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A different look at demolitions

By Wang Yiqing (China Daily)
Updated: 2011-01-06 07:56

Jiang Ming'an and four other scholars from Peking University's Law School submitted a suggestion to the National People's Congress at the end of 2009 to review the Regulation on the Dismantlement of Urban Houses. Later, the Legal Affairs Office of the State Council, China's Cabinet, released a draft to solicit public opinion on the regulation on expropriation of houses on State-owned land and related compensation.

After waiting for more than half a year, Jiang and the other scholars told the media that they were unhappy with the stagnation of the regulation's revision process. The public got the second draft for comment only at the end of 2010. That the second draft took a year to be completed, unprecedented in China, shows the strong resistance the revision faces.

As professors of law, Jiang and his colleagues saw their suggestion as a way of doing "something" for people like Tang Fuzhen, who committed self-immolation in protest against the forcible demolition of her house in 2009.

Jiang, who has been studying administrative law for more than 20 years, says demolitions are crucial to urbanization and economic development. Local governments emphasize the role of demolition, because it is closely related to investment and GDP growth and can influence key issues such as employment, social welfare and social security. No wonder, some demolitions are carried out in the name of economic development, provoking severe conflicts.

According to a People's Daily report, the 1994 tax-sharing reform saw local governments' share in the country's financial revenue dropping from 78 percent in 1993 to 42.7 percent in 2004. Their proportion of expenditure, however, remained around 70 percent. Hence, land-based finance became the largest and most stable source of local governments' financial revenue.

Official figures show that local governments earned about 1.6 trillion yuan ($242.13 billion) by transferring land-use rights in 2009, or about 46 percent of their financial revenue. The figure could be more than 2 trillion yuan for 2010.

Besides, there is a conflict of interests between local officials and ordinary people. To enhance their political performance, some local officials promote demolitions even at the cost of sacrificing people's interests. Residents, on the other hand, think they deserve reasonable compensation for their houses and try their best to get it. But when they fail in their endeavor, they try all means to resist the demolition.

Jiang says the regulation's second draft has made some significant progress. The five scholars had suggested three main revisions: Compensation should be settled before demolition; the government has to expropriate land and compensate people for demolitions, and the legal relation of dismantlement and compensation should be defined as administrative legal relation; and legal expropriation should always precede demolition. The second draft has adopted all the three suggestions.

Making the government responsible for expropriation of land and compensating people is necessary to avoid violent demolitions, because a majority of the tragedies have taken place when real estate developers have tried to demolish buildings forcibly. Jiang says the government has also made headway in the part on compensation. "The range and standards of compensation both have improved."

But the deletion of two key points from the second draft has created a fresh controversy. On the reconstruction of old or dilapidated buildings, Article 13 of the first draft said the government could only expropriate a building if 90 percent or more of the homeowners agreed to the demolition. And articles 24 and 25 stated that unless at least two-thirds of the homeowners who would lose their houses agree to the compensation package, and at least two-thirds houseowners had signed the compensation package contract within a time frame, a building cannot be demolished. But these points, known as "majority rule", are missing from the second draft.

As key provisions protecting homeowners' rights, their deletion is regarded as regression, forcing many to say the second draft still favors local authorities. Jiang agrees with the critics.

Some people allege that the definition of "public interest" in the regulation is very broad. But Jiang says the meaning of public interest is complicated; it is hard to define it in simple terms. The main problem is that "we haven't distinguished public interest from commercial interest" because of the lack of a free land transfer market.

Irrespective of whether land today is used for commercial purposes or public interest, only a government can appropriate it and transfer the right to use it. Our laws regulate that rural land is collectively owned, and though farmers have the right to use it, they cannot dispose of it.

Jiang says this problem can be solved if only the government appropriates land for demolition in public interest and provisions are made to give farmers a larger say in the auction of land meant for commercial use.

But Jiang says the regulation will not include such a revision in the name of "public interest", because that would call for a revision of the Land Management Law first, a process that cannot be completed in the short term. "And that's why I think the most crucial thing to do is to revise the Land Management Law."

Jiang and his colleagues and their students began their new round of efforts on Dec 27, 2010, by submitting their suggestions on the second draft to the State Council's Legal Affairs Office. In their written submission, under the name of the Research Center for the Constitution and Administrative Law of Peking University, they suggested 11 major revisions, the most important being the appeal to reinstate the "majority rule". "There may be negotiations over the specific ratio of agreement", Jiang says, "but homeowners should have a say on demolitions." The scholars' written submission says that "at least two-thirds of the homeowners should agree to a demolition" and the same percentage should "sign the compensation contract" before a building is demolished. This will help "maintain the 'threshold' of demolitions and guarantee that people affected the most are not excluded from the decision-making process leading up to a demolition".