Why is the crux of China's land problem not in the ownership system?
“Land development rights” are a useful exploration. The crux of the land problem is not in the ownership system, and the way out is not “privatisation”; we need to go beyond the conceptual trap of public versus private, and instead raise, analyse and resolve land problems more from the perspective of “public power” and “private rights”.
Land is agriculture's most important means of production, and industrialisation and urbanisation further involve the question of land use (especially the conversion of agricultural land). This article uses the concept of “land rights” to cover all possible rights and powers over land. In jurisprudential terms, rights here are private rights, and power is public power.
In real-world discourse, because of taking words too literally, and because of the habit of mind that asks of everything whether it “belongs to the public or the private”, any mention of “public power” and “private rights” is easily conflated with the other pair of categories, “public ownership” and “private ownership”. Moreover, “public” often carries a commendatory sense, and public power and public ownership seem to bear a certain political or moral halo; in mainstream ideology, public ownership, especially public ownership of land, is all the more not to be challenged. “Private”, by contrast, often carries a pejorative sense, and private rights and private ownership were long suppressed.
In recent years, with economic and social development and the continuous advance of market-oriented reform, the ideas of private rights and private ownership have begun to take root in people's minds. However, because of conceptual confusion in theory and the complexity of real interest relationships, people often blame the abuses of public power entirely on “public ownership”, and pin all hope of protecting private rights from infringement entirely on “private ownership”.
In fact, the pair of categories “public ownership” and “private ownership” mainly concerns economic reform, especially ownership reform, while the pair of categories “public power” and “private rights” concerns more the reform of the administrative and judicial systems.
At present, conflicts triggered by land problems keep arising one after another, and calls for land system reform are mounting. Among them is a view that attributes the crux of land problems, especially agricultural land problems, to the ownership system, is keen to talk about ownership reform, proposes the prescription of “land privatisation”, and even believes it will cure the disease at a stroke.
Those who hold the opposite view, meanwhile, often overreact as if facing a formidable enemy, even raising matters to the level of political principle, insisting on upholding their so-called “public ownership of land” as sacred and inviolable. Unfortunately, both opposing sides have contracted the ideological fixation syndrome of “public or private” and even “socialist or capitalist”. This public-versus-private controversy, though very lively, is like a chicken talking to a duck, hard to bring to any result, and ignores where the real problem lies.
Public power and private rights, public law and private law
Public power and private rights involve public law and private law. This pair of concepts originates in the civil law system, and since the 20th century scholars of the common law system have not rejected it either. Typical public law includes constitutional law, administrative law and criminal law; typical private law includes civil law and commercial law. Actual legal texts often combine elements of both public and private law, with differing emphases.
Public law provides norms and sets boundaries for the establishment and operation of public power; private law provides norms for the protection of private rights and the adjustment of interest relationships. Public power has coercive force, while private rights embody autonomy of will.
“Private rights” are often understood as the private interests of individual citizens, including personality rights, property rights, real rights, capacity rights, creditors' rights, kinship rights, inheritance rights, intangible property rights and membership rights.
As for public power, ever since civilised states appeared it has been a fact of existence, in China and abroad alike. As for its political basis, whether it is dictatorial autocracy, oligarchic rule or mass democracy, that is another question.
The well-known story of “the wind may enter, the rain may enter, but the king cannot enter” concerns precisely the division between public power and private rights, and at that time democratic politics was not yet on the agenda.
As for public power under a democratic polity, it is transferred by citizens through legal procedures; by ceding part of their rights, citizens constitute public power in order to control society and maintain order. From the standpoint of the theory of rights as the foundation, on the one hand rights are the source of power; on the other hand power is the safeguard of rights.
On the same piece of land there are both private rights and public power. The exercise of private rights is subject to necessary limits. In common law countries, too, case law or legislation mostly provides that land ownership should be subordinate to the public interest and that abuse of rights is prohibited.
Private rights are not the same as private ownership; property rights are not limited to ownership
Private rights are not the same as private ownership, although private property rights are one of the most important kinds of private right. Nor is the subject of private rights limited to the individual. Private rights are the property rights and personal rights held by citizens, enterprises and social organisations, and even the state, in autonomous and equal social and economic life. When the state participates in civil activities not in its capacity as a holder of public power (such as government procurement), what is involved is also private rights. All these private rights are each autonomous and independent, interacting on an equal footing, and together they constitute a private rights society, of which the market economy is one component.
According to the traditional conceptions of the civil law system, ownership is the most complete and most prominent of the various real rights, called in Roman law “the most general dominion over a thing”. But since the mid-19th century, as social interests and social fairness have received growing attention, a reform movement of “socialisation of ownership” has emerged, that is, recognition of the necessity of restricting ownership for the sake of social interests. For example, the German Weimar Constitution provided: “Ownership entails obligations; the exercise of ownership should serve the good of the state.” Japan's 1989 Basic Land Act provided: “Land is, for the people, an important asset both now and in the future, and an indispensable foundation for the various activities of the citizens. ... It is a matter of public concern, and therefore public welfare should take priority.”
With the development of the market economy, a notable marker of change in the modern ownership system is the trend known as “from attribution to utilisation”, that is, the legal system shifting from simply focusing on confirming the attribution of property to increasingly focusing on the circulation and use of property. For example, an owner may transfer to others the rights of possession, use and enjoyment of his property, and may even make limited transfers of the power of disposal (such as permitting a lessee to sublet). This situation is called “separation of the powers of ownership”.
As for the common law system, it never had a complete concept of ownership strictly corresponding to that of the civil law system. As the Oxford Companion to Law points out: “It is best to understand property as not a single right but a bundle of several different rights, some and even many of which can be transferred without losing ownership.”
From the Chinese tradition, under the historical “permanent tenancy system”, land ownership and land use rights were permanently separated, and land rights were divided into “subsoil rights” and “topsoil rights”. The landlord held the subsoil right, whose content was to collect rent from the tenant farmer; the tenant farmer held the topsoil right, whose content was permanent use of the land. The topsoil right could be inherited, and could also be rented out or sold. The subsoil right could be transferred separately without affecting the tenant's topsoil right. Among the people there also existed the “dian right” over immovable property such as land. It can be seen that our traditional land rights system was rich and varied in form, and cannot be summed up by the simple phrase “feudal private ownership of land”.
In short, property rights within private rights are not limited to ownership of property. The concepts of property rights, or “property rights” (PropertyRights), and ownership (Ownership) are closely connected yet subtly different. Ownership can be analysed into a series of relatively independently operating property rights, to such an extent that “original” or “ultimate” ownership is sometimes no longer so important.
Protection of private rights over public land
According to China's current laws and policies, land is divided by ownership system into state-owned and collectively owned; urban land belongs to the state, and rural land belongs to collectives, the latter mainly comprising agricultural land and collective construction land. Whether state-owned or collectively owned, both belong to “public land”, and various land rights such as use rights, income rights and disposal rights can be separated out from them, such as “state-owned land use rights” and “collective land contractual management rights”; these rights all fall within the category of private rights.
The land rights and interests of the parties concerned (including various legal persons) belong to private rights just like other property rights and interests, regardless of whether the party is an individual, a “collective”, a privately run unit or a state-owned unit, regardless of whether such land rights and interests are called “ownership”, “use rights”, “lease rights”, “mortgage rights”, or “surface rights”, “easements”, “permanent tenancy rights”, or “contractual management rights”, and regardless of whether the land is in the ultimate sense “state-owned”, “collectively owned” or “privately owned”.
When state-owned enterprises (and even the government representing the state) make purchases on the market, they too must act by mutual consent and pay the price (of course, if the government forcibly requisitions or expropriates, that is a typical act of public power). As Marx said, “commodities are by nature levelers”; “state-owned” money is no nobler than “privately owned” money, and the products of state-owned enterprises will likewise run at a loss or even go bankrupt if they cannot find a market. This applies to state-owned enterprises, let alone the various “collectively owned economic organisations”.
Whether land is public or private, private rights should equally be protected by public power. It seems easy to understand that private rights over private land should be protected by public power; in fact, as long as the private rights over public land are clearly defined and assigned to specific natural persons or legal persons, then they are essentially no different from the private rights over private land, and such private rights should equally be protected by public power. For example, the land contracted by Chinese farmers is collectively owned, that is, “public”, but the “contractual management right”, as a clearly defined and independent private right, should be protected by public power, and neither individuals, village collectives nor the government may infringe upon it at will.
Public power restrictions on private land
⟧ The state's restrictions on specific land in terms of planning, use and circulation belong to public power, and land expropriation and requisition belong even more to public power. For example, Article 10 of China's Constitution provides: “The state may, in the public interest, expropriate or requisition land in accordance with the law and grant compensation.” Article 13 of the Constitution provides: “The state may, in accordance with the law, expropriate or requisition citizens' private property and grant compensation.” The Fifth Amendment to the US Constitution provides: “nor shall private property be taken for public use, without just compensation.”
Whether state-owned land, collective land, or the “private land” recognised by the laws of certain countries and regions, all must submit to the management of such public power. The characteristics of public power over agricultural land are even more obvious, for example the state's strict restrictions on the conversion of agricultural land, and especially the “strict protection” of “basic farmland”.
Public land, including state-owned land, is always lawfully occupied by specific enterprises, institutions or individuals, and cannot escape government land management because it is “public” or “state-owned”; nor, of course, can “state-owned land use rights” be arbitrarily taken back because the land is “state-owned”. The same reasoning applies to collective land.
In fact, even in countries or regions with private land ownership, strict urban and rural planning and land use controls are universally present, and all the more so for agricultural land. This is a restriction of private rights by public power, and has nothing to do with whether the land itself is public or private. In the Taiwan region of China agricultural land is privately owned, yet farmers cannot change its use at will.
Of course, public power must adhere to the principle of “prohibited unless authorised by law”. For example, the legitimacy of establishing the public power of land expropriation is beyond doubt; the public interest on which it is based includes the protection of cultivated land, food security, meeting the demand for land for public use, urbanisation and urban planning, and so on.
The clear definition of this public power lies in prescribing under what circumstances and through what procedures land expropriation is carried out, and the determination of the “public interest” is especially important. In China the scope within which the power of land expropriation is set is still too broad, and abuses of public power often occur.
Conflict and balance between public power and private rights
Public law and private law, public power and private rights, intersect and influence each other. Public power must both protect the free exercise of private rights from infringement and impose necessary restrictions on private rights for the sake of the public interest; neither can be dispensed with. At the same time, besides legislation (public law such as administrative law) regulating public power, private rights are also required to check public power; neither should be neglected.
Jiang Ping once said: “Now private rights are increasingly awakening and expanding, while public power still retains considerable intervention and regulatory force, which will inevitably produce conflict between public power and private rights in a transitional society, and at certain times there may be sharp conflict. This is caused by objective laws.”
How to ease the conflict between public power and private rights, and in particular how to limit public power within a certain range and safeguard the inviolability of private rights, is an important topic of modern legal significance. From a normative perspective, public power and private rights should be in a state of dynamic balance. To this end, every public power and private right concerning land must be clearly defined - reflected in economics as clearly defined property rights - and the protection of private rights by public power must be standardised and strengthened, while legislation is used to constrain public power and private rights are used to check and balance public power.