October 12, 2008

A Real Great Leap Forward

As the nations of the world deal with the downside of globalization Beijing looks inward and is preparing Chinese for a monumental change - de facto private ownership of land. The Third Plenary Session of the 17th Central Committee of the Chinese Communist Party* concluded today with vague but profound statements on improving the lives of China's rural poor. The specifics will be hammered out in time for ratification at next year's National People's Conference (March 2009) but numerous leaks tell of the greatest liberalization in land holding since the first land reform in the 1950s when surplus and unused land held by large landlords down to "rich peasants" was redistributed to landless Chinese. After two decades (approximately 1958-1978) of mixed results with collectivization, landholding returned to the leased small plots originally devised by the Communist ("collective property") party at the the Third Plenum of the 11th CPC Central Committee under Deng Xiaoping in 1978. Now Beijing is ready to truly leap forward.

The new changes would allow for rights of sale, transfer, and extended lease (more than doubling the current 30 years to 70 years) on land to give rural Chinese de facto private ownership. The reforms are on the heels of last year's new law on private property. I predicted March 2007 that the new law protecting property could open the door to finally giving rural Chinese what they've long for for centuries - their own piece of China. This is a monumental change and very important to follow and understand its impact on the Chinese economy.

*The members of the CPC Central Committee are: Zhou Yongkang, Li Keqiang, Li Changchun, Wen Jiabao, Hu Jintao, Wu Bangguo, Jia Qinglin, Xi Jinping and He Guoqiang.

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