New PRC Rules on Evictions and Compensation – Enforcement Will Be Key

2010-01-30

This story hit my Inbox yesterday, first with news that the new eviction rules would be forthcoming. Several major papers (foreign and domestic) reported on the new development. Here's a basic description from The Guardian:

The draft rules, issued today by the state council ‑ China's cabinet ‑ would ban developers and demolition crews from forcing people out through violence or by shutting off water and electricity. They would also demand that compensation be set at market price and that where homes are judged "old and dangerous", 90% of residents would have to agree to projects. Demolitions would be halted if occupants brought lawsuits. At present, they can go ahead even when challenged.

Most China watchers are already aware of how important, and sensitive, this issue is in terms of politics and social stability. Each year there are tens of thousands of episodes of unrest in the PRC, from your basic peaceful protests to full-blown riots involving lots of folks. The top two reasons why this happens relate to land ownership/compensation and environment/pollution.

When people are either thrown off their land or given inadequate compensation, this does not have a huge effect on the economy. Neither does it result in millions of people becoming homeless. This is not primarily an economic issue, but rather a sociopolitical one.

Evictions of this nature, particularly when the situation pits a poor tenant and a rich developer, are incredibly symbolic. The phenomenon highlights the imbalances in the economy, the ever-widening income gap, and the shortcomings of China's ongoing economic development. In short, improper evictions are an embarrassment for a government that has historically promised to uphold socialist principles.
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