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Wed, Dec 24, 2003 - Page 12 News List

China's communist leaders seeking to protect property

AP , BEIJING

Millions of Chinese who have plunged into capitalism by starting businesses and investing in stocks will be guaranteed their right to private property for the first time since the 1949 revolution under a constitutional amendment proposed by China's communist leaders.

The change would give an official status to the entrepreneurs who once were considered the enemy of communism but now drive China's economy, creating millions of jobs and dotting the skylines of Beijing and other cities with office towers and apartment blocks.

After months of debate, party leaders submitted the proposed amendment Monday to the National People's Congress, along with a proposal to enshrine in the constitution the theories of Jiang Zemin (江澤民), the former leader who invited capitalists to join the party. Approval by the legislature should be a formality.

The changes reflect the party's decision to cast off leftist dogma in pursuit of prosperity and national status -- and to embrace the forces driving change in order to stay in control.

"The Chinese leadership understands that the private sector will be the engine for economic growth," said Joseph Cheng, a political scientist at the City University of Hong Kong.

In part the change is symbolic, bringing the constitution up to date with China's market-driven reality. But it will also likely strengthen the rule of law in a business environment where many common transactions go on without legal structure or regulation.

The lack of constitutional protection has not prevented millions from rushing in to capitalism. Private business has driven a surge in living standards for ordinary Chinese and has created the jobs needed by China as state companies slash payrolls in a race to become profitable. The government of Shanghai, China's commercial capital, says its economic output per person has passed US$5,000 a year.

Private property has been recognized in the constitution, but entrepreneurs have pressed for the next step of protection.

The amendment would likely be followed by changes in the law to create structures for business practices such as trading real estate or stocks and bonds -- things Chinese already do but without legal guidelines or protections.

One major practical boost for entrepreneurs could be that state banks will be more willing to offer them loans. State banks lend almost solely to state-run companies, seeing private firms as too risky. With their private property protected, businesses could use it as collateral to get loans.

Chinese entrepreneurs have also complained that foreign businessmen have an advantage, since regulations protecting foreign investments are already in place.

In 1993, two years after the Soviet collapse, Russia enshrined the right to private property in its constitution. But amid resistance by the Communist Party and other hardliners, it took years for laws allowing land and farmland sales to be passed.

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