Editorial: Boosting Protections for Property Rights Is Need of the Hour
Strengthening property-rights protections is expected to be high on the agenda of the national legislature’s annual meeting in Beijing, which kicks off on Sunday. It has been over three months since the central government issued a crucial blueprint that proposes greater efforts to safeguard property rights. Both central and local authorities have reiterated efforts to deliver on reform commitments. The country’s top law enforcement officials also pledged at a key meeting in mid-February to overturn previous cases involving wrongful expropriation of private assets.
The central government guidelines, issued in November, promise equal protection for all types of property rights, both state-owned and privately owned, and require plugging any loopholes in the legal procedure for handling cases involving property rights.
More importantly, they require reassessing controversial cases that may involve wrongful convictions or expropriation of private assets. They also vow to compensate defendants in cases where there was a miscarriage of justice. They also say private businesses won’t be punished for questionable business practices that may have violated regulations in the early days of China’s economic reform and opening-up that were later considered outdated and rescinded.
Meng Jianzhu, head of the Communist Party’s Commission for Political and Legal Affairs, reaffirmed at the February meeting that private enterprises that might have violated outdated rules or laws in the past will not be pursued, and previous wrongful convictions will be overturned.
This signals a more-tolerant attitude toward private businesses. It also calling for caution when slapping criminal charges against businesses and tightening legal procedures applicable to criminal cases involving corporate assets so that accusations against a company or its executives do not interrupt regular business operations. These promises have boosted public confidence in the security of private assets, and it will also help the broader economic and legal reforms in the country.
Commitments to better protect property rights must be enforced step by step. The public, however, is waiting for concrete examples to show that change is gradually taking effect. A specific case would be the best way to show that the government is going to walk the talk. Simply paying lip service to reform will hurt its credibility.
Reopening old cases is a tough and complicated task. Local authorities can start by reviewing some high-profile ones where the original sentences were deemed controversial to demonstrate their determination to correct any miscarriages of justice.
The Supreme People’s Court in late November published two documents laying the legal groundwork for additional property-right protection efforts. But the details need to be fleshed out to guide local judges and prosecutors. At the recent meeting, Meng urged policymakers to quicken their pace to work out more-detailed measures. This requires good coordination between central and local government departments.
When focusing on safeguarding the interests of private businesses, it is important to weed out businessmen who intentionally take advantage of regulatory loopholes to serve their own interests. Financial market regulators have recently stepped up oversight on unscrupulous investors. Liu Shiyu, chairman of the China Securities Regulatory Commission, recently said China “will catch ‘capital crocodiles’ and have them extradited.” Some of these “capital crocodiles” the regulator cited may be private entrepreneurs, but law-abiding businessmen deserve better protections.
Entrepreneurs are the backbone of an economy and they should be encouraged and protected, although some of them might have violated rules in the days when China’s market and legal system were still being formed. Their cases should be viewed in context given the tumultuous times and deserve some tolerance. But financial predators now seeking illicit gains through murky business deals should be stopped because they harm markets.
Cracking down on investors who break laws will not undermine efforts to promote property rights protections. Both are among the top priorities for China’s economic agenda this year. And it is only with this two-pronged approach that China can strengthen the rule of law.
Hu Shuli is the chief editor of Caixin Media.
Founder & Publisher, Caixin Media
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