March 07, 2007

China Bans New Internet Cafes; Set To Restore Private Property Protections

Having travelled to China in 2001, I was astonished to see how many internet cafes lurked about throughout China, with a handful in places as remote as Tibet--where yaks and Toyota Landcruisers outnumber the people with basic amenities aside from electricity. Scores of Chinese students and young adults frequented the oft-ill lit and non-air conditioned internet joints to play games or send email. Early filters managed to make sites like the New York Times and other major Western media unable to load (although specific URLs made it through). This internet censorship was frustrating for practical reasons--as it might block our email access--but also in terms of ethical and legal points-of-view.

So it comes as no surprise, after years of shutting down internet cafes suspected of permitting "illegal" activity, that China has chosen to put a freeze on opening new internet establishments, even as the 2008 Olympics loom and scrutiny of the world media and larger numbers of tourists make their presence felt.

What is unexpected, however, is the imminent reintroduction of private property rights, a necessary and complimentary legal move institutionalizing the expansion of the market economy, which were stripped by Mao and the Communists over 50 years ago:
China is set to take another giant stride away from Maoism this week with the passage of a controversial bill to protect private property. The proposed law - the first of its type since the Communists seized power and nationalised assets in 1949 - will be submitted to the National People's Congress, which opens today, despite fierce resistance from leftwing politicians and academics.

Old-style Marxists oppose the property rights bill, which they warned would worsen inequalities in society and legitimise the theft of state assets by corrupt officials.

But in a sign of the growing influence of the private sector and the middle class, the government has decided to press for the enactment of what officials describe as a basic law for the market economy. The law is almost certain to be passed. The parliament, which meets for only a few days each year, has never rejected a Communist party-backed bill or budget in more than 50 years.

Since Deng Xiaoping launched the country on a path of market reform in the late 1970s, billions of dollars of state-owned assets have been privatised and huge swathes of communal land have been requisitioned for developers, generating one of history's most spectacular booms. But the rapid marketisation of China's economy has created one of the world's most unequal societies, as well as resentment that corrupt Communist cadres have illicitly made fortunes from privatisation. In a survey by the Chinese Academy of Social Sciences, half of the respondents believed the rich had acquired their wealth through illegal means.

Critics of the new bill say it will legitimise what they see as a mass theft from the people. "The property law basically takes all the illegally gotten income and legalises it," said Han Deqiang, an economist at Beijing University of Aeronautics and Astronautics. "It is too liberal. It is too rightwing. This is a step back to the laissez-faire ideas of the 18th century."

But he did not expect legislators to block it. "Most representatives in the People's Congress are high-level officials from the provinces. They have personally benefited from privatisation so they support the new law."

The bill would give private property the same legal status as state property. Although details have yet to be made public, it is expect to include a passage that states: "Ownership rights of the state, groups and individuals are protected by law, and no individual or organisation may violate these rights."
. . .
The bill reflects the growing importance of the private sector. Up until 1998, state-owned firms were the mainstay of the economy. Today private businesses account for more than 65% of GDP. There are also more capitalist entrepreneurs in a Communist party that is moving further and further away from its ideological roots. Since 2001, when private businessmen were first allowed to join, more than 40% of the owners of major corporations have signed up.


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