Purchase Restrictions Violate the Rights of the People

By EO Editorial Board
Published: 2011-01-25

Cover, Issue 504
January 24, 2011
Translated by Tang Xiangyang
Original article:

"Restriction"(限,xìan ) might be one of the hottest characters of 2011. Restrictions have become the new norm; now the Beijing government is imposing restrictions on non- resident car-buyers in Beijing. Additionally, dozens of cities have imposed restrictions on home-buyers and more will follow suit. If inflation continues, there may be more restrictive policies.

Buying and selling are two basic market behaviors. To buy or not to buy should be up to the public. Just as Zhou Qiren, a professor with Peking University, put it, these are two basic civil rights. But why is our government imposing restrictions on two basic rights? The restrictions have added great inconveniences to people's daily lives and have crippled ordinary demand and expanded the government's authority. If these restrictive policies are unavoidable, why does the public have so little say on these issues?

There is historical precedent for those policies. When China first began its process of opening up to the world, Deng Xiaoping said that the main problem facing Chinese society was that the country's outdated production capacity could not meet increasing domestic demand for commodities. At that time, due to the severe shortage of materials, people were forced to ration.

Over the last thirty years, the situation has completely changed. China's production capability has advanced. For example, we are producing more and more cars at lower and lower prices, but traffic is becoming increasingly congested and public roads are getting worse and worse. It's obvious that the production of public services still lags. China's taste for material goods is ready to board the express train, but the wheels are coming off the bicycle of public service.

Housing policy faces a similar dilemma. Commercial housing has edged policy-based housing out of the market, forcing people to buy a house at the expense of their possessions. Parents do not hesitate to spend their life savings on an apartment for their children. Even though speculation has caused rising housing prices to surge, people have no choice but to purchase commercial housing when policy-based housing is nowhere to be found.

The government has taken notice of the congestion in cities caused by the rapid increase in car ownership, and inflated housing prices and their impact on the general standard living and social stability. But the government does not always recognize its own responsibilities. Its direct response to the problems has been to restrict consumer freedom. Even though these restrictive policies are not the same as the rationing tickets handed out in the era of Deng Xiaoping, their effects are rather similar.

History has proven that restricting demand does not make it disappear. Blindly imposing restrictions on consumers instead of allowing demand to lift productivity will bring problems. People tolerate various "restrictions" because they expect things to be changed. For example, they expect urban planning will be remodeled, the traffic situation will be improved and the restriction on car buyers will be removed. If more policy-based houses are constructed, people won’t need to line up to buy commercial flats. 

We have to recognize that people are only willing to give up their basic rights conditionally. They expect the government to offer a more equitable future for consumers. Governments should understand that demanding a sacrifice from consumers comes with a responsibility to deliver results.

Additionally, consumer sacrifices deserve a public discussion, an operation procedure, and a contract between the government and the people. This negotiation is in accordance with the public interest. During the past year, we have seen very few cases of this type of communication and negotiation. Few seem to care whether the restrictions are lawful.

What's more, these consumer sacrifices cross the rational boundary between government authority and private domain. Restrictions must be exceptions and not the norm. Governments cannot demand people to give up their rights in the name of the public interest nor should the public comply with the demand for unjust sacrifices. If sacrifices become norm, the government will continue to overstep its boundaries. This will result in an unsupervised government with few limitations that will not think twice about violating the rights of the people.

This article was edited by Rose Scobie and Ruoji Tang