China in Transition
Constitutional Amendments to Promote Private Businesses
- The contradiction between the economic and political systems remains unsolved
Chi Hung KWAN
Consulting Fellow, RIETI
China's Constitution, which was adopted in 1982, underwent a fourth round of amendments at the Second Session of the 10th National People's Congress that drew to a close on March 14. As was the case with the previous three times (1988, 1993 and 1999), the latest amendments offered progress in matters directly relevant to economic activity such as the promotion of the private-sector economy and protection of private property, but on the other hand failed again to present a clear vision of political reform.
The first aim of the latest set of constitutional amendments was the abolition of discrimination against the non-state-owned sector of the economy, with regard, especially, to improving the social status of private businesses (and entrepreneurs). Under the old constitution, the non-state-owned sector of the economy was subject to guidance, supervision and administration by the government, but following these latest amendments, the state now encourages, supports and guides its development, exercising supervision and administration over it in accordance with the law. In addition, entrepreneurs and individual owners of private firms are recognized as "builders of the socialist cause" and social prejudices against them are to be fundamentally corrected. Up until now, the private sector of the economy had experienced discriminations in such areas as finance, taxation and import and export trade, so these amendments will no doubt serve to greatly boost its development.
In order to further encourage the development of private enterprises, the latest amendments strengthen the protection of a citizen's lawful private property. Specifically, the amendments include such wording as "the lawful private property of citizens shall not be encroached upon," "the state protects by law the right of citizens to own and inherit private property" and "the state may in the public interest expropriate or take over the private property of citizens and pay compensation in accordance with the law." Under the old constitution, when it came to the issue of protecting property, priority was placed on ownership of property aimed at maintaining citizens' livelihoods, and protection of property employed for production was not clearly stipulated. Owing to this, some private investors were concerned that their assets were not sufficiently guaranteed and in many cases avoided expanding their investments or business operations, withdrew after gaining a certain amount of profit or immediately spent the money they made. In some cases, investors placed some of their funds into overseas havens. In order to prevent this, the scope of protection given to private property was expanded under the latest constitutional amendments so that not only income for one's livelihood but also income from production and lawful income gained outside of labor income have now been included.
But compared to the active stance taken toward economic reform, Chinese authorities remain passive when it comes to political reform. Under the latest constitutional amendments, "the important thought of Three Represents" advocated by former President Jiang Zemin has been held as one of China's guiding principles along with Marxism-Leninism, Mao Zedong Thought and Deng Xiaoping Theory. As a result, the Chinese Communist Party formally adjusted itself from being a class party that represents the proletariat to a party that represents "advanced productive forces," "an advanced culture" and "the fundamental interests of the overwhelming majority of the Chinese people." Based on the "Three Represents Theory," entrepreneurs (in other words, capitalists), who represent "advanced productive forces," have already been allowed to join the Communist Party.
As this shows, the "Three Represents Theory" goes beyond Deng Xioaping Theory in denying Marxism-Leninism and Mao Zedong Thought, which both advocated class struggle, and it is impossible to guide China's development by upholding all of these ideologies. Furthermore, even under the amended Constitution, there is no change whatsoever to the single-party dictatorship by the Communist Party and elements of democracy such as elections and competition among political parties remain excluded. However, China can no longer avoid treading the path of political reform. If one is to follow Marx's theory, then the changes in China's economic structure will no doubt trigger change in the superstructure - politics. When this happens, it will not do to merely amend the present constitution, but it will become necessary to draft an entirely new one.
- Related articles
- "Three Represents Theory" aims for "Peaceful evolution," China in Transition, August 23, 2002
- Chinese Private Companies Demanding National Treatment At Home, China in Transition, August 2, 2002
March 15, 2004
Article(s) by this author
October 10, 2019［China in Transition］
September 19, 2019［China in Transition］
U.S.-China Trade Friction Casting a Shadow over the Chinese Economy—Impact on the supply side becoming a matter of concern
April 2, 2019［China in Transition］
December 4, 2018［China in Transition］
Chinese Economy Slowing Down amid Intensifying U.S.-China Trade Dispute: Reform and opening-up should come before economic stimulus
October 19, 2018［China in Transition］