On the question of the exercise of State ownership. In accordance with the provisions of the Constitution, the National People's Congress is the highest organ of the State power and the State Council is the executive body of the highest organ of the State power. The fact that the National People's Congress exercises the State power on behalf of the people throughout the country is embodied in its making of decisions in accordance with law on major issues that have a bearing on the overall situation of the State, and the organ that puts those decisions into effect is the State Council. It follows that it is the government, not the National People's Congress, that concretely exercises the ownership of the State. In such laws as the Land Administration Law, Mineral Resources Law, Grassland Law and Law on Administration over the Use of Sea Areas, it is explicitly stipulated that the State Council exercises the ownership on behalf of the State. As a matter of fact, it is also the administration system currently in effect. The draft property law stipulates, "The State Council shall exercise the ownership of state-owned property on behalf of the State; and where otherwise provided for in laws, the provisions there shall prevail." It is not only in conformity with the characteristics of the people's congress system, but also embodies the requirements laid down at the 16th National Conference of the CPC that the State formulate laws and administrative regulations to establish a state-owned assets management system whereby the Central Government and local governments respectively perform the duties of promoters on behalf of the State and enjoy the rights and interests of owners. The fact that the National People's Congress empowers the State Council through legislation to exercise the ownership of the State on behalf of the State embodies the nature of the National People's Congress and the characteristics of the exercise of its functions and powers. In exercising ownership of the State, the governments shall be accountable to the people's congresses and subject to their supervision according to law.

On the question of protection of state-owned property. In light of the present situation of the loss of state-owned property, the draft property law strengthens the protection of state-owned property from the following five aspects on the basis of adherence to the principle of equal protection:

One, it stipulates, "The property owned by the State as provided for by law belongs to ownership of the State, that is, ownership of the entire people." And it also makes stipulations on the specific property that belongs to state-owned property, in order to prevent the loss of state-owned property due to equivocal definition of its ownership.

Two, it stipulates, "No units or individuals shall be allowed to obtain ownership of the immovables or movables exclusively owned by the Sate as is provided for by law."

Three, it stipulates, "The property owned by the State shall be protected by law, and illegal possession, looting, illegal sharing, withholding or destruction of such property by any unit or individual is prohibited."

Four, in light of loss of the property of the state-owned enterprises, it stipulates, "Any unit or individual that, in violation of the provisions on management of state-owned property, causes loss of state-owned property by transferring it at a low price, illegally sharing it in conspiracy with another person, placing a charge over it without authorization, or by other means in the course of restructure of the enterprise, merger or division of the enterprise, or affiliated transaction, etc., shall bear legal liability according to law."

Five, in light of the problems existing in supervision over state-owned property, it stipulates that where in performing their duties of administration of and supervision over state-owned property, the authorities and their staff members "cause loss of state-owned property due to their abuse of power or dereliction of their duties, they shall bear legal liability according to law."

These stipulations manifest the essence of the Constitution on the need to strengthen protection of the socialist public property and are of tremendous practical significance.

(4) Property of the Collective.

In accordance with the Constitution and the Party's basic rural policies at the present stage, the draft property law explicitly stipulates, "Rural collective economic organizations apply the dual operation system characterized by the combination of centralized operation with decentralized operation on the basis of operation by households under a contract." And at the same time, the "right to land contractual management" and the "house-site-use right" are stipulated separately in special chapters.

In order to grant the farmers a long-term and guaranteed land- use right, the draft property law stipulates that, at the expiration of the term of a contract for a piece of farmland, grassland or forest land, the contractor of the right to land contractual management may have the contract renewed in accordance with the relevant provisions of the State.

On the question whether the restrictions on the transfer and mortgage of the right to land contractual management and the house- site-use right can be lifted. In view of the fact that at present, the social security system in the rural areas of our country has not yet been established in an all-round way and that the right to land contractual management and the house-site-use right provide the farmers' lifelong foundation, the conditions for lifting such restrictions are not yet ripe, when considering from the perspective of the country as a whole. In order to maintain the laws currently in force and the policies of the State on rural land at the present stage, as well as to leave some room for revising relevant laws or adjusting relevant policies in the future, the draft property law stipulates, "Persons enjoying the right to land contractual management shall be entitled to circulate such right by adopting such means as subcontract, exchange and assignment in accordance with the provision is of the Law on Land Contract in Rural Areas." "Such laws as the Land Administration Law and the relevant regulations of the State shall be applicable to the obtainment, exercise or assignment of the house-site-use right."

On property of the collective in cities and towns. The enterprises of the collective in cities and towns in our country have gradually been established since the 1950s. Through their evolution over the last few decades, some of them were established by state-owned enterprises for the purpose of offering jobs to the children of their workers and for the youths who had received a school education and had returned to cities and towns from the countryside; and others were established by state-owned enterprises for the purpose of separating subsidiary industries from them and replacing their surplus labor force in the course of reform of the enterprise system. Through reform of the enterprise system over the last few years, great changes have taken place in the enterprises of the collective in cities and towns. At present, reform of the enterprises of the collective in cities and towns continues to deepen in accordance with the principles laid down since the 16th National Conference of the CPC. The draft property law has made stipulations in principle on the property of the collective in cities and towns in term of the right to things, as follows, "The immovables or movables owned by the collective in cities and towns shall, in accordance with the provisions of laws and administrative regulations, be possessed and used by, shall benefit, and shall be disposed by, the said collective." And it stipulates, "The property owned by the collective shall be protected by law, and illegal possession, looting, illegal sharing, or destruction by any unit or individual is prohibited." These stipulations are not only in conformity with the present conditions, but also leave some room for deepening the reform in the future.