An Analysis of the Conflict in Chinese Property Law: Eminent Domain Powers versus Real Property Rights

An Analysis of the Conflict in Chinese Property Law: Eminent Domain Powers versus Real Property Rights

by Dr. Fang Ye

This article, written by a partner at a Shanghai, China, law firm, covers eminent domain powers and real property rights in China. It discusses the public interest requirement in land-taking laws in China, the exercise of eminent domain powers in China, and the illegal taking of property rights and land in that country. The article also covers proposals for future eminent domain procedures in China.

Excerpt:

The matter of real property rights is an important issue, and one that causes significant social controversies in the People's Republic of China (PRC). This essay intends to give an analysis of the conflict between eminent domain, the powers of a government to expropriate private property for public use, and real property rights. The consequences of this conflict between eminent domain and real property rights are significant. For the purposes of the discussion, this article will begin by introducing the historical development of "public interest" as a stipulation for eminent domain. We will then discuss how the government and its agents are able to bypass the public interest stipulation, and we will argue that the public interest stipulation is impracticable because of the tension it highlights between the laws and the actual purposes for land-taking. Lastly, this article will propose stricter adherence or new regulations regarding eminent domain procedures, so that land transfers may occur – even if for commercial purposes – in accordance with law and administrative regulations.

I. The Public Interest Requirement in Land-Taking Laws

The concept of public interest appears in Chinese property law, as well as in various other laws and regulations, but finding the exact meaning of the term poses more difficulty. According to Chinese law, the right of eminent domain cannot be exercised unless there is a need based on public interest. However, if the state is to exercise eminent domain for the purpose of public interest, the meaning of "public interest" must first be defined by law. Laws and regulation in China have failed to offer a specific definition of public interest. Instead, until now, they have applied a method of incomplete enumeration, meaning that actions that may qualify as public interest works have not been expressly laid out.

Eminent domain laws have existed in China for over half a century, and though some of these laws cast light on the types of public projects eminent domain may be used for, none have actually defined the concept of "public interest." The earliest legal document which provided instructions regarding eminent domain is The Regulation on Land Rights of Shaanxi-Gansu-Ningxia Border Region (1944). It is explicitly written in this regulation that "building national defense, repairing traffic roads, improving municipal construction" fall within the scope of "public interest." The Regulation on Land Reform for Suburbs (1950) enacted by the Government Administration Council stipulated that "municipal construction and other projects" were public interest but failed to give further detail or explain what these "other projects" entailed. Without a clear definition of public interest, the first Constitution of PRC (1954) only reaffirmed that public interest was the necessity for eminent domain. However, the Regulation for the Acquisition of Land for State Construction (1958), adopted by the Standing Committee of the National People's Congress, explicitly enumerated that "building factories, mines, railways, transport, water conservancy, national defense or other projects, or carrying out the construction of cultural education, health, and municipal construction" were public interest projects, and therefore justified the exercise of eminent domain powers. The Acquisition of Land for State Construction Regulation (1982), also passed by the Standing Committee of the National People's Congress, further stipulated that "carrying out economic, cultural, national defense construction, or running the social public career" were public interests. The Regulation for the Expropriation and Compensation for Housing on State-owned Land (2011) provides a list of public interest enterprises and efforts. Nonetheless, even this detailed list still contained the ambiguous "other public interests stipulated by laws or administrative regulations" phrase. Thus, although no specific definition is given, a general idea of "public interest" is provided under Chinese law.

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Dr. Fang Ye is a partner of ALLBRIGHT LAW OFFICES, the largest PRC law firm headquarted in Shanghai, China. Her practice area includes real estates and finance, land taking, corporate law, and litigation. Dr. Ye got her S.J.D and LL.B. from East China University of Politices and Law, and her doctoral degree dissertation is about land taking. She got her LL.M. from both William S. Richardson School of Law, University of Hawaii, and Tsing Hua University.

The author wishes to express her sincere gratitude to those associates and interns who contributed to the proofreading, translation, editing, and language polishing, including, but not limited to, Chang Liu, Ester Muwanga, Zhiyao Shan, Joy Morgen, Sarah Styslinger, Shiqian Ye, and David Huynh.