In recent years, urban development and renovation of old city areas have speeded up. In the process, a lot of urban and suburban residents are being resettled.

Despite improving public facilities and the city's image, complaints and protests from residents being relocated have escalated. In some extreme cases, people have even committed suicide to protest the relocation.

Top construction officials have noticed the problem and pointed out recently that improper compensation for resettled residents is a major reason leading to the conflict, and also some tragedies.

Apart from the improper compensation for residents, however, there is the trampling of their property rights.

Legally speaking, people holding property rights are entitled to make use of those rights as they see fit. Residents can choose to sell their property rights to developers for a reasonable price, or they can refuse to move, even if that may delay the development project.

The process for residents and real estate developers to negotiate for a reasonable price should be a private transaction in the legal sense.

But in contemporary China, the process is often interfered with by local governments, which take back the land-use rights of residents at a set price and then sell those rights to real estate developers.

According to the Chinese Constitution, all urban land belongs to the State, and all rural land belongs to rural collectives. The constitutional stipulation often becomes an excuse for local governments to take over land-use rights from residents.

However, the State ownership of land cannot authorize local governments to take such action, because once endowing residents with ownership of their housing, the State has granted residents the rights to use the land beneath their homes.

During the period in which residents legally claim land-use rights, generally 70 years, they enjoy the right to control the use of that land. Residents cannot be deprived of these rights, even by local governments.

According to the China Land Law, the government cannot expropriate residents' land-use rights except for public welfare projects, such as building roads or schools.

But the reality is that the government often takes back the land-use rights and sells it to real estate developers to build commercial departments.

The government's involvement in urban relocation leaves residents unable to negotiate with developers to sell their properties or refusal to move.

For example, residents living near Beijing's downtown Financial Street are compensated with 8,000 yuan (US$960) per square metre for their one-storey dwellings. But in place of the previous dwelling, 20-storey luxury apartments will be erected. The luxury high-rises will be sold with an average price of more than 10,000 yuan (US$1,200) per square metre.

The compensation money most resettled residents receive can only enable them to buy a suburban apartment.

Of course, a large number of urban residents do not have property rights on the housing where they live due to historic reasons, but their cases can be solved by referring to property owners. Because if the rights of private housing owners during urban relocation cannot be properly solved, those without housing ownership would have even more difficulty protecting their interests.

The disparagement of residents' property rights is also embodied in the fact that when urban development plans are drafted, the housing ownership and land-use rights of residents have not been considered.

What urban planners consider is just whether an area is suitable to develop certain projects, but never the possibility that residents can make use of their legal right not to move.

In addition, some developers resort to intimidation and harassment to force the residents to accept their compensation offers and move to other areas.

Some developers offer various types of compensation to the local governments, or even bribes to certain officials. Such actions have caused numerous scandals.

In that situation, it is quite natural that residents being relocated come into conflict with real estate developers and even local government staff. The conflicts have threatened social stability.

Trampling residents' property rights is a very harmful trend. In this case, the government's image concerning the protection of property rights, a basic component for the rule of law and a market-based economy, has been defiled.

Culturally, many valuable historic heritage sites and old houses have been demolished, because their owners cannot protect them from bulldozers.

Economically, forcible relocation deprives chances for poorer citizens -- especially since most residents who are to be relocated during urban development would be likely to become richer through their properties transactions through commercial channels. As a result, the consumption line is in danger of being broken down.

If developers and governments fully respect the property rights of those relocated residents, and equally negotiate with them for a fair price, there will be much fewer protests and conflicts during urban development and relocation.

The market-based deal on residents' property rights will also reduce government involvement and hence the possibility of corruption on the part of government officials.

On the other hand, the transactions will increase the cost to demolish those historic buildings often in downtown areas and, therefore, more of these old houses can be protected.

Of course, the proper compensation on private properties will slow the process of China's city development and increase its costs.

But it is worthwhile because a fair society should always prioritize the protection of property rights, and the higher costs to develop new developments are in fact increasing the wealth of average residents through more reasonable compensation.

(China Daily September 30, 2003)