Beijing, December 24 :

Parliament today took up me-asures meant to bring Chinese law into line with a more op-en, capitalist-style economy by protecting private property and equalising taxes for forei-gn and domestic companies.

The proposed property law is the most controversial measure to come before parliament in recent years. Earlier versions prompted an outcry by leftists, who complained it would undermine state control of the economy and worsen the growing gap between an elite who have profited from China’s reforms and the poor majority.

The National People’s Congress began considering a seventh draft today that “strikes a balance between private property and state ownership,” reported Xinhua. Ba-ckers hoped to pass it when the NPC holds its next full meeting.

The Communist Party am-ended the constitution in 2004 to enshrine private property rights for the first time since its 1949 revolution. That followed two decades of reform that let hundreds of millions of Chinese lift themselves out of poverty as entrepreneurs started businesses, bought homes and traded stocks. The debate over legal chan-ges meant to enforce such pr-otections highlights enduring concern about the impact of China’s rapid but uneven growth, which has set off pro-tests over poverty, taxes and seizures of farmland for redevelopment. The government of president Hu Jintao says it is committed to more reforms while trying to ease social tensions. Beijing has promised to spread prosperity from China’s booming cities to the countryside and urban poor.

The property law, first prop-osed five years ago, was withdrawn from parliament durin-g its last full meeting in March in an unusual reversal by the government after lawmakers failed to agree on its wording.

Lawmakers took up a proposed law to equalise tax rates paid by Chinese and foreign companies, many of which qualify for lower taxes due to incentives meant to attract investment. Finance Ministry Jin Renqing told lawmakers “a unified tax code will create a taxation environment that favors fair competition among all ventures registered in China,” Xinhua reported.

Private Chinese businesses complain that breaks granted to foreign companies are hurting domestic entrepreneurs. Pressure has risen following Beijing’s entry into the WTO, which lowered market barriers to foreign competitors. The proposed law would unify tax rates at 25 per cent, Xinhua reported. It said that when various tax breaks are taken into account, the average Chinese company pays taxes at a 24 per cent rate, while foreign companies pay 14 per cent.