Paradox of Chinese property rights

Abstract

China’s growth since 1978 has been among the longest sustained periods of high growth in modern history. It has puzzled academic world how china maintain economic boom without a well functioning legal system. Property rights have been considered as the key issue for China’s economical growth. Property right, however, is intrinsically linked to the issues of national politics, economics, cultures, legal system and ideologies. A property is given meaning and value by the society that creates and subsequently interprets it. In traditional China, the interests of the individual were subordinate to those of the collective. It is a culture that emphasizes collective interests over individual identity. The interests of the extended family took precedence over those of each individual member, while the state’s relation to society viewed as an extension of the collective dynamic of the family. The role ascribed to private property rights was heavy control and heavy exactions by the holders of political power. The fate of individual property rights was closely tied to the political power. I tried to argue that property rights are desirable and important more for political reasons than economic ones. I do not deny that effective property rights over the past three decades might have allowed China to achieved higher levels of development. I do not believe, however, that they would have led to faster economic growth. Indeed, I argued strong protection of property rights for individual would likely have slowed China’s economic growth.