Socialist Law - Chinese Socialist Law

Chinese Socialist Law

Among the remaining communist governments, some (most notably the People's Republic of China) have added extensive modifications to their legal systems. In general, this is a result of their market-oriented economic changes. However, some communist influence can still be seen. For example, in Chinese real estate law there is no unified concept of real property; the state owns all land but often not the structures that sit on that land. A rather complex ad hoc system of use rights to land property has developed, and these use rights are the things being officially traded (rather than the property itself). In some cases (for example in the case of urban residential property), the system results in something that resembles real property transactions in other legal systems.

In other cases, the Chinese system results in something quite different. For example, it is a common misconception that reforms under Deng Xiaoping resulted in the privatization of agricultural land and a creation of a land tenure system similar to those found in Western countries. In actuality, the village committee owns the land and contracts the right to use this land to individual farmers who may use the land to make money from agriculture. Hence the rights that are normally unified in Western economies are split up between the individual farmer and the village committee.

This has a number of consequences. One of them is that, because the farmer does not have an absolute right to transfer the land, he cannot borrow against his use rights. On the other hand, there is some insurance against risk in the system, in that the farmer can return his land to the village committee if he wants to stop farming and start some other sort of business. Then, if this business does not work, he can get a new contract with the village committee and return to farming. The fact that the land is redistributable by the village committee also ensures that no one is left landless; this creates a form of social welfare.

There have been a number of proposals to reform this system and they have tended to be in the direction of fully privatizing rural land for the alleged purpose of increasing efficiency. These proposals have usually not received any significant support, largely because of the popularity of the current system among the farmers themselves. There is little risk that the village committee will attempt to impose a bad contract on the farmers, since this would reduce the amount of money the village committee receives. At the same time, the farmer has some flexibility to decide to leave farming for other ventures and to return at a later time.