asiaweek: AN IDEOLOGICAL MILESTONE

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Subject: asiaweek: AN IDEOLOGICAL MILESTONE Beijing gives its blessing to

private property 
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AN IDEOLOGICAL MILESTONE
Beijing gives its blessing to private property

SINCE THE PIVOTAL 15TH Congress of the Communist Party in 1997, China's
leaders
have been working on amending the national Constitution. Last week, the
standing committee of the National People's Congress (NPC) approved half a
dozen key changes, and ratification is assured when the full legislature meets
in March. The amendments, which contain major departures from communist
orthodoxy, seek to boost the increasingly important role of private enterprise
in China's slowing economy. 
In the charter's preamble, Deng Xiaoping Theory is now formally enshrined,
alongside Marxism-Leninism and Mao Thought, as the state's guiding principles.
Deng's stress on building "socialism with Chinese characteristics," which
permits private businesses to co-exist with the public sector, is to be the
vanguard for China's economic development. And "private enterprises" are
formally recognized as an "important part" of the economy, not merely a
"supplement" to it. Another amendment requires the government to "rule the
country by law," the first-ever such reference in the Constitution. 
Practical effects of the revisions are expected to be felt soon. Private
businesses will likely enjoy better access to credit from the big state-owned
commercial banks, which have long been biased toward money-losing public
enterprises. There were only 60 entrepreneurs among the thousands of delegates
to last year's NPC, but they loudly denounced such barriers to growth and
demanded greater protection for their business activities. 
Authorities have reason to be sympathetic. China has 960,000 private
enterprises, which employ 13.5 million workers and account for 15% of the
national economy. With the troubled state sector undergoing extensive overhaul
in a tough year, private businesses will need to provide more jobs. "The
growing army of laid-off workers demands an expansion of the private economy,"
says Zhong Pengrong, director of the Beijing Prospect Consultancy, an advocate
of private enterprise. 
Though the new charter continues to acknowledge the "dominant" role of public
ownership, the changes subtly undermine the communist nature of the regime by
legitimizing private property, which includes housing. Some orthodox Marxists

insist the amendments are unnecessary. They hurt the public sector, says
leftist writer Duan Ruofei, who believes the existing charter sufficiently
protects private property. But, in the pragmatic spirit of Deng Xiaoping, the
party leadership seems to have decided that economic progress is more
important
than ideological purity. 
- By Todd Crowell and David Hsieh/Beijing