China releases guideline on protection of property rights

China on Sunday released a guideline on better protection of property rights in an effort to shore up social confidence and promote social justice.

It is the first time for China to issue a guideline of state level on protection of property rights.

The country will provide equal, comprehensive and law-based protection to all kinds of property rights and encourage the participation of the public in the process, says the guideline issued by the Central Committee of the Communist Party of China (CPC) and the State Council.

Major problems concerning property rights must be solved to increase protection and build a long-term mechanism. Although China has worked to protect property rights, there are still many problems, including infringement on private property by public power and weak protection of intellectual property rights.

Secure property rights "raise people's sense of wealth security, boost social confidence, foster positive expectations and raise the impetus for entrepreneurship and innovation by various economic entities," according to the document.

Protection will also help social justice while maintaining healthy economic and social development.

China will further clarify the relations between owners and managers of state-owned property, and push for equity diversification of state-owned enterprises (SOEs) and modern corporate governance of those companies.

SOEs should improve internal supervision, ensure their boards operate within the law and better supervise their managers, the document says.

The guideline highlights equal protection of property rights for various market entities, while vowing to enhance protection on non-public properties according to the criminal law.

Property right cases that remain unresolved due to historical reasons should be dealt with appropriately, says the guideline. An accountability system shall be implemented to guard against improper court decisions.

Law procedures should be elaborated concerning the sealing up, distraining, freezing, auctioning or other disposal methods of property belonging to enterprises or individuals that are suspected to be unlawful.

The document stresses that law enforcement officers should take a prudential attitude toward applying different degrees of judicial policies to property rights and economic disputes. The presumption of guilt principle should be banned.

Mechanisms to ensure governments of all levels to be trustworthy should be improved. Officials should be severely punished for breach of contract.

Regulations on expropriation of property should be improved and the scope of public interests should not be broadened. Compensation should be fair and square.

The guideline also vows to intensify protection of intellectual property rights. Violators' credit records will be contaminated and relevant punishment result will be made public.

Policies should be upgraded to increase property income of urban and rural residents. Follow-up legal arrangement on residential construction land use right when it expires will be discussed.

Fostering a sound social environment for property right protection is also important, the document says.

"Many policies and measures appear for the first time in this document of the central authorities, showcasing China's unprecedented efforts to step up protection of property rights," said Yin Wenquan, head of the National Development and Reform Commission's Institute of Economic System and Management, speaking highly of the significance for private property protection.

"The central government's decision to see irregular actions in the past in a historical and dialectical perspective would set private entrepreneurs' mind at ease and encourage their investments," said Chang Peng'ao, professor with Peking University Law School.

Detailed methods on property right protection should be introduced as soon as possible, Chang suggested.

Sun Xianzhong, researcher from the Institute of Law of Chinese Academy of Social Sciences, highlighted the significance of the guideline's arrangement to improve governments' credibility, saying it is meaningful to constrain government power and safeguard the rights of the people.