China's Leaders Back Private Property.
Proposed Amendments Would Mark Break With Communist Roots
By Peter S. Goodman
Washington Post Foreign Service
Tuesday, December 23, 2003; Page A01
SHANGHAI, Dec. 22 -- China's Communist Party leaders on Monday proposed amendments to the nation's constitution that would enshrine a legal right to private property while broadening the focus of the party to represent private businesses.
Virtually assured of adoption in the party-controlled National People's Congress, the amendments constitute a significant advance in China's ongoing transition from communism to capitalism. They amount to recognition that the economic future of the world's most populous country rests with private enterprise -- a radical departure from the political roots of this land still known as the People's Republic of China.
Not since the Communist Party swept to power in 1949 in a revolution built on antipathy toward landowners and industrialists have Chinese been legally permitted to own property. Under the leadership of Chairman Mao, millions of people suffered persecution for being tainted with "bad" class backgrounds that linked them to land-owning pasts.
But in present-day China the profit motive has come to pervade nearly every area of life. The site in Shanghai where the Communist Party was founded is now a shopping and entertainment complex anchored by a Starbucks coffee shop. From the poor villages in which most Chinese still live to the cities now dominated by high-rises, the market determines the price of most goods and decisions about what to produce. Business is widely viewed as a favored, even noble, undertaking.
The amendments submitted on Monday to the Standing Committee of the Congress in Beijing, a sub-unit of the legislature, had been expected since the party's Central Committee wrapped up a plenum in October with pledges to protect private property. Party leaders have advanced property rights as part of a process of privatization that has been unfolding for years but has gained considerable momentum in recent months. More than 100,000 state-owned companies have been sold over the past decade, according to official statistics, and the government recently outlined plans to shift tens of thousands more into private hands.
The formal establishment of property rights serves to legitimize a reality that has existed for decades: Chinese people own all sorts of things, from their bicycles and farm implements to the cars, apartments and shares of stock being purchased at a frenzied pace by a growing urban nouveau riche.
The problem is that property can be taken by state or local authorities with little or no compensation. The exploding real estate business has been particularly rife with corruption, as government officials routinely avail themselves of the opportunity to get hold of choice land and use it for private business. When disputes arise, personal connections in government remain more important than the evolving body of law, often muddled by internal contradictions. The amendment is at once a bid to spur more commerce while limiting the opportunities for abuse.
Legal experts expect the amendment to lead to regulations governing all sorts of activities that go on already, albeit under ambiguous legal status, such as the trading of real estate, stocks and bonds.
"We will unswervingly encourage, support and guide the development of the nonpublic sector," Premier Wen Jiabao said last month in an interview with The Washington Post. He singled out protection of private property as something that would "give greater scope to the creativity and enterprising spirit of the Chinese population and will in the end help us achieve the goal of common prosperity."
The state-owned firms that once dominated China's economy have traditionally been sustained by credit from state banks, regardless of their balance sheets. Today, many are bankrupt, and banks are burdened by about $500 billion in bad loans, according to private economists. The government has cast privatization as the prescription for turning them around, creating management incentives to make them profitable.
But the process has been messy and painful, eliminating jobs for tens of millions of workers at bankrupt firms at a time when the government is slashing the social benefits that were part and parcel of communism. After years of free housing, health care and education, most Chinese must now pay for these services. Many state-owned companies have have been acquired by well-connected insiders at sweetheart prices. Entrepreneurs have gained control of once-collective farms, harnessing them for private benefit in real estate ventures while peasants go landless.
From the beginning of economic reforms in the early 1990s through the end of the decade, nearly $4 trillion in public assets were transferred from state-owned companies to insiders in such dubious deals, according to Yang Fan, an economist at China University of Political Science and Law in Beijing.
Most Chinese scholars now portray privatization and China's larger embrace of the market as irreversible trends. Yet some intellectuals have criticized the move to protect private property as precipitous: Without first forging a modern legal system that affords aggrieved laborers and farmers the right to protect their own interests, they argue, the creation of property rights simply legitimates the looting of public assets.
"Ordinary people in China often say that 'privatization' really means power stealing wealth," said Kuang Xinnian, a literature professor at Qinghua University in Beijing, one of the more vocal critics.
The amendment on property declares that "private property obtained legally shall not be violated," and will be placed "on an equal footing with public property," according to the official New China News Agency. The other amendment enshrines in the constitution the "Three Represents" theory of former president Jiang Zemin, which broadens the base of the Communist Party to include the economic elite and businesses. The theory essentially holds that the Communist Party should represent the interests of all Chinese people, not just the proletariat.
At last year's 16th Party Congress, Jiang formally opened the ranks of party membership to entrepreneurs, a controversial step that provoked accusations from some scholars that the party's basic identity was being undermined. The move endorsed a long-entrenched reality: Many of China's entrepreneurs are former government officials who parlayed their party membership and connections to gain access to capital and assets.
The amendment introduced Monday establishes Jiang's theory as a guiding principle of the nation, along with the ideology of the Communist Party founding father Mao Zedong and the late supreme leader Deng Xiaoping, who embarked China on its market-embracing reform, the news agency reported. While that measure cements Jiang a place in the pantheon of China's great leaders, the news agency did not say whether he will be mentioned by name, a distinction that some party leaders reportedly oppose.
Execution Reveals Party's Grip in China
Case Highlights Flaws in Legal System
By John Pomfret
Washington Post Foreign Service
Tuesday, December 23, 2003; Page A12
BEIJING, Dec. 22 -- In a case that has roiled legal circles for months, China's highest court upheld a death sentence and then allowed the execution on Monday of an alleged gangster despite testimony from eight prison guards that the man had admitted to ordering a mob killing only after lengthy torture.
Legal experts criticized the decision and said the case of Liu Yong underscored serious problems in China's legal system. Government sources said the Supreme People's Court reversed a lower-court verdict under orders from the Communist Party's top law enforcement committee even though several of the judges opposed the decision, illustrating the control the party exerts over court decisions.
Defense attorneys and academics said the reversal despite the torture charges, which were backed up by affidavits from eight security service witnesses, marked a step backward for a country that has been struggling with police brutality for decades. "This case is going to set back China's development of a legal system by 10 years," said one of Beijing's leading lawyers and a senior member of All China Lawyers' Association. This lawyer, like other lawyers and legal experts, spoke about this case on condition of anonymity because he fears he could lose his job or face more serious punishment from the police.
Under Chinese law, confessions obtained through torture are not admissible in court. Even so, torture is common and, many legal academics argue, it remains the main method used by police to solve cases.
"This case shows that things operate in China because of the influence of a few powerful men, not because of the influence of law," said Daniel Yu, a research fellow at New York University School of Law. "And the most powerful men in the legal system in China are not judges. They are the police."
Yu and other experts said the decision in Jinzhou, a decaying industrial city in the Manchurian plains, is part of a series of recent defeats suffered by country's legal profession and raises questions about the commitment of the ruling Communist Party to establishing the rule of law. Premier Wen Jiabao, during a trip to the United States earlier this month, repeatedly vowed that the government was striving to improve the legal system.
According to police, Liu, 43, was the brutal head of a criminal organization that operated through extortion, corrupt land deals and murder. An entrepreneur who started off hawking clothes from a small stall, Liu eventually expanded his business into a sprawling conglomerate, the Jiayang Group, employing 2,500 people. At the time of his arrest in July 1999, Liu was a member of the legislature in Shenyang, a major northeastern city. Liu allegedly belonged to a cabal of corrupt officials, including former mayor Mu Suixin and deputy mayor Ma Xiangdong. Ma was executed in 2001. Mu is in prison and has untreatable lung cancer.
In April, Liu and his alleged henchman, Song Jianfei, were sentenced to death -- Song for beating up a cigarette vendor, who later died of internal bleeding, and Liu for ordering the killing because the man purportedly was a competitor. Liu hired a top litigation lawyer, Tian Wenchang, to appeal.
Tian collected the testimony of the eight retired officers, members of the People's Armed Police who said that at various times and locations they had witnessed police torturing Liu. Tian's success in convincing former officers to break a code of silence about police brutality marked a breakthrough for the legal system. The witnesses wrote of police denying Liu food and water, applying electric current to his body, and forcing him to squat in a small metal box for days.
On the stand, Liu admitted to some crimes such as bribing government officials but argued that is what every Chinese private businessmen needs to do. He denied any involvement in the cigarette dealer's death.
In August, the Liaoning Higher People's Court lowered his earlier death sentence to a sentence of death with two years' reprieve because, the court wrote, it could not "exclude the possibility that public security organs during their investigation extorted a confession by torture." That sentence meant that Liu would most likely get life in prison.
On Oct. 8, the Supreme People's Court took over the case, marking the first time since the 1949 Communist revolution that China's highest court would hear a common criminal case. Sources said the Communist Party's Committee of Politics and Law, which runs the country's security services, ordered the top court to issue a new verdict and sentence Liu to death. The sources said that Public Security Minister Zhou Yongkang, the second-ranking member of the committee, insisted on a death sentence, because he did not want a precedent set allowing confessions obtained by torture to be thrown out of court. Senior members of the Politburo, China's top political body, also agreed that Liu should be executed because public opinion seemed to be in favor of it.
The top court held its first session on Friday, but Tian, the defense lawyer, boycotted the meeting. In a lengthy report Monday night, state-run television quoted the high court as brushing aside the torture charges and saying that the seriousness of Liu's crimes warranted his death.
"Originally we thought this was a historical case," said Yu of New York University. "We had a high court that admitted some kind of torture occurred and that torture actually had legal consequences. But now they have really disappointed a lot of Chinese lawyers."
More than 100 defense attorneys have been arrested nationwide under a clause in a law that gives police and prosecutors sweeping rights to jail them for making statements in court that are deemed false, officials at the All China Lawyers Association said. That clause is having a chilling effect on criminal defense work, and scores of lawyers are leaving that side of the profession, senior defense attorneys said.