to the market! No state institution has the right to sell the property of a socialist state as it pleases! This is common property, jointly held by and belonging to each citizen of this country! Even collective property must be sold only with the consent of all members of the collective concerned!

(3) Speed up the passage of the state property law and the law governing leading cadres’ declaration of their personal assets, both of which have been on the nation’s legislative schedule for years. First on the list should be a special law governing the recovery of missing state property. This is to realise the principle of “deploy power for the people, have affection towards the people, and work for the interests of the people”!

We have to cultivate from scratch the legal civilisation of socialism, and not follow in the footsteps of the legal civilisation of capitalism! In the twenty-first century, it is not possible for us to create as our ancestors did with the Tang Law—a legal code encapsulating the legal civilisation of feudal society—nor is it possible to create something like the Napoleonic Code—a legal code encapsulating the legal civilisation of capitalism—as the French bourgeoisie did. To move along the grand path of legal civilisation opened up by socialist countries so far is our only way forward! We should learn from and assimilate the achievements from all past civilisations, but we absolutely mustn’t blindly imitate and slavishly copy the civil code of the bourgeoisie. We must create a socialist legal civilisation that carries our national characteristics! Otherwise, we can only draw up a civil code that steers the wheel of history backwards, not one that we can ever be proud of, but, rather, one that will bring shame to China’s legal civilisation! Whenever future generations talk about this law, its passage and those mainly responsible for its promulgation, I dare predict that they won’t pay the scrupulous salute and respect that I do to those responsible for the drafting and promulgation of the Draft!

(Note: due to health reasons, I shall decline any requests for discussion or information from any individual.)


In my initial reading of the Draft, I discover:

(1) Section 73 is the main section of the General Rules of Civil Law of 1986 which the Draft changes: “State property belongs to all the people of the nation. State property is sacred and inviolable. Any organised or individual attempts to appropriate, forcibly seize, privately divide up, block and withhold or damage them is prohibited.”9 The Draft, incredibly, has freed itself of the clause that “state property is sacred and inviolable”. However, section 12 of the constitution stipulates, “Socialist public property is sacred and inviolable”.10

(2) I believe the Draft has the following problematic and wrong clauses:11

(a) Section 7 says, “Registered institutions mustn’t engage in the following activities: 1. demanding an assessment of immovable assets”. How should one handle the cases in which the property owners haven’t reported truthfully or have reported fraudulently? How then can we establish corruption and bribery charges under the criminal code in cases that involve substantial wealth of unknown origin?

(b) Section 25 says, “The registration fee for immovable assets must not be proportional to their surface areas, volumes or prices …”. So, should the registration fees for a dangerous derelict building be the same as for a villa? Should the registration fee of a tiny plot of land allocated [to a household for cultivation] under the rural responsibility system be the same as that for a thousand mu of vegetable fields? It is so clear that this is an attempt to protect the interests of the rich!

(c) Section 55 says, “The ownership of public facilities such as roads, electricity, communications and natural gas should, according to law, belong to the state …” This is in effect a loud appeal for further privatisation! Everything can be privatised from now on! This is because only those items decreed in the law belong to the state. Using logical elimination, the law can decree any object of property rights as not belonging to the state! In defending the interests of the nation, this section doesn’t even match up to [the practice under] capitalism!

(d) Section 56 says, “State institutions own, have the right of deployment and have the right to deal with [dispose of] the immovable and movable assets under their direct control …”. Property owned by the entire citizenry—i.e. state property—is property communally held. So unless state institutions are authorised by extraordinary legislation, they have no authority to deal with state assets!

(e) Section 58 says, “In enterprises established with state investment, where the central or local people’s governments are acting in accordance with law or executive decrees on behalf of the state investing entity, they are entitled to all the rights of owners …”. Unless specific legal authority or concrete (extraordinary) authorisation is granted, the government has no right to enjoy the property rights of the state! The owner is the entire citizenry!

(f) Section 72 says, “In the event of serious irresponsible acts that lead to the bankruptcy of or inflict major losses on state enterprises or collective enterprises, key managers who are directly responsible for the enterprises should honour their civil responsibility on this in accordance with the law as well as their administrative responsibility. In cases where the criminal law is violated, their criminal responsibility should also be met …”. Does this mean that responsibility does not need to be honoured in the case of losses inflicted by decisions of the State-Owned Assets Supervision and Administrative Commission (sasac) and local people’s governments? Originally, there was no such thing as “bankruptcy” for publicly owned enterprises under socialism! Shouldn’t “the sale of state property” by sasac officials be acts that deserve severe punishment?!


1. Translated from a Chinese edition of Lenin’s Collected Works, Vol.4, Renmin Chubanshe (People’s Publishing House), 1972, p. 168.

2. Tael and catty were once standard units of weight in China. One catty, roughly equivalent to 605 grams, contains 16 taels.

3. The “reform and opening up” policy was adopted by the cpc leadership in late 1978. It started with de-collectivisation of farming and liberalisation on the entry of foreign capital, escalating in the 1990s to more outright measures to reintroduce capitalist logic into the Chinese economy.

4. The so-called principle of “two unwaverings” was put forward by the cpc during its 16th Congress in 2002, stipulating that it “must unwaveringly consolidate and develop the public sector of the economy” and “must unwaveringly encourage, support and guide public economic development”.

5. The Chinese expressions of the four elements of this policy all share the common character that means “let go”.

6. In June 2005, about 250 residents of a village near Dingzhou city in Hebei province were physically assaulted after they refused to sell the use rights of land that the government previously assigned to them for their cultivation. They found the proposed compensation terms grossly undervalued, a common problem in China in recent years, resulting in numerous land disputes between rural citizens and local governments. Six villagers were killed and about 50 injured during the incident. Two local senior officials were later charged over the assault.

7. For two days in July 2005, more than 6.6 million square metres of corn fields were devastated by being sprayed with pesticide after the farmers of those fields turned down an offer from a local corporation, acting on behalf of the local government, to acquire land use rights. The fields are located at the border between Beijing and Huailai county, which is near Zhangjiakou city in Hebei province.

8. The Civil Guide Book was a comprehensive legal code used by the Kuomintang, a bourgeois party, which ruled China (in fact sharing power with many warlords) from the 1920s till 1949.

9. Links’ translation.

10. According to the ICL translation of China’s constitution. See http://www.oefre.unibe.ch/law/icl/ch00000_.html.

11. English translations of the Property Law (Draft) are by Links.