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Vanderbilt Journal of Transnational Law

First Page

479

Abstract

This Article analyzes the legal and economic effects of privatization and the changing patterns of ownership rights in the People's Republic of China. After an overview of Chinese concepts of property rights, the authors discuss the history of China's post-liberation nationalization process and the movement back toward privatization and decentralization. Privatization has led Chinese law toward the recognition of private rights and duties in property law matters. The authors examine China's basis for altering ownership rights and moving in the direction of a market-oriented economy. The Constitution of the People's Republic of China and Chinese statutes contain specific language delineating domestic ownership rights and protection of foreign investment in China. Despite China's expanding constitutional and statutory protection of private property ownership rights, the authors state that the Chinese legal system still lacks international and domestic credibility.

The authors evaluate the socioeconomic impact of the rapid emergence of private ownership in China. For the average Chinese citizen, the authors believe the expansion of property rights and freedom of choice has brought forth insecurity, uncertainty, unfamiliar financial burdens, inflation, a relative abundance of consumer goods, and broad questions concerning the future of Chinese socialism, socialist ideals, and the usefulness of supporting collective action in Chinese society. The authors compare similar privatization practices in Chile and the Soviet Union to contrast these states' economic growth rates and experiences with those in China. The authors also assess the results of China's experiment with ownership rights, using comparative lessons from Chile and the Soviet Union as the basis for predicting the outcome of China's effort at transformation. The authors conclude that China will be compelled, perhaps through the threat of social unrest caused by growing income inequality and loss of social welfare benefits, to move more slowly towards privatization and freer markets.

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