China's great leap forward on property

But the law is clearly not limited to the houses and cars that Chinese city-dwellers regard as necessities, in the same light as their parents once viewed wristwatches, bicycles, and sewing machines. Protection of private property extends to the "means of production" – a recognition of reality in a country where private enterprise now accounts for nearly two-thirds of GDP.

It does not, however, extend to agricultural land, which remains collectively owned by peasant villages and not immune to seizures by developers, which have provoked thousands of sometimes violent protests in recent years.

Denying farmers the right to own their land, argues one European diplomat, "is a great missed opportunity and a demonstration of [President] Hu Jintao's lack of courage."

The law leaves the current system, whereby farmers rent their land for 30-year periods, untouched. Peasants can sublet their assigned land to neighbors, but may not sell it nor borrow against it on a mortgage so as to invest in machinery or other equipment. Reforming that system was clearly too radical a prospect for a cautious government that had enough trouble with the law as it was.

In putting their free-market reformist right foot forward, the authorities had to dress their move up in a good deal of leftist language about "improving the Chinese-style socialist property system" and how "the State-owned economic sector is the leading force" so as to placate opponents of the Property Law.

In its careful shuffle along the reformist path, the government is also putting its left foot forward at this NPC, promising more spending on education and healthcare, and major legislation in the coming months to strengthen labor rights and social-security protection.

Brandishing his goal of a "harmonious society" beset by less of the envy and social conflict that scars today's China, President Hu seems guided more than anything else by the search for "the proper balance between the need for further and deeper economic reforms and at the same time the need to go much further in terms of social protection" says the Western diplomat.

Even though he does not agree with them, Mr. Li welcomes the law's opponents as "an important counterbalance to power in China.

"The result of their opposition could be seen as a warning to the government that in the future it should pay more attention to social fairness and less to economic efficiency," he says.

While the law's drafters say in private they were disappointed to have been obliged to amend their original proposals for political reasons, and critics say they regret not having been able to block the law, "improvements always come step by step," Li adds.

"It was a compromise" he says. "But history advances by compromise."

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