+(,121/,1(

Citation:
Xiaojing Qin, A Political Study on Foreign Ownership of
Land: Theoretical Challenges and Justifications, 12
Manchester J. Int'l Econ. L. 195 (2015)

Content downloaded/printed from HeinOnline

Wed Jun 6 07:15:28 2018

-- Your use of this HeinOnline PDF indicates your acceptance

of HeinOnline's Terms and Conditions of the license
agreement available at https://heinonline.org/HOL/License

-- The search text of this PDF is generated from

uncorrected OCR text.

-- To obtain permission to use this article beyond the scope

of your HeinOnline license, please use:

Copyright Information

Use QR Code reader to send PDF to

your smartphone or tablet device
Manchester Journal of International Economic Law
Volume 12, Issue 2: 195-211, 2015

A Political Study on Foreign Ownership of Land:

Theoretical Challenges and Justifications

Xiaojing Qin*

ABSTRACT: Challenges to foreigners' rights to land have built up over a long time and the
institutions which support them will continue to exist for a long time. The long-standing challenges
relate to the fact that land is politically significant as it sustains the state 's territory and thus the
privilege to acquire land should be granted exclusively to national citizens who are politically
allegiant to the state. This paper examines the issue offoreigners' land ownership rights from a
politicalperspective. Itfirst reviews traditionalpoliticalchallenges toforeign landownership which
are examined and tested consequently. The examination of the political arguments indicates a
changed role of land in the new market setting and an on-going change in terms of the political
value the land represents, among which the economic value of land is increasingly taking a more
prominent role compared to its political value. It concludes by stating that political challenges
affecting foreigners' access to land ownership may not bejustified in the new era of globalization
and therefore the restrictionsimposed on foreign land ownership as a result of political concerns
may not be maintainedby the states.

1. INTRODUCTION

Recent proliferation of foreign investment in the real estate sector has contributed quite
substantially to the continuous prosperity from foreign investment. While the magnitude of
capital influx assisted by overseas land investment benefits national economies in different
respects,' it also stirs up strong domestic concerns due to the special sociological and political
character of land.2 Land is defined as essential raw materials and the physical ground that
sustains state territory. The acquisition and possession of domestic real estate by aliens may be
taken as a movement towards sovereignty takeover, not only economically, but also politically.3

* Lecturer in Law, Beijing Normal University, China. The author also sits on the Editorial Advisory Board of
InternationalJournalof Law in the Built Environment. This research was supported by the Fundamental Research
Funds for the Central Universities (project no. SKZZX2013005), for which the author wishes to express her gratitude.
I Williams B. Fitch, 'State Regulation of Alien Land Ownership', Missouri Law Review, 1978, 43(3):407-430, at
407.
2 Leslie J. Levinson, 'Foreign Investment in United States Real Estate: Federal and State Regulation', Case Western
Reserve Journalof InternationalLaw, 1980, 12(1): 231-248, at 231.
3 Alan I. Pfeffer and Rikki L. Quintana, 'Foreign Investment in the United States: A Nineteenth Century Perspective',
Stanford Journal of InternationalLaw, 1981, 17:45-82, at 46.
 A Political Study on Foreign Ownership of Land

States have responded to such concerns by making strong attempts to impose restrictions on the
alien ownership of land and emphasizing the significance of protectionist measures with regard
to foreign real estate investment. In times of strong public distress, states can even inhibit the
entry of aliens to domestic real estate land so as to alleviate public anger. All these measures
largely frustrate aliens' hopes of investment and the booming of the international real estate
market.

Thus far, not many studies have addressed the issue of foreigners' land ownership rights
in a political context. Most have an extensive focus on the economic value of real estate
investment, such as global property investment and finance and international property
portfolios, in the context of the current legal framework. 4 The deeper political forces shaping
foreign real estate investment are hardly examined. Even in cases where these underlying
rationales are listed, they are taken for granted; the deeper theoretical logic justifying the
process of this 'shaping' is not properly tested.

This does not mean the political perspective is not valued; rather, it survives as one of
the greatest barriers to alien land ownership; the political claim on land is so strong and natural
that people take it for granted when defining the problem of alien land ownership. However,
while the economic concerns about alien landholding could be removed through negotiations,
which have already reflected in many state-initiated proposals, the political barriers to alien
land ownership might be hard to remove and therefore may turn out to be the most persistent
obstacle to allowing aliens to acquire land. If land freedom is to be increased, political sentiment
regarding land must be diluted. This paper hopes to penetrate the correlation between land and
policy, through a political analysis closely intertwined with historical and human rights
perspectives.

This paper first reviews political challenges in the existing restrictions on foreign land
ownership with the theoretical logic of the challenges explored and presented in Part II.
Following that, two frequently used arguments in maintaining alien land restrictions, namely,
land entails territorial political power and citizens owing full allegiance to the state, are
examined and justified in Part Il. The author finds that both arguments fail to hold up under
scrutiny, all suffering from some theoretical and practical weaknesses. Finally this paper
concludes in Part IV and finds that land in today's market economy is the normal resource for
acquiring wealth and has no distinctive value evoking political power. Based on these findings,
the author states that political concerns over foreign land ownership cannot be justified in the
new era of globalization.

I See Charles H. Sullivan, 'Alien Land Law: A Re-evaluation', Temple Law Quarterly, 1962, 36: 15-53; Fred L.
Morrison, 'Limitations on Alien Investment in American Real Estate', Minnesota Law Review, 1975, 60: 621-668;
Ellen Frankel Paul, Fred D. Miller Jr. and Jeffey Paul (eds.), Property Rights (Cambridge: Cambridge University
Press, 1994).
' See for example Stephen Hodgson, Cormac Cullinan and Karen Campbell, 'Land Ownership and Foreigners: A
Comparative Analysis of Foreign Approaches to the Acquisition of Land by Foreigners', FAO Legal Papers Online
No. 6, December 1999 available at www.fao.org/Legal/Prs-OL/lpo6.pdf accessed 10 November 2010; Joshua
Weisman, 'Restrictions on the Acquisition of Land by Aliens', The American Journal of Comparative Law, 1980,
28(1):39-66.
 MJIEL Vol. 12 Iss. 2 2015 Xiaojing Qin

2. POLITICAL CONCERNS OVER FOREIGN OWNERSHIP RIGHTS

Political arguments, although elaborated in slightly different terminologies, tend to share the
common proposition that land is a political resource and that alien investment in land risks
granting alien investors political privileges in the host states.6

It is one of the strongest forces defining aliens' ability to acquire land. Land ownership
is taken to be more political than the ownership of other things, as it sustains the state's
territorial domain. Gaffney has suggested that 'the very nature of owner's domination over part
of the national estate is an expression of sovereignty power, the same power nation claims to
exclude the world.'" As national land estate involves political implications, it needs to be
granted to those who are politically allegiant to the state. Citizens are taken to be suitable as
they owe allegiance to the state. Aliens, however, lacking the desired moral sense of allegiance,
are excluded. The logical process from territory to land may be summarized as follows: land
entails political territorial power; as citizens are fully allegiant to their political authority, the
privilege to acquire land should be granted to citizens; and the exclusive landholding rights of
citizens, if acquired by aliens, are presumed to indicate a loss of territorial power. Obviously,
the correlation between land and territory is established based on two presumptions - land
possessing political territorial power and citizens owing full allegiance to the state.

However, scholars seldom question the justifiability of two presumptions. This is due to
the fact that land and territory occupy the same physical ground. This work aims to go further
and analyse these presumptions by borrowing some theories from land law,' international law
9 and political fields."i These theories, although developed quite well in their own fields, have

never been combined and applied to clarifying the issue of alien land ownership, which will be
the focus of this work.

In the following part, the justifiability of these two presumptions will be examined and

6 See e.g., supra note. 3 and 4; Andrew J. Starrels, 'A Proposal for Uniform Regulation of Foreign Investment in
American Real Estate', Cornell InternationalLaw Journal, 1985, 18:147-178.
7 Mason Gaffney, 'Social and Economic Impacts of Foreign Investment in United States Land', NationalResources
Journal,1977, 17: 377-393, at 383.
' For the discussion of this issue in the context of land law, See Sullivan, supra note. 4; Kevin Gray and Susan
Francis Gray, Land Law (4 h ed., Oxford: Oxford University Press, 2005).
9 The discussion of the link between territory and sovereignty has been developed into a wide range of academic
streams. The sovereignty-dominant theory was introduced by Aristotle in his ancient philosophical arguments (please
sees Aristotle, The Politics of Aristotle, translatedwith notes by Ernest Barker (Oxford: Clarendon Press, 1948))
and developed later in the State-centric theory, (e.g., Max Weber, The Theory of Social and Economic Organization
(New York: Free Press, 1964); Janice E. Thomson, 'State Sovereignty in International Relations: Bridging the Gap
between Theory and Empirical Research', InternationalStudies Quarterly, 1995, 39(2): 213-233, at 220 and Kenneth
N. Waltz, Theory of International Politics (London etc.: Addison-Wesley, 1979), pp.194-211)); For literature on
international relation doctrines, see Nicholas Onuf and Frank F. Klink, 'Anarchy, Authority, Rule', International
Studies Quarterly, 1989, 33(2): 149-173; at 164-70; Thomas M. Franck and Edward Weisband, World Politics:
Verbal Strategy among the Superpowers (New York: Oxford University Press, 1971); Johan Galtung, 'Structural
Theory of Imperialism', Journalof Peace Research, 1971, 8(2):81-117, at 86-8; for the works on globalization and
its impact on national sovereignty, see Edward S. Cohen, 'Globalization and the Boundaries of the State: A
Framework for Analyzing the Changing Practice of Sovereignty', Governance: An InternationalJournalof Policy
and Administration, 2001, 14(1):75-97, at 78-9.
10 For the discussion of national allegiance between national citizens and aliens, see Hume's social convention
theory in John Day, 'Hume on Justice and Allegiance', Philosophy, 1965, 40 (151): 35-56 and Montesquieu
republicanism theory in Montesquieu, The Spirit of the Laws, translated and edited by Anne M. Cohler, Basia
Carolyn Miller and Harold Samuel (New York: Hafner Publishing Co., 1949).
 A Political Study on Foreign Ownership of Land

challenged. The correlation between land and territory is considered first; this was manifested
by Locke in his philosophical discussions of social contract theory and consent doctrine.11 A
more detailed examination of Locke's theories indicates such a correlation is assumed with no
arguments given. 12 Locke's thoughts with respect to the correlation between land and territory
are seen to indicate the pattern of feudalism rather than the pattern of a modern market economy,
within which the notion of land has been more economically recognized.13 Furthermore, such
a link is further challenged by appealing to the idea that private land rights and territory are
distinct conceptions, drawn from different domains. Even if the correlation between the two
notions can be established as assumed by some scholars, the suggested effectiveness of
establishing nationality-based land ownership rights in ensuring state independence is
questionable due to the attenuated role of territory in sustaining statehood. The greater
importance of sovereignty over territory in sustaining statehood has been proposed in different
political theories from the ancient days to the era of globalization. 14 It was introduced by
Aristotle, developed in modern international relations theories and finally accommodated into
the state's rule-making process with the political and economic integration in the global
15
context.

The arguments against natural allegiance exclude the possibility that citizens are born
into allegiance and engender the conclusion that citizens, like aliens, may also be disloyal.
Furthermore, the permanent and absolute claim of allegiance suffers from both logical deficit
and theoretical weakness. From a logical perspective, the fact that states permit citizens to
emigrate could generate disloyalty among those considering emigration, and overrules the idea
that allegiance is permanent. From a theoretical perspective, such an idea is claimed to be
incompatible with the development of globalization under which citizens are gradually defining
their identities outside the idea of the state and foreigners are accommodating the idea of the
state into their identities.

3. JUSTIFICATION OF POLITICAL CONCERNS

OVER FOREIGN OWNERSHIP RIGHTS

3.1. Challenge to the Established Link between Land Ownership and Territorial Integrity
3.1.1 Correlation between land and territory
The first philosophical discussion and analysis of the link between land and territory is seen in
Locke's doctrine of consent, which was the basis for his social contract theory. 16 He introduces
social contract theory and points out that the political community is also formulated and

11John Locke, The Second Treatise of Government, edited by John Wiedhofft Gough (Oxford: Basil Blackwell,
1976), 116-22.
12 Jeffrey Gale and Rogene A. Bucholz, 'The Political Pursuit of Competitive Advantage: What Business can Gain
from Government', in Alfred Marcus, Allen M. Kaufman, and David R. Beam (eds.), Business Strategy and Public
Policy: Perspectivesfrom Business and Academia (New York: Quorum Books, 1987), p. 4 8 2 .
13 Ibid., p.483.
14 See supra note. 9.
15 Ibid.
16 Locke, supranote. 11, 116-22.
 MJIEL Vol. 12 Iss. 2 2015 Xiaojing Qin

maintained with the consent of its members. 1 The devolutional process from individual to
community involves not only a submission of allegiance but also a submission of land property
as the state territory can only be established and defined through the land submitted by the
people. There are two forms of consent: express and tacit.18

According to Locke, express consent is a 'declaration of a man's consent to make himself

subject to the laws of any government by means of words or language, either written or
spoken.' 19 For anyone intending to be a member of a state, their express consent and submission
of their possessions is required. 0 Once express consent is given by submitting property and
allegiance, the declarer immediately becomes a member of the commonwealth and is deprived
of the right to emigrate.2 1 Locke holds that if the creator or new participant feels free to
withdraw their allegiance and emigrates to another state, they could remove their property as
well.22 As such, the government will 'come to be dissolved'.2 3 The state, when it loses control
over its people, will also lose control over the land and thus over its territory, since the latter
may only be achieved through the stability of the former.24 The logical presumption of Locke's
express consent theory is that land and territorial sovereignty are integrated and even identified
with each other. Perpetual allegiance, as the basis of upholding territorial integrity and land
preservation, cannot be withdrawn, even with the mutual consent of the state and its citizens,
5
as it is fundamentally valuable for a healthy orderly state.

Tacit consent arises automatically as a consequence of the enjoyment of land within the
boundaries of a given state.2 6 Once the person acquires land in the commonwealth territory, he
is presumed to have recognized the jurisdiction of the government over the land and tacitly
subjected himself to the law of that state. Tacit consent applies to 'Whoever ... by inheritance,

17 Ibid.
1 Julian H. Franklin, 'Allegiance and Jurisdiction in Locke's Doctrine of Tacit Consent', PoliticalTheory, 1996, 24
(3): 407-422, at 407.
19Paul Russell, 'Locke on Express and Tacit Consent: Misinterpretations and Inconsistencies', 1986, 14(2): 291-
306, at 292.
20 Locke, supranote 11, 120, where he states:

To understand this better, it is fit to consider, that every Man, when he, at first, incorporate
himself into the Commonwealth, he by uniting himself thereunto, annexed also, and submits to
the Community those Possessions, which he has, or shall acquire, that do not already belong to
any other Government.
21 Ibid., 117 and 121, where Locke argues 'Commonwealth not permitting any part of their dominion to be
dismembered, nor to be enjoyed by any but those of their Community'.( 117); Such a view is further clearly
confirmed in para. 121 which states:
Whereas he, that has once, by actual agreement, and any express Declaration, given his Consent
to be of any Commonwealth, is perpetually and indispensably obliged to be and remain
unalterably a Subject to it, and can never again in the liberty of the state of Nature.
22 Franklin, supra note 18, at 412.
23 Ibid.
24 Locke, supranote 11, 116-22.
25 Ibid.
26 Ibid., 119.
27 Ibid., which states:
[E]very man that hath any possession or enjoyment of any part of the dominions of any
government doth thereby give his tacit consent, and is as far forth obliged to obedience to the
laws of that government during such enjoyment as any one under it; whether this his possession
be of land to him and his heirs for ever, or a lodging only for a week; or whether it be barely
traveling freely on the highway.
 A Political Study on Foreign Ownership of Land

purchases, permission, or otherwise, enjoys any part of the land', as long as he stays within the
territory.28 As the tacit consenter is not a member of the government of the land, he does not
need to show perpetual and immutable allegiance to the government.29 Instead, he could
withdraw his allegiance and leave the jurisdiction on his own personal whim.30 The subject is
bound to obey the government so long as he wishes to enjoy its protection and own property
within its jurisdiction.31 However, the freedom to leave the sovereignty is conditioned on his
giving up the possession of land within its boundaries. To leave the jurisdiction, he has to give
up his property by 'donation, sale or otherwise'.32 Locke seems to suggest that the political
community's general jurisdiction over land possession within its territory may not be changed,
although the person who possesses it is subject to change. 33 Locke, again insists on the
perpetual tie between territory and land in his tacit consent argument, as he did in his express
consent argument.34

The key argument in Locke's doctrine of consent is his attempt to account for the
territorial integrity of political community through governance over land. The pursuit of
territorial integrity is central to the justification of Locke's doctrines on both express and tacit
consent.3 5 However, Locke's attempt to establish a link between land and territory is simply
taken as an expedient presumption to suit his theoretical needs.36 He does not explicitly point
out how private property ownership in the pre-political 'state of nature' is transferred to
territorial jurisdiction with the establishment of the state.

Locke claims that there is a 'state of nature' governed by the 'law of reason' before the
establishment of the state. In this so-called state of nature, people exercise natural law to sustain
their own communities, under which every man gets equal rights at birth, without jurisdictional
compliance. Every man 'is to be free from any superior power on earth' and lives in 'a state of
peace, good-will, mutual assistance and preservation'] Natural law is 'a fixed and permanent
rule of morals' which is 'firmly rooted in the soil of human nature' .38 All men in that society
believe that it is 'a liberty to follow my own will in all things where the rule prescribes not'. ' 39

In that society, people equally define 'their desires within the narrow bounds of each man's
small property' .4' The equal rights on property are justifiably exercised among members and
no man is allowed to rely on his possession of land to perform governance over others.41

As land possession is independent in the pre-political state of nature (before the rise of

28 Ibid., 120.
29 Ibid., 116-22.
30 Ibid., 121.
31 Ibid., 116-22.
32 Ibid., 121.
" See Franklin, supra note 18.
14 Ibid., p.408.

35 Ibid., p.417.
36 Ibid., p.418; see also Gale and Bucholz, supra note 12, p. 482.
37 Locke, supranote 11, 19.
38 John Locke, 'Essays on the Law of Nature: The Latin Text with a Translation,Introductionand Notes, Together
with TranscriptsofLocke's Shorthandin His Journalfor1676', edited by W. von Leyden (Oxford: Clarendon Press,
2002), Essay 1, p.121; Essay VII, p.199.
'9 Ibid.
40 Locke, supranote 11,1 107, 111 and 162.
41 Day, supra note 10, at 47 footnote 1.
 MJIEL Vol. 12 Iss. 2 2015 Xiaojing Qin

the state), jurisdiction over land does not automatically entail dominance over state territory.
Furthermore, Locke simply states that, for people wishing to join the state, submission of land
is necessary. The transfer of personal land ownership to governmental land ownership over
territory is taken to be a given, with no need for explanation. However, as people have been
vested with land ownership in the state of nature, they may only promise to submit their
personal allegiance to the government under the condition that their land does not come under
its control. As the establishment of government involves the making of social contractual
bargains, people have free choice in determining whether the new government respects their
private property rights. If the state were ultimately established upon such a model, land under
the new jurisdiction would be treated more as private property, access to which would not be
dependent on the state's governance of it. However, Locke seems not to realize such a
possibility, but simply assumes that governance over land property will directly follow from
governance over people. Such an assumption is taken by many critics to be purely a convenient
means of justifying Locke's own theoretical purpose of territorial integrity.4 2 They claim the
establishment of state jurisdiction only involves the submission of personal allegiance. When a
state's territorial expectation is conferred on the committed individuals, who use their private
property in the way expected by the state, territorial jurisdiction and land property are
correlated.4 3 It is through such indirect ties that title over public territory and title over private
land are correlated, which, in a deeper sense, distinguish them as concepts in two dimensions.

Locke's view of land and territory resembles feudalism.44 The elements of political
obligation imposed on land possession, and the domination of land over a state's economic and
political undertakings are similar to the pattern of king and lords possessing land and imposing
their political influence on their tenants.4 5 In the closed community, land was treated as the
most, if not the only, valuable resource of the society and exclusive control over it undoubtedly
granted the more dominant in society political privileges. Therefore title of territorial
sovereignty over a piece of land declares a right to govern others. However, modern society
does not cherish land so much, since an open economy has diversified options for possessing
wealth and has separated voting rights from land ownership. Therefore the role of land as the
key to wealth and privileges has been greatly diluted.

Although the notions of land and territory deal with the same subject, they are distinct
notions drawn from different domains and receive different treatment from state authorities.4 6
Territory is in the public domain, due to its fundamental significance in sustaining statehood.
As a result, states make control over territory their highest priority. The title of real property
entails exclusive rights to hold and use the land. According to the definition of land ownership,
such a notion includes the exclusive rights of possession, use and disposition.4 None of these

42 Franklin, supra note 18, at 418; George Gale, 'John Locke on Territoriality: An Unnoticed Aspect of the Second
Treatise', PoliticalTheory, 1973, 1(4): 472-485, at 482.
41 Franklin, ibid.
4 Gale, and Bucholz, supra note 12, p. 483.
41 Ibid.
46 Franklin, supra note 18, at 417.
41 See Richard Allen Epstein, Takings: Private Property and the Power of Eminent Domain (London: Harvard
University Press, 1985), pp. 3 0 4 - 5 .
 A Political Study on Foreign Ownership of Land

elements conveys political rights of governance on the landholder.

Private property is an antecedent to the formation of territory and the two co-exist as a
consequence of the submission of people and the formulation of political jurisdiction. With the
movement of global human rights, the two ideas might be detached once again. Their
harmonious co-existence in one historical era has indicated the natural distinctions between the
two ideas, that is, land possession accounts for private property rights, while territorial
jurisdiction relates to the political power to govern.

3.1.2 Correlation between territory and statehood

Even if the presumption about the relationship between private land and territorial jurisdiction
is sustained, the political strength of territorial boundaries in sustaining statehood has been
attenuated by the increasingly cross-border political and economic movements of today. The
control of territorial scope is more and more defined subject to a state's sovereignty capabilities
and the social values pursued by the state at different times. Territory has shifted from the
geographic limits shaping the state's authority to one that facilitates its exclusive sovereignty
claims. As the significance of the current and potential prosperity of a territory is eliminated,
the correlated notion of land, by the same reasoning, will be less likely to entail the same
political implications as it did traditionally.

The institution of state has primarily three criteria: defined territory; permanent
population and sovereignty.48 Sovereignty is generally recognized as the key, and concerns a
state's internal governance and its international capacity to enter into relations with other
states. 49 Territory refers to the physical land which, at the international level, is owned
exclusively by the state. 0 Population refers to the people subject to the state's sovereignty.
These factors are all integral in guaranteeing a state's supreme authority. A defined territory and
settled population are the physical conditions necessary to sustain sovereignty, while
sovereignty power ensures territorial security and the wellbeing of the citizens. However,
debates concerning the comparative significance of these three elements in sustaining statehood
are long-standing in the empirical theories. A focus on the power of territory in delineating
statehood is primarily presented in the territoriality doctrine. 1 On the other hand, the arguments
addressing the centrality of sovereignty are scattered among a wide range of related but
analytically-distinct theories, including the ideas of Aristotle, international relations doctrines
and the theoretical considerations of globalization. 2 This section attempts to introduce the
relevant theories, and integrate them with each other to provide a general framework of the
comparative significance of sovereignty and territory.

The territoriality argument contends that state territory is the 'unique basis upon which

48 Article 1, Montevideo Convention on Rights and Duties of States (signed 26 December, 1933, entered into force
26 December 1934).
49 Thomson, supra note 9, at 214.
50 Alan James, Sovereign Statehood: The Basis ofInternationalSociety (London: Allen & Unwin, 1986), p. 13.
1 See generally, Frank Klink, 'Absolute Territorial Sovereignty and Its Universalization: The Institutional
Foundation of Structural Inequality in Interstate Policies', Paper presented at the Annual Meeting of the American
Political Science Association, San Francisco, 30 August - 2 September 1990, p. 2.
52 Thomson, supra note 9.
 MJJEL Vol. 12 Iss. 2 2015 Xiaojing Qin

modern world politics is ordered' .5' Territory not only defines the common geographical spaces
to legitimize the idea of people staying in one place, but also figures prominently in the
development of common identities and community interests. 54 The state-building process
involves the incorporation of people into a community through the submission of their
allegiance. 55 A state's requirement of claiming allegiance from its members in the name of
citizenship is the common intention of all states despite the changeable nature of the
incorporation involved in different states. 6 Therefore, the territoriality dimension of statehood
entails not just physical boundaries, but also the more important element of membership. In this
extended sense, does the notion of territory play a significant role in sustaining the state's claim
of authority?

However, many political scholars take land as a common, but not the most important,
feature of a state. For example, Aristotle, in his ancient philosophical arguments, indicated that:

The identity of a state does not depend on its being surrounded by one set of walls,
or on its consisting of one stock of inhabitants. The state is a compound, and its identity,
like that of all compounds, is determined by the scheme of its composition-i.e. by its
constitution.5

He defines 'citizen' as 'a man who shares in the administration of justice and in the
58
holding of office'. Under this definition, 'judges in the courts and members of the assembly'
are included 'in the category of holders of office' , while mechanics and labourers tended to
be excluded from the category of citizens in most ancient states.60 Viewed from the perspective
of the modern society, such a concept is obviously discriminatory against those with inferior
social status. However the selective citizenship concept does affect its role in clearly identifying
the nature of the state. Rather, the 'discriminatory' concept, from another standpoint, clarifies
the idea that the state is not established on the basis of the whole population having the right to
own a certain amount of territory, but only on the rights of those who perform the state's highest
level functions. Modern society takes a more liberal concept of citizenship, but some citizens
still wield a disproportionate influence, as happened in the era of Aristotle. From this point we
could easily come to the conclusion that the state is not a population-affected identity. By the
same reasoning, the state is not established simply through its territory and boundaries either.
It could retain its identity even under a changing population and land. However 'when the
constitution suffers a change in kind, and becomes a different constitution, the polis [city-state]
also will cease to be the same polis, and will also change its identity. '61 Aristotle points out that
the element genuinely dominating a state's identity is its constitutional stock rather than its
volume of people and space. 62 As constitutional stock represented a state's internal sovereignty

" See generally, Klink, supra note 51, at 2.

14 Ibid.
" Thomson, supra note 9, at 215.
56 Ibid., p.228.
1 11 2
7 Aristotle, supra note 9, pp. - .
58 Ibid., p.107.
'9 Ibid.
60 Ibid., p.124.
61 Ibid.
62 Ibid., p.115.
 A Political Study on Foreign Ownership of Land

in his era, Aristotle is indicating the dominant position of sovereignty in shaping a state's
identity.

When the notion of sovereignty was later re-conceptualized to embrace its international
abilities,63 it was still taken by political scholars to be the central feature of state identity. Many
political theories are based on the assumption that 'states are, by definition, sovereign' .64 State-
centric theory, as the dominant idea in international political relations, bases its whole frame on
the assumption that the state is sovereign in character. Weber attempts to define the state by
exploring the substantial forces genuinely sustaining state authority, believing that such forces
penetrate the nature of the state more precisely and deeply.66 He presents the state as 'a political
group that has compulsory jurisdiction, exercises continuous organization and claims a
monopoly of force over a territory and its population'.6 Such a definition of the state focuses
on the 'means' which convey a monopoly of force, rather than the 'ends' that is the borders of
the territory and the size of the population. 6 The paramount force upholding the power of the
state, according to Weber, does not come from the scale of its physical territory but from its
power to claim supreme authority within the territory.

The idea that territory sustains statehood has also been challenged by international
relations theories, which hold that state sovereignty can be extended to a wider scope than
territorial limitations, due to capacity asymmetries among states. 6' The presumption of power
inequality and the suggested governance of the rulers over the ruled have been the absolute
basis for nearly all of the theories exploring the character of international relations. Hierarchical,
hegemonial and heteronymous relations of rule are the dominant frameworks."v According to
the hierarchical doctrine, the uneven distribution of state power within the international regime
could force states to accept the asymmetric arrangements of directive rule."1 As a result, a
strong state turns into a super-power while a weak state is subject to the direction of the former.2
If the tendencies continue and the unequal distribution of state capacities increases, direction
will turn into command, thereby invoking the rule of hegemony." The heteronymous doctrine
offers a conceptual framework based on an unequal distribution of factor endorsement.74 It
encourages free trade and takes the benefits of global exchange to be the state's incentive to
conduct external activities. However, due to the unequal distribution of factors involved in
the trade, the disadvantaged partner may be more affected by the possibility of losing the deal
than the more advantaged. 6 Therefore, the latter can still exercise power over the former, as in

63 Thomson, supra note 9, at 214.

64 Ibid., p.215.
65 Ibid.
66 Weber, supra note 9, p. 1 5 6 .
67 Ibid.
68 Ibid., p.155.
69 Thomson, supra note 9, at 220.
70 Onuf and Klink, supra note 9, at 170.
71 See Waltz, supra note 9, pp. 194-211.
72 Ibid.
71 See Franck and Weisband, supra note 9.
74 See Galtung, supranote 9, at 86-8.
71 Ibid.
76 See Albert 0. Hirschman, NationalPower and the Structure of ForeignTrade (Berkeley, California: University
of California Press 1980), pp. 1 7 - 5 2 .
 MJJEL Vol. 12 Iss. 2 2015 Xiaojing Qin

the case of hierarchy and hegemony. The relationship between African colonial states and
foreign powers best serves to illustrate the dominance of sovereignty power over territory under
heteronymous rules. Although African states have been independent for many years, they are
still highly dependent on foreign political and cultural imports for their existence." Territorial
integrity in the colonial states seems to contribute nothing towards their resisting such a power
intrusion. Sovereignty expansion over territory is the necessary outcome of international power
asymmetries, as indicated in the above arguments. Sovereignty power, as an international
concept, tends to enforce its influences either to a greater or less extent than the scope of the
physical territory, depending on the internal and external capacities of the state in question.

Economic globalization acts as another incentive to compel states to change their

traditional understanding of territorial borders. In this process, states' policies concerning
territorial control are more and more subjected to the changeable objects and purposes states
attempt to pursue. 8 States have traditionally treated their authority as coinciding with territorial
borders. Under the integrated economic system, states are losing control over their territorial
borders as cross-border economic activities come to dominate the evolution of society around
the world. " Such a trend compels states to re-define the status of territory. Territorial
boundaries are more and more considered as the instruments to facilitate states' diversified
economic, social and political purposes rather than as geographical limits enforcing their
authority.80 It is claimed that the states establish boundaries within their sphere of authority,
determining which kinds of activities they will manage directly and which they will allow to be
pursued and organized without any direct governmental interference.81 This determination
arises from the varied purposes and responsibilities that states accept at any particular time, the
projects they are pursuing and the dominant social and economic purposes they have
undertaken.82 Thus, movements across boundaries will be the focus of either control or neglect,
depending on the state's central policy goals, and these vary across time and across states. 83 In
other words, territorial borders act as the central proxy over which states impose their authority
and power. 84 But the scope of sovereignty is not essentially and in all respects tied to the
territory of states, which relies on the changeable objects and purposes that states attempt to
pursue.85

3.2. Challenge to the Established Link between Land Ownership and Political Allegiance
3.2.1 The concept of political allegiance
Citizenship refers to the special status that 'assigns individual to certain political community

" Hussein Solomon and Cornelia Cone, 'The State and Conflict in the Democratic Republic of the Congo',
Scientia Militaria,South African Journalof Military Studies, 2004, 32(1):51-74, at 57.
" Cohen, supra note 9, at 78-9.
79 Ibid.
'o Ibid.
8" Ibid., p.79.
82 Ibid.
83 Ibid.
84 Ibid.
85 Ibid.
 A Political Study on Foreign Ownership of Land

and endow those qualified as citizens with exclusive rights and obligations' ,6 Based on their
special status, citizens are presumed to be gradually bound together by the ties of national
solidarity. Such ties can provide citizens with common political, economic and cultural values
as well as ethical allegiance.

Citizenship and allegiance have been taken to be synonymous conceptions since they
were first created. The citizen is taken as the exclusive object of allegiance and is even defined
in terms of allegiance. The Harvard Research on Nationality Citizenship has defined nationality
as the 'status of a natural person who is attached to the state by the tie of allegiance'. However,
the nature of civil allegiance is not clear. In the following sub-section, the characteristics of
civil allegiance will be outlined, based on two conceptions of citizenship, Hume's social
convention theory and Montesquieu republicanism theory.

Hume attempts to label allegiance as 'psychological imagination' in his social convention

88
theory. According to Hume, justice and allegiance are both natural-born personality traits,
inherited within the established society.8 9 In other words, every citizen is born into permanent
allegiance to their governing state. Aliens, lacking such allegiance genes, are naturally
precluded from possessing loyalty to the alien government.

A modern understanding of citizenship and allegiance can be gained through recalling

Montesquieu's thoughts on republicanism.9" Montesquieu insists that a successful republic has
to have a considerable amount of social homogeneity and a relatively small body of citizens,
for the sake of social solidarity.91 Social homogeneity, meaning the extent to which citizens
identify with each other on various levels, is treated as the prerequisite for the formulation of
civic virtue and thus for the maintenance of social reliability.92 Having a small group of citizens
also tends to imply that they exert a great amount of force in guaranteeing the existence of a
harmonious public community.93 Otherwise, different economic pursuits, and conflicting social
and cultural values will erode any established sense of social solidarity.94 Social homogeneity
and a limited number of citizens are thought to engender 'the strong sense of fraternity' of civil
allegiance essential for a healthy and orderly community.95 Only if citizens agree on the most
basic issues, can allegiance be reliable and the community stable.9 6 In this process, allegiance
deprived from the social homogeneity which further shapes the community solidarity is
characterized as 'strong' and 'reliable'. 'Strong' indicates a kind of absolute allegiance with full
commitment to the community, while 'reliable' indicates a permanent sense of allegiance,

86 Maarten Peter Vink, Limits of European Citizenship: European Integration and Domestic Immigration Policies
(Basingstoke: Palgrave Macmillan, 2005), p. 1 .
" Article 1(a), Harvard Draft: The Law of Nationality, American JournalofInternationalLaw Special Supplement,
1929, 23 (13).
88 Day, supra note 10, at 40.
89 Ibid., p.44
90 See Montesquieu, supranote 10.
91 Ibid., p.231.
92 Rogers M. Smith, 'The American Creed and American Identity: The Limits of Liberal Citizenship in the United
States', The West PoliticalQuarterly, 1988, 41(2): 225-251, pp. 2 3 1 - 2 .
9' Ibid.
94 Ibid.
9' Ibid., p.231.
96 Ibid., pp.231-2.
 MJIEL Vol. 12 Iss. 2 2015 Xiaojing Qin

sustaining the stability of the community. Permanent and absolute allegiance is felt to be the
basic prerequisites for solidarity of community.

It is claimed that aliens' lack of permanent and absolute allegiance is an undeniable

concern which justifies the curtailment of alien land ownership. 9 The proponents of this
argument insist that aliens lack true allegiance and a desire to work towards the welfare and
success of state, traits which are present in citizens.9 8 These political sentiments, underpinned
by strong economic foundations, generate conflicts of interests between foreign investors and
domestic citizens, which have mainly arisen from absentee ownership, speculative investment,
agriculture and participation in community life. Firstly, alien intrusion into an area, primarily
when accompanied by absentee ownership, is claimed to dilute the sense of local community
and decrease integrated civil involvement and responsibility towards the community.99 The fact
that the landlord is based abroad is also presumed to seriously affect the relationships between
landlords and tenants, by increasing communication and transaction costs. "' While the
involvement of real estate agencies might mitigate such costs, property prices will certainly
surge through their participation and this burden is ultimately passed onto domestic tenants.10 1
Secondly, aliens' speculative investments might make economic goals their only purpose and
thus bear the risk of engendering economic turmoil. Foreign corporations, lacking an
understanding of local culture, might also fail to consider the influences of their decisions
towards the harmony of the society.10 2 Thirdly, foreign investors in agriculture may have little
incentive to promote land reservation programmes, which are quite vital for the productivity
and sustainability of agricultural land.10 3 Furthermore, it is quite likely that aliens might intrude
on the local scene and irritate a peaceful and integrated community. Aliens may have different
ideas concerning neighbourly relationships, the private aspect of property, environmental
protection, employment and tenant relations, which all have extensive social influences. 0 4 The
incompatibility with the local community, due to different social and historical backgrounds,
may push them to inject their own preferences and experiences and, if they affect the
10 5
community on a broad scale, this may threaten its whole structure.

As the foregoing analysis indicates, allegiance is characterized mainly as being natural-

born, as embodied by Hume's arguments, and through the qualities of permanence and
absoluteness, presumed by Montesquieu republicanism. These three characteristics of
allegiance and their coherence with citizenship will be discussed respectively in the following
section.

3.2.2 Correlation between Citizenship and Allegiance

" For the discussion on the issue, see Oyama v. California[1947] 332 U.S. 633 (hereinafter 'Oyama v. California'),
p.665; Takahashi v. Fish Com'n [1947] 334 U.S. 410 (hereinafter 'Takahashi v. Fish Com'n'), p.417.
98 Oyama v.California,p.665.
99 Starrels, supra note 6, at 169 footnote 106.
100 Ibid.
101Ibid.
102 Takahashi v. Fish Com'n, p.417.
103 Starrels, supra note 6, at 156 footnote 47.
104 Gaffney, supra note 7, at 386.
105 Starrels, supra note 6, at 175 footnote 124.
 A Political Study on Foreign Ownership of Land

The matter of whether allegiance is a natural-born subject has been questioned for a long time.
It is argued that loyalty is a moral concept that does not occur naturally and automatically, 0 6
but rather comes about as a result of education and training.10 7 However, even training cannot
guarantee full loyalty. For a greater fostering of such a virtue, law should also be introduced as
an extra and necessary means of promoting it.10 8 Montesquieu indicates the same view when
he states that citizenship and allegiance have to be reinforced by constant public ceremony, the
removal of retroacting thoughts, and sustained training and propaganda. 0 9

As allegiance is not a natural character trait of citizens and even fostering care and
education might not guarantee desired results, citizens may still be at risk of disloyalty.110 By
the same reasoning, aliens, motivated by their individual economic or other pursuits, may show
greater deference to the government of their new country and its jurisdiction. As strangers in a
foreign land, aliens tend to respect local cultures more than local citizens do, in order to
acclimatize themselves to the new environment. Allegiance is a mental state which comprises
more sophisticated elements than simply the status of the person in question.111 Undoubtedly,
there are social, economic and cultural differences between aliens and citizens. But an over-
exaggeration of these differences and a stubborn assumption that they are unchangeable is an
unconvincing argument for justifying alien disqualifications."' Such a disqualification in terms
of alien land ownership appears to deal more with the political rather than the property
element. 1 This is inconsistent with the traditional view of taking land as private property,
which has long been rooted in both the common law tradition and the civil law system.

On the other hand, neither is allegiance permanent or absolute, especially in the context
of accelerating globalization.1 14 The logical flaw in assuming civic allegiance to be permanent
and absolute is revealed by looking at the process of immigration. Most states normally permit
citizens to renounce their allegiance and emigrate for the sake of pursuing a better quality of
life.115 This fact itself indicates that the state does not intend citizens to be subject to permanent
allegiance. It also severely questions the characteristic of absoluteness. As the citizen may
withdraw his allegiance in order to pursue a better life in another state, 16 he may hold the
intention to transfer allegiance long before formally quitting his citizenship and leaving the
territory. During that period, he is spiritually disloyal to his current state. Therefore he should
in theory be deprived of the right to own private land, since land granting is presumed to be
correlated with full political allegiance. However, he is still eligible to maintain his land
possession up until the moment he leaves the territorial jurisdiction. In truth, he holds the same

106 Walter Berns, 'Freedom and Loyalty', The Journal of Politics, 1956, 18(1): 17-27, at 25.
107 Ibid.
108 Ibid.
109 Montesquieu, supra note 21, 1.37 and 1.69.
110Oyama v. California,p.683.
111Ibid., p.666.
112 Terrace v. Thompson [1923] 263 U.S. 197 (hereinafter 'Terrace v.Thompson'), p.200.
113 Ibid.
114 See the recent nationality theories, e.g., David Miller, On Nationality (Oxford: Oxford University Press, 1995),
p.156; David Jacobson, Rights across Borders: Immigration and the Decline of Citizenship (Baltimore: John
Hopkins University Press, 1996), p. 8 .
115 Franklin, supra note 18, at 419.
116 Ibid.
 MJIEL Vol. 12 Iss. 2 2015 Xiaojing Qin

degree of allegiance as an alien during this period, but is treated very differently. From this
perspective, the citizenship standard does not truly reflect the moral idea of allegiance as it fails
to accurately and precisely reflect people's minds. Taking citizenship as the standard for
differentiating between those who are trustworthy and those who are not will undoubtedly be
misleading and unjustifiable.

The ever-growing international market has influenced individual consumption and

lifestyles and it is increasingly felt that these are becoming more alike across the integrated
world.11 Such cultural uniformity is making people define themselves increasingly in terms of
groups and communities, regardless of their national identity. 18 As people within the same
borders could develop various moral values, which might not be consistent with the state's
expectations, people may renounce their allegiance and citizenship in the pursuit of their own
cultural identities. In this process, the idea of a territory and its borders has gradually lost its
moral relevance in governing people.

The ongoing trans-national migration has also steadily eroded the traditional basis of
national citizenship as immigrants' rights in their host states are increasingly attenuating the
idea of domestic citizenship. 19 This change is attributed partly to the continuing convergence
at the world level and partly to the increasing codification of individual rights into international
human rights law, premised on the basis of universal personhood1n ° The institutions of the host
states have all started to respond to this reality and adjust their domestic policies by granting
permanent aliens certain rights which used to be assigned exclusively to their own citizens,
even including some forms of political rights. 121 In this process, national citizenship is
gradually losing ground to the broader supra-national notion of individual rights, with
traditional national identities being extended from a national context to a more flexible and
broader community.122 The traditional implications of belonging and loyalty are turning out to
be increasingly problematic as people are expanding their political ties from within the state to
the broader scope of trans-national institutions.12 3

As citizens define their identities outside their own state and foreigners accommodate
their identities into that of their new adopted state, national loyalty and allegiance have
gradually diminished, and it is increasingly hard to identify individual state cultures. Whether
global politics will follow such a trend might still be hard to predict, but in terms of the rights
which matter to people's economic proliferation, the strength of national identity and allegiance
has apparently diminished. Some rights, which were previously treated as allegiance-related
rights, have been redefined so as to facilitate their exchange in the international market. Land,
in this process, is treated more as 'real estate' and its transactions are made into free choices
and contractual bargains between people, barriers to which constitute interference with the
efficient movement and distribution of natural resources in the global environment. Many

11' Miller, supra note 114, p. 15 5 .

118 Ibid., p.156.
119 Jacobson, supra note 114, p. 8.
120 Ibid., p.2.
121 Ibid.
122 Ibid., p.3.
123 Ibid., p.2.
 A Political Study on Foreign Ownership of Land

national states have gradually released their restrictions on land ownership towards aliens in
this process, even including some socialist states which used to believe that the maintenance of
public ownership of land was one of the most powerful guarantees of their socialist polity.
China and Cuba are two examples of this. To accommodate the interests of foreign investors,
China, where land was previously expropriated by the state, has since the 1980s privatized land
usage to facilitate the conveyance of land-use rights for commercial users.124 Although Cuba
has not codified key issues, such as land ownership and selling rights, foreign developers may
form real estate joint ventures with Cuban companies to undertake either commercial or
residential property development. 12 5 The ownership is understood to be already enshrined in
the agreed joint venture contracts and is enforced in practice.126 On the other hand, such a trend
of land market liberalization has also influenced the land policy-making of developed states
and super-national organs. The US currently imposes few stringent policies or screening
mechanisms on foreign investment in real estate. 12 After previously permitting foreign
companies and corporations to acquire land in Japan, the Japanese government further granted
individual foreigners the right to own land on the same footing with Japanese nationals, in
2001.128

4. CONCLUSION

In this paper, the arguments against the link between territorial integrity and land ownership
have been discussed by examining the correlation between land and territory, the correlation
between territory and statehood and the correlation between citizenship and allegiance. The
arguments fail to hold up under scrutiny, all suffering from some theoretical and practical
weaknesses. Among these, the idea of international political and economic integrity constitutes
the common reason for devaluing all three proposed correlations. In terms of the correlation
between land and territory, the capital market has diversified the options for wealth possession
and the implication of land as a key to gaining political privileges has thereby been greatly
diluted. In terms of the correlation between territory and statehood, economic globalization has
compelled states to change their traditional understanding of territorial borders. In this process,
states' policies concerning territorial control are more and more subject to the changeable goals
of the states rather than defined limits to sustain sovereignty. In terms of the correlation between
citizenship and allegiance, the ever-growing international market has made people increasingly
expand their political ties from the state to the broader scope of trans-national institutions. The

124 See Yongheng Deng, Della Zheng and Changfeng Ling, 'An Early Assessment of Residential Mortgage
Performance in China', Journalof Real Estate Finance and Economics, 2005, 31(2): 117-136.
125 Pascal Fletcher, 'Foreign Investors Prise Open Cuba's Real Estate Market: Pascal Fletcher Sees Joint Ventures
with Foreigners Sanctioned in a Cautious Relaxation of Residential Property Market Rules' Financial Times (14
June 1988) http://search.proquest.com/docview/248669383/F6139A134D946A6PQ/1?accountid=12253, accessed
10 January 2009, p. 6.
126 Pascal Fletcher, 'Investors Eye Property Marketplace' FinancialTimes (24 March 1999) http://search.proquest.
com/docview/248709793/1817069AEiD24FEOPQ/1?accountid=12253, accessed 10 January 2011, p. 2 .
127 Gary E. Herzlich, 'Monitoring Foreign Investment in United States Real Estate', Boston University International
Law Journal,1983, 2:29-49, at. 29.
128 Anonymous, 'In Our Pages: 100, 75 and 50 Years Ago 1926: Japanese Land' International Herald Tribune (19
December 2001) http://search.proquest.com/docview/316880114/E8C5A527C6514F5FPQ/1?accountid=12253,
accessed 20 January 2011.
 MJJEL Vol. 12 Iss. 2 2015 Xiaojing Qin

increasing codification of individual rights into international human rights law has also
reinforced the practice of offering non-nationals more freedom at the state level. Consequently,
some land rights which were previously treated as allegiance-related norms have been redefined
to recognize the equal right of foreigners on this subject. Such an evolution derives from the
state's desire to deeply integrate its domestic economy into the global economic system. The
deeper the connection between domestic and global economic systems, the more the state has
to take the interests of alien investors into account in its policy making process. Therefore, the
continuing integration of domestic economic and political policies into the global system might
be the strongest force promoting the liberalization of alien land ownership thus far. The deeper
the connection between domestic and global economic systems, the more states will take the
interests of alien investors into account in their policy-making. 29 In other words, if a free real
estate market is to be established, the trend of globalization has to be further advanced.

129 Cohen, supra note 9, at 91.