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China is about to enact a law to safeguard property rights

BEIJING—China's legislature is about to enact a hotly contested law safeguarding the rights of property owners, a landmark in a nation that still says it hews to socialism but creates new millionaires by the month.

The property rights proposal, debated over five years, is the most disputed draft law in modern times. Sentiments are running so high that censors this year have blocked most opponents from airing their views in domestic media.

Some 3,000 members of the National People's Congress are expected to press the "yes" button on the proposal Friday morning (10:30 p.m. Thursday EDT).

Proponents of the draft law say it's a milestone, further enshrining property owners' rights since the 2004 enactment of a constitutional amendment that says citizens' property is "inviolable." In theory, the law should help citizens fight indiscriminate seizures of land as well as protect a growing class of urban homeowners.

Land grabs for industrial and real estate development have sparked violent unrest in China, often pitting poor farmers against officials who are in cahoots with business owners.

Debate about property rights, however, goes to the core of China's modern identity, drawing out opponents who think that the world's most populous nation is marching too quickly toward a free-market society marked by inequality.

"China's reforms have hit a critical point and are encountering strong opposition," said Hu Xingdou, an economist at the Beijing Institute of Technology.

The 40-page draft law, with 247 articles, delves into issues that affect numerous urban dwellers, such as the ownership of garages and parking lots, the functioning of homeowners' associations and the renewal of land leases. In China, the state remains the sole owner of all land, which is leased, often for 70-year periods.

Since many of China's 750 million or so rural residents live on land collectively owned under a 58-year-old communist system, unable to buy or sell, the proposal only leaves them further behind urban dwellers who are building equity in property, some experts said.

Opening debate on the draft law six days ago, Vice Chair Wang Zhaoguo said that property ownership was "increasing with each passing day" and that owners "urgently require effective protection of their own lawful property accumulated through hard work."

Last year, the delegates tabled the draft law amid fierce opposition. This year, some 3,275 people, including retired army generals and 30 or so retired officials with ranks above deputy minister, signed an open letter opposing elements of the law. The letter criticized the government for cases in which embezzling managers have seized control of state-owned factories.

The critics include active party members who are disgruntled by market reforms, which have lifted hundreds of millions of Chinese from poverty but also sparked often-chaotic development and undermined core concepts of socialism.

"I am not one of those extreme leftists who defend public ownership rigidly," said Yang Fan, an economist at China Politics and Law University who signed the letter.

But Yang said the draft law failed to hinder the state from recouping assets embezzled by officials if the assets were under the names of relatives.

"This is very dangerous because China doesn't have a property registration system as in the West," Yang said.

Hu, a proponent of the law, said he thought it would fortify China's private sector, which accounts for about half the output of the world's fourth-largest economy.

The state news agency, Xinhua, said the draft law had undergone at least 60 revisions, a sign of legislators' interest in property issues and their desire not to be seen as yes-men of the long-ruling Communist Party.

The government stifled public debate outside legislative confines, barring domestic news media from discussing the issue beyond authorized reports.

Soon, the official focus will be on another topic: how to create and collect property taxes.

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(McClatchy Newspapers special correspondent Fan Linjun contributed to this report from Beijing.)

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(c) 2007, McClatchy-Tribune Information Services.

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