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China to beef up property rights protection

Xu Wei
Updated: Nov 22,2017 9:52 PM

China will step up protection of property rights to provide sustained impetus for economic development, according to a decision made at the State Council executive meeting chaired by Premier Li Keqiang on Nov 22.

Businesses will enjoy better protection of their operational and property rights, and private businesses will enjoy equal protection for their property rights as their counterparts in the public sector. Economic crimes will be handled in compliance with related procedures. The protection of citizens’ property rights will also be enhanced.

In his report to the 19th National Congress of the Communist Party of China, General Secretary Xi Jinping said that in the economic reforms, we must concentrate on improving the property rights system and ensuring the market-oriented allocation of factors of production, so that property rights act as effective incentives, and we should ensure the free flow of factors, flexible prices, fair and orderly competition, and that business survival is determined by competition.

In his Government Work Report delivered earlier this year, Premier Li Keqiang said that protecting property rights means protecting labor, invention and innovation, and protecting and developing productive forces. We will work faster to improve the property rights protection system and protect the property rights of economic entities under all forms of ownership and the property rights of citizens in accordance with law, he said.

China’s Property Rights Law was promulgated in 2007, widely seen as a landmark for better protection of property rights in the country. The Central Committee of the Communist Party of China and the State Council issued a guideline on improving the property rights protection system and protecting property rights according to law in November 2016, which was an overall plan for the development of the property rights protection system in China.

According to the decision at the meeting, regulations and documents that are both contradictory to the law and go against the protection of property rights protection will be cleared, revised or abolished as part of efforts to ensure that private businesses will enjoy equal protection as their counterparts in the public sector. The government will ensure that administration will be in line with the rule of law, and wayward and arbitrary law enforcement will be strictly prevented.

Government oversight over environmental protection and workplace safety must be conducted through lawful means, and no arbitrary measures, not to mention illegal methods, should be employed to restrict business production and operation.

“Enhancing the protection of intellectual property rights is a matter of overall strategic significance, and it is vitally important for the development of a socialist market economy. Our efforts in property rights protection in recent years, the mass entrepreneurship and innovation initiative and the government function reform to streamline administration and provide better services have all worked to unleash the vitality of enterprises and spurred economic development,” Premier Li said.

To protect intellectual property rights, the government plans to explore establishing a compensation mechanism as a form of penalty for property rights violations. The government will also step up law enforcement and judicial protection to increase the cost of infringements and reduce the cost of rights protection, Wednesday’s meeting decided.

IPR law enforcement in key areas, including the internet, exports and imports will be reinforced, as well as in rural and urban areas where counterfeiting is rampant.

A record of government neglect of its duties will be established to better hold the government to account, and the redress and punishment mechanism for government negligence will be improved.

The government will also establish complaint filing and compensation mechanisms for businesses who suffer losses in property rights due to government misconduct.

“There are still quite a few problems with the current property rights protection system. Deficiency in this area holds back increased investment, and hence is a main cause for the slide in private investment,” Premier Li said. “Entrepreneurs should be given a confidence boost through the speedy conclusion of a number of key pending infringement cases.”

Premier Li emphasized, “The wider opening-up of the country calls for enhancing IPR protection. All related laws and measures must be fully implemented, the problem of violators getting away with IPR infringements must be tackled to dispel any public concerns.”