The General Office of the Central Committee of the Communist Party of China (CPC) and the General Office of the State Council, China's cabinet, recently issued a guideline on the reform of the property rights system for natural resource assets. The reform aims to establish a management framework featuring clear ownership, clarified rights and responsibilities, strict protection, smooth transfer and effective supervision by 2020.

According to the document, the system should serve an essential role in protecting natural resources and promoting ecological functions. In addition, it will play a key part in optimizing resource allocation, raising the efficiency of resource development and use, and pushing forward high-quality development.

Under the current system, natural resources are owned by the state and various collectives, while different types of natural resources are managed by different government departments. This results in a serious problem where the property rights of different types of natural resources, like mountains, rivers, lakes, cultivated land, forests and grasslands, are separated from each other and fail to form an integral whole. Moreover, since different natural resources are overseen by different departments, there is a management overlap.

Rights and responsibilities

Yan Jinming, a professor at Renmin University of China, told Economic Daily that the property rights system, particularly the confirmation of property rights, is the crucial foundation for the management of natural resources.

However, problems such as ambiguous policies, as well as defective management and supervision have caused frequent disputes regarding property rights, ineffective protection and extensive use of natural resources, including grave ecological degradation, Yan said.

Zhu Daolin, a professor with the College of Land Science and Technology at China Agricultural University, said the government didn't pay enough attention to the establishment of an effective property rights system for natural resource assets, adding that the record of China's stock of natural resources is incomplete. Since the benefits to exploit and responsibilities to restore natural resources do not correspond, there have been persistent incidents of destructive development and excessive exploitation of natural resources.

To address these issues, the Third Plenary Session of the 18th CPC Central Committee decided in 2013 to improve the property rights system for natural resource assets. Subsequently, the CPC Central Committee and the State Council formulated a plan on institutional reform for ecological progress in 2015, giving top priority to the improvement of the property rights system for natural resource assets among eight major tasks to advance overall reform.

During the institutional restructuring of the State Council in 2018, the Ministry of Natural Resources (MNR) was established to coordinate the administration of mountains, rivers, forests, cultivated land, lakes and grasslands, take responsibility as the owner of state-owned natural resources, manage the use of territorial space, and protect and restore the ecosystem.

Ownership confirmation

Zhu explained that unlike products of labor, it is sometimes difficult to define the owner of a certain natural resource. Therefore, clearly defined ownership is essential to the reform of the property rights system natural resource assets.

The guideline proposes to separate the ownership of and the right to use natural resources, accelerate the establishment of an ownership system characterized by appropriate classification, balance the relationship between the ownership and the right to use, and innovate the way of exercising the state and collective ownerships of natural resources.

Yan said improving the ownership system is a priority of the reform, which will address problems such as overlapping functions of different entities in managing natural resources and the deficiency of rights and responsibilities.

The guideline stresses to separate ownership, contract and management rights for contracted rural land and plans to explore the separation of the ownership, qualification and use rights for homesteads in rural areas.

In terms of the oceans, the guideline vows to accelerate the improvement of mechanisms regarding the transfer, sale, mortgage, lease and investment of sea areas while exploring the transfer and lease of the right to use uninhabited islands. This means that in the future, ordinary people may own certain islands.

Another focus of this reform is to clarify the ownership of property rights of natural resource assets in order to tackle problems such as the unclearly defined rights and interests of owners and an unreasonable mechanism for the distribution of earnings from natural resources, according to a statement issued by the MNR.

In addition, the guideline proposes to formulate unified standards for the classification of natural resources, establish a unified investigation, monitoring and evaluation system, and conduct uniform natural resource surveys nationwide.

Zhu said clarified property rights will be conducive to the protection and intensive utilization of natural resources while strengthening the protection and restoration of the ecosystem. Natural resources and human activity constitute a community of life. Since various natural resources are closely interrelated, they must be protected and restored as a whole, he added.

Transfer of property rights

The guideline also proposes increasing market-oriented transfer of property rights and improving the price formation mechanism to give the decisive role to the market in resource allocation. Meanwhile, it requires that the government enhance its regulatory role through the control of the amount and size of these transfers.

In response to the absence of an effective evaluation system within the government and weak public supervision, the guideline proposes to set up a comprehensive system for assessing officials' performance in managing natural resource assets, launching out-of-office auditing and improving the lifelong accountability system.

However, the reform still faces some difficulties, Zhu said. Different types of natural resources have different characteristics. For example, land is closely related to other natural resources such as minerals, water, forests, grasslands and oceans, but it is also substantially different from them. Therefore, the reform measures should be differentiated accordingly to suit individual needs.

Moreover, striking a balance among rights, responsibilities and interests concerning natural resource assets will be crucial to the success of the reform. Clear ownership, intensive and sustainable development, all-around protection and restoration, and a law-based planning and administration system will be necessary, according to Zhu.

Copyedited by Rebeca Toledo

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