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Chinese property law has existed in various forms for centuries. After the Chinese Communist Revolution in 1949, most land is owned by collectivities or by the state; the Property Law of the People's Republic of China passed in 2007 codified property rights.
History
Imperial China
Use of property was divided into topsoil (tianpi) and subsoil (tiangu) rights. Landlords with subsoil rights had a permanent claim to the property if they paid taxes and received official seals from the government, but did not have rights to actively use the land. Instead, those with topsoil rights paid the subsoil landlord a fixed rent (or part of the proceeds of what was produced on the land) for not only the right to farm and live on the land, but the right to independently sell or lease the topsoil rights to another party. So as long as another party held topsoil rights, the party holding subsoil did not have right to actively use the land or evict the topsoil owner. Land, like other forms of property, was seen as being held collectively by the family and not individuals within the family. Another concept in imperial Chinese property rights was dianmai (典賣/典卖), more commonly known as huomai (活賣/活卖), or conditional sales of property[1] that allowed the seller (i.e., his family) to buy back the land at the original price (without interest). The assumption was that land, having been held by a family for generations, should stay with the same family. From the Sui dynasty onwards, women could not hold property directly and, for land to stay in the same family, it had to pass between male heirs following the rule of primogeniture.[2] The Imperial times were time and space dependent and were affected by wars, rebellions and natural disaster. During such times, there were frequent shifts in ownership as abandoned land was reclaimed after former owners had fled or died.[3] During the Qing dynasty (1644-1911) some titling of land ownership did take place, albeit not systematically or at a national level, and historical titles have been handed down to the present.[4]: 67 Newly accrued land along rivers, creeks and other waters – so-called riparian rights – was clearly designated as state property, and the Qing government repeatedly emphasized this in imperial edicts.[4]: 100
Nationalist China
During the rule of the Nationalist government (1912–1949), communal and customary rights gave land tenure to landlords, nobles, religious institutions, and village communities. Meanwhile, the state drafted property laws, which were based on German and Japanese civil law traditions.[3]: 354–355 [4] : 17 Under Nationalist rule, the private sector owned most forests. After they had gained power, the CCP gradually worked towards the abolition of private ownership. Private forest holdings continued to exist until the collectivization of the countryside.[4]: 60
Communist China
In the areas controlled by Communist forces traditional land tenure was broken up through Land Reform. In the 1930s Land Reform in the old revolutionary base areas, such as the Jiangxi Soviet and the Shaan-Gan-Ning Border Region, was carried out with the least possible social disruption. Middle and rich peasants were allowed to keep part of their land holdings, whereas expropriated landlords were allocated sufficient land to make a living. Yet, directly after the Second World War, Land Reform took a more radical turn. It was not until a speech by Mao in 1948 that a moderate stance was taken once more.[4]: 5–6
There were several times of changes in ownership and control over land in China. Regarding rural land, these changes began with the establishment of the Higher Agricultural Production Cooperatives in 1956. Thereafter rural private land ownership was effectively abolished through Land Reform, which left land in the hands of the state or the collective.[4]: 6
China's Land Reform (1950-1952) was one of the largest examples of land expropriation in world history. In the process, between 200 and 240 million acres of arable land were redistributed to approximately 75 million peasant families.[5]: 8
Until decollectivization in the mid-1980s, there were only two factors making for change in land policies: the level of collective ownership and the extent of freedom in private land use. The Great Leap Forward (1958–1962) forced the central leadership to decentralize land ownership from the commune to the production team. This was laid down in Party regulations promulgated in 1962 (the Sixty Articles)[4]: 6 Freedom in the private use (not ownership) of land shifted various times. Before 1958, when rural China was organized into huge administrative units—the people's communes—farmers were allocated small plots of collective land for their own use (ziliudi). Depending on the region, farming was more or less privatized, with managerial responsibilities vested in the household. Farm households negotiated contracts under which they had to deliver grain quota to the state at low fixed prices. The surplus grain above the quota could be sold freely at private markets. These privileges were rescinded twice (and subsequently reinstalled) during the Great Leap Forward and the Great Proletarian Cultural Revolution (1966–76).[4]: 6
In the case of urban land, after the nationalization of industries and companies in the early 1950s, it was deemed state-owned, although not legally stipulated for a long period of time. Land owned by the state was seen as "absolute" and therefore, did not warrant a title; a principle adhered to – and enshrined in regulation – until today.[3]: 335 However, the notion that urban land is tantamount to state ownership and, therefore, excludes private ownership had been formally disputed by the State Land Administration up to the early 1980s.[3]: 335
Deng Xiaoping's rule
In the era of Deng Xiaoping, a fundamental legal source of the regime of property and property rights in the PRC lay in the Constitution of PRC enacted in 1982.[6] The 1982 constitution provided for the "socialist public ownership" of the means of production, which takes two forms—state ownership and collective ownership. In 2004, the fourth amendment to the constitution was made. Article 13 of the constitution provided that: "The lawful private property of citizens shall be inviolable. The country shall protect in accordance with law citizens' private property rights and inheritance rights. The country may, as necessitated by public interest, expropriate or requisition citizens' private property and pay compensation therefor." It can thus be seen that China's property laws have been undergoing developments. The most recent development would be the enactment of the Property Law in March 2007 (after 14 years of debates), which is noted as one of the most important core components of the evolving civil law in the PRC.
Real property rights
An investor who wants to invest or develop land or property in China must bear in mind China's property laws, most notably the property law introduced in 2007,[7] which for the first time protects the interest of private investors to the same extent as that of national interests.[8]
Types
Real property rights in China can generally be grouped into three types: ownership rights, usufructuary rights, and security rights.
Ownership rights
Ownership rights are protected under Article 39 of The Property Law of the People's Republic of China, which gives the owner the right to possess, utilize, dispose of and obtain profits from the real property. However, this right has to comply with laws and social morality. It can harm neither public interests nor the legitimate rights and interests of others.[9]
In general, rural collectives own agricultural land and the state owns urban land. However, Article 70 of The Property Law allows for ownership of exclusive parts within an apartment building, which endorses the individual ownership of apartments.
Usufructuary rights
The owner of a usufructuary right has the right to possess, utilize and obtain profits from the real properties owned by others.[10] The obligee may not intervene in the exercise of rights by the owner of the usufructuary right.[11] There are several types of usufructuary rights. These include the right to land contractual management, the right to use of construction land, the right to use of residential housing land and easement.
Right to land contractual management
The right to land contractual management allows a contractor of the right to possess, utilize and obtain profits from agricultural land.[12] This right is transferable, but the land use rights based on agricultural household contracts cannot be changed arbitrarily for non-agricultural purposes.[13]
Right to use of construction land
The right to use of construction land is only with regard to State-owned land, and the owner of the right is able to build buildings and their accessory facilities. This is in addition to being able to possess, utilize and obtain profits from the land.[14] This right may be established by means of assignment or transfer,[15] but transfer is limited.[16] The ownership of the buildings will change together with the land.[17] As a protection of the right, the term of the right shall be automatically renewed upon expiration[18] If it has to be taken back, compensation shall be given.[19]
Right to use of residential housing land
The owner of the right to use of residential housing land can possess and utilize such land as collectively owned, and can build residential houses and their accessory facilities.[20] The Law of Land Administration and other regulations will apply to the attainment, exercise and assignment of the right to the use of residential land.[21]
Easement
The owner of easement has the right to use the real property of others to benefit his own real property. Easement will be governed by the terms of a contract.[22]
Security rights
Forms of security rights include mortgages, pledges and liens. Holders of security rights have priority if a debtor defaults on his obligation.[23] This is to ensure obligations are met. Security rights do not exist independently, but require a valid principal claim, and lapse when the debt lapses.
Procedures in engaging in property investments
Buying land
Foreign investors are not allowed to buy land in China. The land in China belongs to the state and the collectives.
Obtaining land use rights
A land user obtains only the land use right, not the land or any resources in or below the land.[24] A land grant contract shall be entered into between the land user and the land administration department of the people's government at municipal or county level.[25]
The land grant contract must be signed. Land use rights can be obtained from the land administration department by agreement, tender or auction.[26] Regardless of the method by which the land use rights is granted, a contract for grant of land use right, or more commonly known as a land grant contract, must be entered into by the land user and the local land administration authority or municipal governments at or above the county level as grantor.[27]
Article 12 of the Provisional Regulations on Grant and Assignment of Urban State-owned Land Use Right states the different duration of rights provided for different purposes.
| Purpose | Years of Grant |
|---|---|
| Land for residential purposes | 70 years |
| Land for industrial purposes | 50 years |
| Land for purposes of educational, scientific and technological, cultural, health care or sports | 50 years |
| Land for commercial, tourism or recreational purposes | 40 years |
| Land for combined usage or other purposes | 50 years |
Registration
In China, there is no unified official procedure for the rules on the registration of land-use rights and the ownership of property.[28] All interests in land must be recorded in the official government register. This register is proof of ownership. However, different interests might be registered under different registries.[29] The Property Law only offers a general guideline as to recordation. Peter Ho has described the recordation of Chinese property rights per institution as it exists until 2014. An overview is in the table below.
| Type of property right | MLR | MoA | SBF | MOHURD | MOCA | work-unit/collective | ||
|---|---|---|---|---|---|---|---|---|
| Ownership of land | ownership of collectively owned rural land | XI | ||||||
| ownership of state-owned rural and urban land | need not be registered by lawII| | |||||||