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22 St. John's J. Legal Comment. 805 (2007-2008)
Enter the Dragon's Lair: The New Socialism and Private Property Ownership in the People's Republic of China

handle is hein.journals/sjjlc22 and id is 811 raw text is: ENTER THE DRAGON'S LAIR: THE NEW
SOCIALISM AND PRIVATE PROPERTY
OWNERSHIP IN THE PEOPLE'S REPUBLIC
OF CHINA
MICHAEL T. STANCZYK*
In making the transition from a socialist command economy to
a market driven capitalist economy, the main focus is the
privatization of property.' In order to foster a healthy, robust
market system, secure private property rights are a necessity.2
The People's Republic of China (PRC) has recently passed an
amendment to its constitution granting, for the first time,
individuals the right to own property.3
* J.D., June 2007, St. John's University School of Law; B.A. Economics and Political
Science, University of Rochester.
1 See Janos Kornai, What the Change of System from Socialism to Capitalism Does
and Does Not Mean, 14 J. ECON. PERSP. 27, 32 (2000) (stating that a successful transition
to capitalism requires providing constitutional protections for private property and the
promotion of privatization); see also Akos R6na-Tas, The First Shall Be Last?
Entrepreneurship and Communist Cadres in the Transition from Socialism, 100 AM. J.
SOC. 40, 40 (1994) (explaining that the change from socialism to capitalism requires
profound change[s] in property relations).
2 See Jonas Alsen, An Introduction to Chinese Property Law, 20 MD. J. INT'L L. &
TRADE 1, 3 (A well-functioning property rights system is vital for a market economy.
Without a credible legal system that protects ownership rights and provides stable legal
rules, people will be less inclined to invest in long-term projects when return on the
investment might take many years. To sustain growth and prosperity, property rights
require the protection of fair and stable laws. In a market economy, it is the task of the
government to provide this security.); see also Chenglin Liu, Informal Rules, Transaction
Costs, and the Failure of the Takings Law in China, 29 HASTINGS INT'L & COMP. L. REV.
1, 6 (2005) (For developing economies, the implication of the NIE [New Institutional
Economics] theory is that the first step to economic growth is to establish a well-defined
and enforceable property rights framework. During this process, developing economies
must be fully aware that while formal rules on property rights are relatively easy to
establish (chiefly through legal transplantation), informal norms that create indirect
property rights protections are not.).
3 This paper was written before the passage of the new property rights law and
examines China's property system prior to its enactment. This paper will not provide an
analysis of the new property rights law. It is too early to witness the full effect the law
may have. This paper concerns itself with the conditions in China that necessitated the
passage of the law and some problems in the China's property system that the law may
possibly rectify in the future. See China's New Revolution, ECONOMIST, March 10, 2007,
which describes how the new law was passed and that it is deemed a great symbolic

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