Bulldozing Homes to Build Shopping Malls: The Chinese Takings Law Revisited from a Comparative Perspective Chenglin Liu

1. Bulldozing Homes to Build Shopping Malls: The Chinese Takings Law Revisited from a Comparative Perspective Chenglin Liu LL.M (China), LL.M (Sweden), LL.M, MS, JSD (U.S.) University of Houston Law Center September 23, 2006 Boulder, Colorado

2. Eminent Domain • Eminent Domain is the power of the sovereign to take property for “public use” without owner’s consent. • Holdout problem • The Takings Law: No private property shall be taken for public use without just compensation • Article 13 of the Constitution of China (2004): The lawful private property of citizens may not be encroached upon. By law, the state protects citizens’ rights to own private property and the rights to inherit private property. The state may, for the public interest, expropriate or take over citizens’ private property for public use, and pay compensation in accordance with law. • Three elements of takings law: • Public Use • Compensation • Due process

3. Transformation of Urban Housing Ownership:private, public and private again • Prior to 1949: Private Ownership (land and housing) • 1950-1990: Public Ownership (land and housing ) • 1990-present: • Apartments are owned by private owners. • Land beneath apartments is owned by the government. • Private owners can purchase land use rights for 70 years.

5. Property rule, liability rule and transaction costs AC, TC $ AC (Administrative costs for enforcing eminent domain, or called “due process costs.”) Number of Sellers Thin Market X Thick Market

6. AC, TC $ AC (Administrative costs for enforcing eminent domain, or called “due process costs.”) Number of Sellers Thin Market X1 Thick Market

7. AC, TC $ AC (Administrative costs for enforcing eminent domain, or called “due process costs.”) Number of Sellers Thin Market X2 Thick Market

8. AC, TC $ AC (Administrative costs for enforcing eminent domain, or called “due process costs.”) Number of Sellers Thin Market X3 Thick Market

9. AC, TC $ AC (Administrative costs for enforcing eminent domain, or called “due process costs.”) Number of Sellers Thin Market X3 Thick Market

10. Singapore The “Takings Clause” was deleted from the Singaporean Constitution in 1965 • No person shall be deprived of property save in accordance with the law; • No law shall provide for the compulsory acquisition or use of property without adequate compensation. Mr. Lee made his view unequivocally: We have specifically set out to exclude [Article 13]…Once we spell out that no law shall provide for the compulsory acquisition or use of property without adequate compensation, we open the door for litigation and ultimately for adjudication by the Court on what is or is not adequate compensation.

11. Administrative Costs Compared 1

12. United States China or Singapore P P TC TC AC in U.S. AC in China or Singapore Q Q TNM TKM TNM TKM TNM: thin market; TKM: thick market Gray triangles: government power of eminent domain Administrative Costs Compared 2

13. Progress and Challenges • Progress • From Lawless deprivation to Constitutional Guarantee • From Confiscation to Takings with Compensation • Challenges • Public Use • Compensation • Due Process