Chinese Law Prof Blog

State Council issues regulations on urban takings and compensation

On January 21, the State Council promulgated new regulations on takings and compensation involving state-owned land. This basically means urban land; rural land, with some exceptions, is formally under a regime of “collective ownership” (I use quotation marks because it’s a term of art more than an inherently informative term). If you’re wondering how the state can take land it already owns, the answer is that individuals and other non-state entities can have quite substantial rights—for example, a 70-year transferable term of use for residential purposes—in land formally deemed “state-owned”. It’s those sub-ownership rights that the state is really taking when it condemns a plot of land, evicts the residents, and tears down the buildings on it.

Urban land takings, like rural takings, have been a source of controversy both in print and on the ground for several years. Often those who are losing their residences – like the famous Chongqing nail household – are unhappy both at having to move and at the amount of compensation offered, and there have been some tragic instances of violence and death (e.g., in Yihuang and in Chengdu) surrounding these takings. But the fact that people feel aggrieved, even monstrously so, doesn’t mean they are necessarily right; in the Chengdu case, for example, it seems pretty clear that the building that was to be torn down was an illegal structure that should never have gone up in the first place. Finally, I should add that in some cases people are happy to have their interests in real estate condemned, and indeed will hurry to build on land they believe will be condemned, because apparently the compensation offered is more than they would get on the market. In any case, I hope this is enough to make the case that takings are a sensitive and complex issue.

The new regulations, effective immediately, should be welcomed by homeowner advocates. They go a long way toward addressing problems in the existing regime. Here are some highlights:

• The regulations define, for the first time, the concept of “public interest” that’s required for a taking to take place. Of course, no definition is ever going to be perfect, but this one at least offers more detail than we had before. After the list of specific examples, there is the usual “and other needs of public interest” clause, but its elasticity is circumscribed by the requirement that such needs be defined by laws (rules issued by the National People’s Congress or its Standing Committee) or administrative regulations (rules issued by the State Council). One problem with the definition is that it includes a concept similar to blight in US takings law as a justification for condemnation. As Prof. Ilya Somin has frequently pointed out in postings on the Volokh Conspiracy blog, “blight” is an easily abused concept – just ask the New Yorkers who recently lost their property so that Columbia University (a private institution the last time I checked) could expand.
• Those expropriated are to receive the market value of what they lost. Of course, calculating the market value of some kinds of properties is going to be very difficult, but at least this establishes the general principle. The rule before now was backward-looking: if you had paid for a 70-year use right and were expropriated after 35 years, then you would in principle get half your money back (presumably after appropriate  adjustments for the time value of money, inflation, etc.). It made no difference if in the meantime right next door someone had built (a) a classy shopping mall or (b) an abbatoir. That has now changed.
• A current problem is that people can be evicted before any final decision has been reached on how much compensation is due and before compensation has actually been paid. The regulations attempt to deal with this by stating that compensation must be paid before people move, and that those dissatisfied with the compensation offered may initiate administrative reconsideration proceedings (these are non-litigious proceedings whereby a bureaucracy reviews its own decision) or administrative litigation in court. The regulations don’t specifically say that all such proceedings must have reached a final conclusion before the taking may proceed, but that may be the intent. Interestingly, the regulations state categorically that violence may not be used to move people out. Given the history of developers using thugs to move recalcitrant people out of their homes, one can understand this rule. But what about cases where people refuse to move even though the project serves a bona fide public interest and fair compensation has been offered? Can a government really give up its right to use force in those circumstances? Shall the determined and thick-skinned really have a veto power? Perhaps it depends on how one defines “violence”.
• Where a taking is planned in order to redevelop a blighted urban area, if over half of those whose property is to be taken believe the compensation is inadequate under the regulations, then a hearing is to be organized and the compensation plan revised “in accordance with the situation of the hearing” (根据听证会情况). This is pretty vague. First, how do you count those whose property is to be taken? Does a family of five in one residence have five times the voice of a single person in another otherwise identical residence? Second, what does “in accordance with the situation of the hearing” mean? I don’t see how this provision adds anything by way of remedies to what’s already in the regulations.

The regulations don’t cover takings of rural land, which are equally—perhaps even more—sensitive and controversial. But the principles they contain may find expression in whatever reforms we end up seeing in the rural takings regime.

Rare earth export quotas in China

Over at the China Law Blog, Steve Dickinson has a very informative post on China's export quota regime for rare earths. I would add one supplementary point and note one wee disagreement.

The wee disagreement: Steve says, "Many foreign commentators have suggested that the rare earths quota system arose by surprise or that the system is a random restriction by the Chinese government as part of some sort of natural resources power play." That wasn't my impression of the commentary surrounding the controversy over the alleged blocking of rare earth exports to Japan last fall. I went back and checked press reports, and really can't find this kind of commentary. The press reports I saw note the existence of the export quota system in a straightforward and non-judgmental way.

Of course, Steve may be referring to commentary I didn't see in my quick search. But in any case, it seems to me that the real controversy has not been over whether China suddenly imposed a quota system in general as over whether the government had, last September, imposed an extra restriction on exports to Japan, and if so, whether this was a way of pressuring Japan over Chinese ship captain it was holding. Press reports quoted various industry executives as saying that a restriction not explainable by the existing quota system seemed to have been imposed; the Chinese government denied it. The Chinese government did not say, "It's the quota system that has caused the sudden cutoff in exports." They denied that there had been any cutoff in exports at all. I don't know if the truth of this matter has been conclusively established one way or the other.

The supplementation: I agree with Steve that the quota system is very problematic under WTO rules. The odd thing to me is that WTO rules make evading this prohibition very easy, because they don't prohibit export taxes, even those set at a prohibitively high level. Thus, by replacing the export quota with an export tax, China could restrict exports to exactly the same degree it does today and make a bit of money for the treasury in the process. I can only assume that there is some obscure reason related to politicking among domestic interest groups that explains China's not doing so.

For more than you ever want to know about export restrictions under the WTO, check out this article from the Herbert Smith LLP web site.

JANUARY 27th UPDATE: An anonymous commenter writes: "You are right - in almost all situations, the GATT permits a government to use a sky-high export tax to block exports, and export taxes are in principle GATT-consistent. However China's accession protocol includes legally binding commitments not to impose export taxes, except for a list of specific products, which do not include rare earths."

This comment is on target and I appreciate it. The relevant text of the Protocol of Accession reads:"China shall eliminate all taxes and charges applied to exports unless specifically provided for in Annex 6 of this Protocol or applied in conformity with the provisions of Article VIII of the GATT 1994." (Article VIII allows modest cost-based fees for services in connection with import and export formalities.)

Zhejiang Province internal police document on controlling the movements of "critical persons"

(Note that "critical" (重点) here means "important" or "key", not "making criticism". But it might be even more misleading to translate the term as "important" persons.)

The China Digital Times has published a translation of a very interesting internal police document from 2010. Here's the first few sentences of what they say about it:

The following document was co-written in March 2010 by the Zhejiang Public Security Bureau and the Zhejiang Department of Public Health as an internal document to detail the process by which certain categories of citizens, including Falun Gong members, petitioners, and “rights defenders”, are monitored and tracked down.

White House still doesn't get Chinese names

OK, I understand. Not everyone can take the time to learn Chinese. And with some romanized Chinese names you can't tell which is the surname and which is the given name. Still, is there any excuse for the White House protocol people, who are professionals, not to know which is which when they are preparing the list of guests for the state dinner in honor of Hu Jintao? This is their job!

Here's the list as published by the White House. With the exception of the President, Mrs. Obama, and Hu Jintao, they are listed in what appears to be intended to be alphabetical order by surname. But the Chinese guests (who presumably supplied their names in Chinese order with the surname first) have been inserted in alphabetical order by given name, so (for example) Minister of Commerce CHEN Deming appears between William DALEY and Jamie DIMON. C'mon, people. This isn't rocket science.

The list:

THE PRESIDENT and MRS. OBAMA

HIS EXCELLENCY HU JINTAO

      The Honorable Madeleine Albright, Washington, D.C.
      Ms. Alice Albright

      Ms. Christiane Amanpour, ABC News, New York, NY
      Mr. James Rubin

      The Honorable David Axelrod, Assistant to the President and Senior Advisor
      Mrs. Susan Axelrod

      Mr. Jeffrey Bader, National Security Council
      Ms. Rohini Talalla

      The Honorable Elizabeth Bagley, Washington, D.C.
      Mr. Kevin Frawley

      Mr. Steven Ballmer, Microsoft, Redmond, WA
      Mrs. Connie Ballmer

      Ms. Bette Bao Lord, New York, NY
      The Honorable Winston Lord

      Mrs. Denise Bauer, Belvedere Tiburon, CA

      The Honorable Howard Berman, Representative from California
      Mrs. Janis Berman
   
      Vice President Joseph R. Biden, Jr.
      Dr. Jill Biden

      The Honorable Joseph Beau Biden, III, Attorney General of Delaware, Wilmington, DE
      Mrs. Hallie Biden

      His Excellency Zheng Bijian, Chairman, CIIDS

      His Excellency Dai Bingguo, State Councilor

      Mr. Lloyd Blankfein, Goldman Sachs, New York, NY
      Mrs. Laura Blankfein

      The Honorable Antony Blinken, Deputy Assistant to the President and National Security Advisor, Office of the Vice President

      The Honorable Stephen Breyer, United States Supreme Court
      Dr. Johanna Breyer

      Mr. Greg Brown, Motorola, Schaumburg, IL
      Mrs. Anna-Louise Brown

      The Honorable Dr. Zbigniew Brezezinski, McLean, VA
      Mrs. Emilie A. Brzezinski

      The Honorable Kurt M. Campbell, Assistant Secretary of State for East Asian and Pacific Affairs
      The Honorable Lael Brainard, Under Secretary of the Treasury for International Affairs

      The Honorable James E. Carter, former President of the United States
      Mrs. Rosalynn Carter

      Mr. Jackie Chan, Beverly Hills, CA
      Mr. Phillip Button

      The Honorable Elaine Chao, Washington, D.C.
      Dr. James Chao

      His Excellency Wang Chao, Vice Minister for Commerce

      His Excellency Tung Chee Hwa, Vice Chairman, CPPCC, former Hong Kong Chief Executive

      Mr. John A. Chen, Chairman, Committee of 100, New York, NY
      Mrs. Sherrie Chen

      The Honorable Chris Christie, Governor of New Jersey, Trenton, NJ
      Mrs. Mary Pat Christie

      The Honorable Judy Chu, Representative from California
      Ms. Chiling Tong

      The Honorable Steven Chu, Secretary of Energy
      Mrs. Jean Chu

      The Honorable Hillary R. Clinton, Secretary of State

      The Honorable William J. Clinton, former President of the United States

      The Honorable James E. Clyburn, Representative from South Carolina
      Mr. John Clyburn

      The Honorable Richard Daley, Mayor of Chicago, Chicago, IL
      Mrs. Maggie Daley

      The Honorable William Daley, Assistant to the President and Chief of Staff
      Ms. Bernadette Keller

      His Excellency Chen Deming, Minister of Commerce

      Mr. Jamie Dimon, JP Morgan Chase & Co., New York, NY
      Mrs. Judith Dimon

      The Honorable Thomas Donilon, Assistant to the President and National Security Advisor
      Ms. Cathy Russell, Chief of Staff to Dr. Jill Biden

      The Honorable Arne Duncan, Secretary of Education
      Mrs. Karen Duncan

      Mr. James Fallows, The Atlantic, Washington, D.C.
      Mrs. Deborah Fallows

      Mr. Xie Feng, Director General, MFA

      Mr. Thomas Friedman, The New York Times, Washington, D.C.
      Mrs. Ann Friedman

      The Honorable Michael B. Froman, Deputy Assistant to the President and Deputy National Security Advisor for International Economic Affairs
      Ms. Nancy Goodman

      His Excellency Wan Gang, Minister of Science and Technology

      The Honorable Robert M. Gates, Secretary of Defense
      Mrs. Becky Gates

      The Honorable Timothy F. Geithner, Secretary of the Treasury
      Mrs. Carole Geithner

      Mr. Mark Gilbert, Boca Raton, FL
      Mrs. Nancy Gilbert

      The Honorable Chris Gregoire, Governor of Washington, Olympia, WA
      Ms. Courtney Gregoire

      His Excellency Zhu Guangyao, Vice Minister for Finance

      His Excellency Zhang Guobao, Vice Minister for NDRC

      Mr. Herbie Hancock, Los Angeles, CA
      Mrs. GiGi Hancock

      The Honorable Dr. John P. Holdren, Assistant to the President and Director of the Office of Science and Technology

      The Honorable Robert Hormats, Under Secretary of State for Economic, Business, and Agricultural Affairs

      The Honorable Steny Hoyer, Representative from Maryland, Democratic WHIP

      His Excellency Wang Huning, Director of the Policy Research Office of CCCPC

      The Honorable Jon Huntsman, U.S. Ambassador to China
      Mrs. Mary Kaye Huntsman

      Mr. Robert Iger, The Walt Disney Company, Burbank, CA
      Ms. Willow Bay

      Mr. David Ignatius, The Washington Post, Washington, D.C.
      Dr. Eve Ignatius

      Mr. Jeff Immelt, General Electric, Fairfield, CT
      Mrs. Andrea Immelt

      The Honorable Valerie Jarrett, Senior Advisor and Assistant to the President for Intergovernmental Affairs and Public Engagement

      His Excellency Li Jiaxiang, Vice Minister for Transportation

      His Excellency Yang Jiechi, Minister of Foreign Affairs

      His Excellency Ling Jihua, Director of the General Office of CCCPC

      Mr. Robert Kagan, McLean, VA
      Ms. Victoria Nuland

      Mr. Michael Kempner, East Rutherford, NJ
      Mrs. Jacqueline Kempner

      Mr. Muhtar Kent, Coca-Cola, Atlanta, GA

      The Honorable John F. Kerry, Senator from Massachusetts
      Mrs. Teresa Heinz Kerry

      Mr. Robert King, UAW, Detroit, MI
      Ms. Julie Kushner

      The Honorable Ron Kirk, United States Trade Representative
      Mrs. Matrice Ellis-Kirk

      The Honorable Henry Kissinger, New York, NY
      Mrs. Nancy Kissinger

      Mr. Nicholas Kristof, The New York Times, Scarsdale, NY
      Ms. Sheryl WuDunn

      Ms. Ellen Kullman, DuPont, Wilmington, DE
      Mr. Michael Kullman

      Dr. Zhang Kunsheng, Director-General, Protocol Department

      Ms. Michelle Kwan, Torrance, CA

      Mr. Lang Lang, New York, NY
      Mrs. Zhou Xiulan

      The Honorable Jacob Lew, Deputy Secretary of State for Management and Resources

      Ms. Maya Lin, New York, NY
      Mr. Daniel Wolf

      Ms. Limin Liu, Reno, NV
      Dr. Hugh Shapiro

      Mr. Andrew N. Liveris, The Dow Chemical Company, Midland, MI
      Mrs. Paula Liveris

      The Honorable Gary Locke, Secretary of Commerce
      Mrs. Mona Locke

      The Honorable Christopher Lu, Assistant to the President and Cabinet Secretary
      Ms. Kathryn Thomson

      The Honorable Richard Lugar, Senator from Indiana
      Mrs. Charlene Lugar

      Mr. Yo Yo Ma, Burbank, CA
      Ms. Jill Hornor

      The Honorable Capricia Marshall, Chief of Protocol, Department of State

      Mr. W. James McNerney, The Boeing Company, Chicago, IL
      Mrs. Haity McNerney

      Mr. Evan Medeiros, Director for Asian Affairs, NSS

      His Excellency Jiang Mianheng, Vice Chairman, CAS

      Mr. Mel Monzack, Wilmington, DE
      Mrs. Ann Monzack

      Admiral Michael G. Mullen, Chairman of the Joint Chiefs of Staff

      Mrs. Wendi Deng Murdoch, New York, NY

      Mr. James Murren, Las Vegas, NV
      Mrs. Heather Murren

      The Honorable Thomas Nides, Deputy Secretary of State for Management and Resources
      Ms. Virginia Moseley

      Mr. Paul Otellini, Intel, Santa Clara, CA
      Mrs. Sandy Otellini

      The Honorable Nancy Pelosi, Representative from California, Democratic Leader
      Mr. Paul Pelosi

      His Excellency Zhang Ping, Minister of NDRC

      The Honorable David Plouffe, Assistant to the President and Senior Advisor
      Ms. Olivia Morgan

      Mr. Tom Pritzker, Pritzker Organization, Chicago, IL
      Mrs. Margot Pritzker

      His Excellency Wang Qishan, Vice Premier of the State Council

      Ms. Jean Quan, Mayor of Oakland, CA
      The Honorable Edwin M. Lee, Mayor of San Francisco, CA

      Ms. Azita Raji, JP Morgan Securities, Inc., Belvedere, CA
      Mr. Gary Syman

      The Honorable Ben Rhodes, Deputy Assistant to the President and Deputy National Security Advisor for Strategic Communications and Speechwriting
      Ms. Ann Norris

      The Honorable Susan Rice, United States Ambassador to the United Nations, New York, NY
      Mr. Ian Cameron

      Mr. Robert Roche, Shanghai, CN

      Mr. Kenneth Roth, The Human Rights Watch, Washington, D.C.
      Ms. Annie Sparrow

      The Honorable Pete Rouse, Counselor to the President
      Ms. Courtney Chapin

      Mr. David M. Rubenstein, The Carlyle Group, Washington, D.C.
      Mrs. Alice Rubenstein

      Mr. Kirk Rudy, Austin, TX
      Mrs. Amy Rudy

      The Honorable Brent Scowcroft, The Forum for International Policy, Washington, D.C.

      The Honorable Kathleen Sebelius, Secretary of Health and Human Services
      The Honorable Gary Sebelius

      The Honorable Susan Sher, Assistant to the President and Chief of Staff to the First Lady
      The Honorable Neil Cohen

      Mr. Robert Sherman, Boston, MA
      Ms. Kim S. Sawyer

      His Excellency Chen Shiju, Chief of the President’s Office

      The Honorable George Shultz, Stanford, CA
      Mrs. Charlotte Shultz

      Dr. Patrick Soon-Shiong, Culver City, CA
      The Honorable Phil Gordon, Mayor of Phoenix, Phoenix, AZ

      The Honorable Gene Sperling, Assistant to the President for Economic Policy & Director of the National Economic Council
      Ms. Allison Abner

      The Honorable Jim Steinberg, Deputy Secretary of State
      Ms. Sherburne B. Abbott

      Ms. Barbra Streisand, Malibu, CA
      Mr. James Brolin

      The Honorable Tina Tchen, Deputy Assistant to the President and Director of the Office of Public Engagement

      Mr. John Thornton, The Brookings Institution, HSBC North America, Palm Beach, FL
      Mrs. Margaret Thornton

      His Excellency Cui Tiankai, Vice Minister of Foreign Affairs

      Dr. Stanley Toy, Jr., Pasadena, CA
      Ms. Lana Toy

      Mr. Luis Ubinas, The Ford Foundation, New York, NY
      Dr. Deborah Tolman

      Mr. Jose Villarreal, Commissioner General, Shanghai Expo, San Antonio, TX
      Ms. Sara Villarreal

      Ms. Vera Wang, New York, NY
      Mr. Arthur Becker

      Mr. Steve Westly, Menlo Park, CA
      Ms. Anita Yu

      Ms. Anna Wintour, Vogue Magazine, New York, NY
      Mr. Shelby Bryan

      Ms. Patricia A. Woertz, Archer Daniels Midland, Decatur, IL
      Mr. Kelvin R. Westbrook

      Mr. B.D. Wong, New York, NY
      Mrs. Roberta Wong

      Mr. Charles Woo, Mega Toys, Los Angeles, CA
      Mrs. Ying Woo

      The Honorable David Wu, Representative from Oregon
      Ms. Anna Kopperud

      His Excellency Xie Xuren, Minister of Finance

      His Excellency Zhang Yesui, Chinese Ambassador to the United States
      Madam Chen Naiqing

      His Excellency Sun Yibiao, Vice Minister for Customs

Trying to visit Chen Guangcheng

Here's an interesting account of an attempt by Chen Yunfei, a Chengdu-based rights activist, to visit Chen Guangcheng, the blind rights activist who is supposedly out of jail and a free man. Pretty brave, considering that the most recent person to try to visit Chen, He Peirong, seems to have disappeared (same source). Thanks to blogger Siweiluozi for the translation.

Beijing police experiment with new case registration system

Here's an interesting experiment: effective March 1, 2011, people bringing a case to the police will be able to register it on line, track its progress, and evaluate the performance of the officer in charge. A problem with the current system (and if you've seen The Wire, you'll guess it's probably not unique to China) is that police officers are evaluated by their rate of case closings. This means they have an incentive not to take cases that will be tough to solve. As a result, your complaint may go unheard. The new system is supposed to solve that problem: the case can get registered on line before it is officially accepted (立案), so parties at least have something they can point to as they pester the police to take action.

Naturally, having heard many, many stories of police reforms that go nowhere, hotlines that ring unanswered, and ombudsmen who beat up complainants, I'm a little cynical about whether this will really amount to anything. Among other things, the system apparently still requires a formal police acknowledgment that the case exists at some level in order to get it into the on-line database. Thus, you're still stuck if the police just fold their arms and do nothing. Still, it's an interesting idea that's worth watching.