On March 16th, the last day of the annual session of the National People's Congress (NPC), Xinhua reported that a bill that has been revised and discussed for over 13 years, was finally passed.

It took less than a minute, according to official news agencies, for the almost 3,000 deputies to the NPC to overwhelmingly approve a landmark Property Law, the first to explicitly grant equal protection to public and private properties.

But even though the law has been passed and is set to take effect on October 1, 2007, China's national day, the controversy is just starting, with experts weighing in on the implications it might have on the Chinese political and economic landscape.

Drafting the property law

The proposed Property Law covers all types of property within China -- state, collective and private. It was first published in 2002, but was deferred because of ideological disputes about how it balances the rights of the State and private persons. The law was originally scheduled to be adopted in 2005, but was removed from the legislative agenda after legal scholars argued that the law would violate China's constitution, which characterized the country as a socialist state.

Central government departments, large companies, academic institutions and members of the public gave suggestions and raised objections to the draft law, which was again submitted to the NPC in 2006. Again, the law did not pass, which some legal experts attributed to the objections raised by conservative sectors that the bill was too partial to the protection of private property.

In the 2007 session of the NPC, the Property Law was again formally introduced to the body. According to the BBC, NPC Standing Committee Vice-Chairman Wang Zhaoguo told the deputies that the law "will safeguard the fundamental interest of the people" and that it was an attempt to adapt to new "economic and social realities" in China.

This time, the law was passed with a vote of 2,799 for and 52 against, 37 abstentions and 1 deputy did not vote.

Not without controversy

A New York Times article said that Beijing changed its tactics to get the law passed. In 2005, the Chinese leadership encouraged open discussion about property rights, but prior to the 2007 NPC sessions, the latest drafts of the proposed law were not "widely circulated." Conservative scholars who are said to favor preserving the socialist system, also said they were asked to refrain from airing their views.

The same article said that a petition signed by hundreds of scholars and retired officials argued that the law did not make a clear enough distinction between private property "gained legally through hard work and public property that falls into private hands through corruption." There was also the underlying argument that to maintain its socialist status, China could not give state-owned and private property the same status and remain socialist.

On the other hand, supporters of the Property Law say that property acquired through corruption will not be protected. Rather, it will protect the rights of property holders, as the Chinese property market has been in a "legal vacuum" prior to the adoption of the law.

Towards a harmonious society?

Two days before the Property Law was passed by the NPC, Stratfor, a leading think tank published a report saying that the draft had already undergone sixty changes since it was first offered for review to the deputies.

Stratfor highlighted the condition that "one can demand repair, replacement and rehabilitation if one's property is damaged," saying that this addressed the problem of local government illegally taking land from rural collectives. Because of the change, farmers can get "adequate compensation" if the land being returned to them could not be fixed or replaced.

The change, however, might also have negative consequences for foreign investors whose investments are located on land that has been illegally acquired by local governments. The change might also be a way for the government to require foreign investors to shoulder environmental quality upgrades, Stratfor says.

Wang was quoted by Xinhua as saying that the Property Law "reflects the spirit of the Constitution" and "adheres to the reform and opening-up policy." The Constitution of China was amended by the NPC in March 2004 to include protection of "legally obtained private property."

Wang emphasized that under China's socialist market economy, "all players enjoy the same rights, observe the same rules and bear the same responsibilities." He said that unless equal protection is secured, "it will not be possible to develop the socialist market economy, nor will it be possible to uphold and improve the basic economic system of socialism."

Whether the Property Law will be more divisive than unitive, and how or if it will affect the lives of the millions of China's people who live in the rural areas remains to be seen. But with private home ownership levels in China reaching up to 80 percent and economic indicators remaining positive, there is little doubt for the need to tackle the issue of private ownership.