The Structure and Spirit of Chinese Property Law

Abstract

It is puzzling to many that China has maintained its socialist commitment to public land ownership while creating individual land rights that eliminated famine in rural China and ushered in the largest urban real estate market in the world. To make the situation even more puzzling, those land rights were initially created without legal authorization, being driven by farmers, entrepreneurs, and local officials on the ground. Chinese law eventually catches up with and sanctions practices that prove effective, but has never been able to regulate or ossify dynamic and ever-changing practices. That is why we see the co-existence of socialist public land ownership, the civil law principle of numerus clausus, and the common law practice of the bottom-up, continual reconfiguration of the bundle of sticks constituting property rights. These elements of China’s hybrid system are by nature in constant conflict with one another, creating friction and bumps on the country’s road to economic and social development. Together, however, they permit the system to get by, striking a balance between development and stability.

Keywords: China; property law; common law; civil law; socialist law; numerus clausus; state land ownership; collective land ownership; bundle of sticks; hybridism

JEL Classification: K11; K41; K23