CHINA: Constitution change to promote private property


Eva Cheng

The March 5-14 annual session of China's rubber-stamp parliament, the National People's Congress (NPC), will be asked by the country's rulers to approve 14 changes to the country's constitution, the most important of which is to "encourage, support and guide the development of the non-public economic sectors".

The amendment, to Article 11(2) of the constitution, will further legitimise and give a practical boost to the deliberate efforts of the Communist Party of China (CPC) since the early 1990s to restore capitalism in China.

In an associated act, the NPC will also be asked to incorporate the so-called Three Represents "important thoughts" of former CPC leader Jiang Zemin into the constitution's preamble (paragraph 7), putting it on par with "Marxism-Leninism, Mao Zedong Thoughts and the Theory of Deng Xiaoping" as a guide for China's development.

Jiang, who was concurrently the CPC general secretary, the country's president and head of the Central Military Commission (CMC) for most of 1990s, first expounded the Three Represents in 2000 but his name wouldn't be included in the preamble. This indicates he's lost his battle within the party leadership to achieve permanent recognition by name in the constitution.

Jiang relinquished the party's general secretaryship in October 2002 to Hu Jintao and China's presidency to Hu in March 2003, but remained head of the CMC.

Capitalists as 'builders of socialism'

According to Jiang's Three Represents, "the CPC must represent China's advanced productive forces, its advanced culture and the fundamental interests of the overwhelming majority of the people". In reality, Jiang's Three Represents were meant and were understood in China and abroad to provide the "theoretical" justification for the CPC's current pro-capitalist course.

"The Three Represents campaign, which has gained prominence at the moment, is about reinventing the Chinese Communist Party as a bourgeois party, one that represents the middle classes rather than the workers and the peasants", noted Phil Dean, director of the Contemporary China Institute at London University, in an interview with BBC News on March 4.

Another associated amendment, in the preamble's paragraph 10, seeks to include "the builder of socialism" into the "patriotic united front" — the Chinese People's Political Consultative Congress (CPPCC) — that the Chinese Stalinist regime maintained after the 1949 revolution.

In his report to the CPC's 16th Congress in November 2002, Jiang justified formally admitting capitalists to the party's membership by declaring that "proprietors of private enterprises" are "builders of socialism with Chinese characteristics".

The NPC will be asked to include in Article 13 the statement that "the citizens' lawful private property will not be violated", adding that if the government needs to, for "public interest", take over those resources, the owners will be compensated. As it exists now, the article already assures the protection of the "right of private property" and the "right to inheritance".

Protecting capitalists' property

Commenting on the proposed amendments, the December 28, 2003 Beijing People's Daily, said the call to protect "lawful private property" and promote the "non-public economy", "are greatly hailed by private entrepreneurs, who have accumulated wealth in the past two decades". It adds that "non-public economy now contributes to half of China's national economic growth".

These proposed amendments are as much a testimony to the unfolding process of capitalist restoration in China as being a further boost to it. Since the current constitution was adopted in 1982, it has undergone three series of amendments that bear witness to and increasingly boost the country's pro-capitalist course.

The 1988 amendments formally bless the private economy, allowing it to exist and grow within limits, but stipulating that it was only a "supplement" to the public sector.

Among the 1993 amendments, Beijing introduced the concept of a "socialist market economy" to legitimise its turn the previous year toward a full-scale restoration of capitalism.

The 1999 amendments declared the private sector an "essential part" of the "socialist market economy".

In July 2001, the CPC formally admitted capitalists into its ranks. But this was only catching up with reality. According to a November 13 report by the official Xinhua news agency, 13.1% of "private business people" were CPC members in 1993. By 2003, 29.9% of "private business people" were CPC members.

In January 2003, Yin Mingshan, the president of Chongqing Lifan Industry enterprise and one of China's 50 richest persons according to the US magazine Fortune, became vice-chairperson of the CPPCC in Chongqing, a city with 10.2 million inhabitants in southwestern China. That position has an official ranking equivalent to a provincial vice-governor.

In that same month, Xu Guanju, chairperson of Zhejiang Chuanhua Group, another private firm, became vice-chairperson of the Zhejiang provincial committee of the CPPCC. Both Xu and Yin are also presidents of the federation of industry and commerce, the capitalists' exclusive club, in their respective province.

On February 10, 2003, China's General Administration of Civil Aviation approved a bid by the Junyao Group, a well-known private firm, to buy the Yichang Airport, 30 kilometres from the Three Gorges dam project. Xinhua commented 10 days later that the deal is "a landmark event for China's special, monopolised and half- military aviation business".

By the time of the last NPC session in March 2003, 133 of the deputies who attended were capitalists. Though the number appeared small against the total number of 3000 deputies, it was almost a 300% jump from the previous year's NPC session.

These capitalists also have allies far and near. The March 12, 2003, New York Times reported that since the NPC's 2003 session started, "several groups of pro-business representatives have issued loud public calls for a constitutional amendment to protect private property from arbitrary confiscation and marauding officials". The NYT added: "Other legislators called for special laws to protect and encourage private businesses."


When Beijing escalated its privatisation drive in 1997, then-premier Zhu Rongji said that only the "small and medium-sized state firms" would be sold, leaving the "big ones" in public hands. But the borderline between the two categories was never spelt out.

Later on, even big state firms were privatised and Beijing declared that only firms of "strategic importance" to the Chinese economy would not be privatised — without clearly defining what was meant by "strategic importance".

The October 15 Washington Post reported that the CPC's central committee plenum had decided to "continue supporting state-owned firms, while encouraging private companies to enter sectors previously closed to them such as infrastructure and public utilities". Beijing's creeping agenda to dismantle the state sector while paying lip service to the contrary couldn't be clearer.

An extensive campaign to transform state firms into shareholding companies also started in the early 1990s, with assurance that only a small portion of the shares would be permitted for trading (i.e., sold into private hands). China launched its stock markets in 1991.

In the late 1990s, Beijing's attitude changed, arguing that the large amount of "non-tradeable" state shares opened the country's stock markets to easier manipulation, thus increasing their instability.

In June 2001, Beijing tried to sell "a small portion" of the "non-tradeable" state shares but this triggered a spending spree on China'[s generally sluggish stock markets. The shareholders of the tradeable shares feared that the value of their holdings would be eroded by the increased supply. The State Council withdrew the sales offer in June 2002.

The scheme is now being revived. According to the December 1, 2003, China Daily, quoting Beijing's Economic Observer, the securities authorities contemplate allowing companies to trade their "non-tradeable" state shares only if they receive the blessing of 50% of the holders of their tradeable shares.

Trying to give a false sense of security, on February 5, Li Rongrong, minister for the State Council's assets supervision and administration commission, said that not all state shares would become tradeable.

According to a November 13 Xinhua report, the number of China's registered "private entrepreneurs" ballooned from 238,000 in 1993 to 2.435 million in 2002, and the number of workers they employed jumped from 3.7 million to 34.1 million over that period.

On January 11, Xinhua reported that by November 2003, China's private firms has increased to 2.96 million, with registered assets totalling 3.35 trillion yuan (US$405 billion), and that they contributed to 23% of China's GDP in 2002. Officially-designated private firms are only one component of the non-public sector.

Further possible changes to the constitution to strengthen the position of private employers in the country's economic and political life have been expected and hotly debated within China since 2001. But Beijing issued a decree in July last year to ban the discussion.

Four months before that, Fang Ning, deputy director of the Institute of Politics at the Chinese Academy of Social Sciences — China's key policy think-tank — told the March 20, 2003, Far Eastern Economic Review: "Marxism is about the elimination of private property. Today, we are going to turn around and recognise private ownership and protect [private] property. People feel very emotional about this, 'So what was our revolution about? All that loss of life and sacrifice was about what?' That's why people find it hard to accept that we are protecting private property."

From Green Left Weekly, March 10, 2004.
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