[2] This article is dedicated to the 25th anniversary of the promulgation of the Administrative Procedure Law and its first major revision!

Part One: "Tuhao" Guo Moumou and His "Sea Palace"

5. Legal Void

"Rule of law" is a modern concept of national governance that has been gradually developed and established in response to the needs of a market economy and civil society over decades of China's reform and opening-up. Its core is to protect the private rights of the people through law while restraining the public power of the government through law. The so-called rule of law means that for the people, "whatever is not prohibited by law is permissible," and for the government, "whatever is not authorized by law is not permissible." Chinese society has a tradition of rule by man and autocracy spanning thousands of years, and the Chinese people are accustomed to living under such systems. Embracing and practicing this modern concept of rule of law wholeheartedly undoubtedly presents a huge challenge. "Under the vast heavens, all land is the king's; within the borders, all men are the king's subjects." For millennia, these lines from the Book of Songs have been used to describe such an autocratic tradition: every blade of grass in the world belongs to the state; every move of the masses must obey the state's arrangements. The extreme expansion of state power inevitably leads to extreme suppression of individual rights and freedoms, resulting in a lack of creativity among the people and a loss of vitality in society to create wealth.

After several explorations and experiments, the technical difficulties of building floating island structures at sea have been resolved, and the substantial funding required is not a problem for a certain Guo. However, one issue has persistently troubled him, casting a lingering shadow over his mind. As a successful entrepreneur who grew up in China's far-from-perfect legal environment, Guo initially placed great emphasis on the legal risks of the sea floating island project. Unfortunately, he encountered a legal void, like sailing a ship into unfamiliar waters without navigational markers, full of shoals and hidden reefs, forcing him to grope forward, and if hit by a storm, the ship could easily sink.

It is well known that China has established a relatively comprehensive legal system for land ownership and utilization, centered on the Land Administration Law of the People's Republic of China, with three pillars supporting this legal framework: public land ownership (including state ownership of urban land and collective ownership of rural land), land use rights system (including state-owned land use rights and rural collective land contractual management rights), and land use control system. The basic principle of China's land use control system is that the state formulates a general plan for land use, designates land uses, and classifies land into agricultural land, construction land, and unused land, strictly restricting the conversion of agricultural land to construction land, controlling the total amount of construction land, and providing special protection for arable land.

The Sea Area Use Management Law of the People's Republic of China, implemented on January 1, 2002, established a legal framework for the ownership and utilization of sea areas similar to that for land, correspondingly including three pillars: the state ownership system of sea areas, the state-owned sea area use rights system, and the marine functional zoning system. According to this law, sea areas (including the internal waters, territorial sea internal waters, surface, water body, seabed, and subsoil of the People's Republic of China) are owned by the state, with the State Council exercising state ownership on behalf of the state. Meanwhile, the state manages the use of sea areas through the marine functional zoning system. Any unit or individual using a sea area must comply with the marine functional zoning and legally obtain sea area use rights and pay sea area use fees. The rights of sea area users to lawfully use the sea area and obtain benefits are protected by law, and no unit or individual may infringe upon them. This law provides a seemingly complete legal framework for sea area use, but traditionally, human use of offshore sea areas, aside from shipping, mainly involves fishing and aquaculture. The former is primarily regulated by the Maritime Traffic Safety Law of the People's Republic of China and its supporting regulations, while fishing and aquaculture activities are mainly governed by the Fisheries Law of the People's Republic of China and its supporting regulations. Therefore, methods of sea area use beyond traditional shipping, fishing, and aquaculture, which are still in the exploratory development stage, lack clear and specific supporting regulations, and the related sea area use rights are far less sought after than state-owned land use rights.

Inspired by marine fish rafts in 2003, Guo Moumou decided to build an experimental small sea house without initially going through any legal procedures, because at that time, the Dongshan Bay sea area was used by coastal fishermen for mariculture, and the fishermen told him that building a marine fish raft required only an aquaculture license and no other approval procedures. Throughout Guo's experimental construction process, no marine fishery management authorities intervened.

It is necessary to add here that, in the legal terms of the Sea Area Use Management Law, the marine functional zoning of Dongshan Bay was still a traditional offshore aquaculture area. According to Articles 11 and 12 of the Fisheries Law, the people's government at or above the county level should issue aquaculture licenses, prioritizing local fishermen for aquaculture production. However, at that time, due to rapid urbanization, seawater pollution in the coastal areas of Shenzhen, and the siphon effect of high-income urban jobs and business opportunities on fishermen, offshore aquaculture in Shenzhen had become unsustainable and existed in name only. Just as rapid urbanization inevitably transforms low-output agricultural land around cities into high-output industrial and commercial land, the marine functional zoning of Dongshan Bay would inevitably shift from offshore aquaculture functional zones to offshore leisure and entertainment functional zones that could meet the growing recreational, entertainment, and tourism service needs of Shenzhen's urban population and create higher value. The problem is that the improvement of laws and regulations and government management measures always lag behind market development. Guo's innovative endeavor was both a trend and ahead of its time, but plagued by severely lagging laws, regulations, and government management. It may have been fated that he would later suffer hardships and even tragedy!

In 2004, as technical issues related to the floating island were gradually resolved, a grand plan to develop high-end tourism using the new model of "sea floating construction for sea use" took shape. Guo Moumou then submitted a sea use application to the Ocean Bureau of Longgang District, Shenzhen. The bureau attached great importance to his application and invited him to hold a report and demonstration meeting at the district ocean bureau. According to Guo's recollection years later, attendees included Director Luo Dingwen, the deputy director in charge of islands and sea areas, and Captain Dai Yuru, in charge of the fishery administration team. At the meeting, leaders highly praised Guo's development plan. In particular, Director Luo Dingwen's words deeply moved Guo: "The eastern sea area and its residents are very poor, with no land, and even fishing cannot sustain them. If you take the lead in developing tourism here, I, on behalf of the local fishermen and villagers, thank you!" Greatly encouraged, Guo immediately submitted a feasibility development report to the district ocean bureau.

Because building a floating island was a pioneering method of sea area use and the project required significant investment, the Longgang District Ocean Bureau asked Guo and his team to submit the report to the Shenzhen Municipal Ocean Bureau. After listening to Guo's project presentation in the municipal ocean bureau's conference room, Deputy Director Liang Junqian, Director Pan Weiming, and about a dozen others highly praised their project concept and promised to quickly study relevant regulations for marine projects before processing the sea use procedures. A month later, the municipal ocean bureau responded that, due to incomplete laws and regulations for approving floating sea structures and no precedent for issuing sea area use rights certificates for such structures, formal approval procedures for sea area use rights could not be processed temporarily. They suggested that Guo and his team first cooperate with Dongyu Village, which held sea area use rights in the area.

While the recognition and praise from government leaders at all levels are certainly gratifying, the lack of an official legal permit leaves Guo somewhat uneasy. However, the commercial plan and artistic dream of the floating island are too enticing for Guo to give up easily. He instructed his subordinates to further study relevant regulations and also looked into the policies of the Shenzhen municipal government from that time, which allowed the development of "short, fast, and efficient" projects in surrounding sea areas to boost the economy of nearby impoverished counties and regions. This finally strengthened his resolve, and in 2007, he invested in establishing "Shenzhen Marine Elite Entertainment Co., Ltd." (Figure 15). Under the company's name, he signed a 25-year cooperation agreement with Nan'ao Dongyu Village (Figures 16, 17), stipulating the use of approximately 100,000 square meters of sea area where Dongyu Village holds the right to use, for developing recreational fishery tourism projects. The company pays Dongyu Village an annual sea area usage fee of 80,000 yuan in the form of rent.

Figure 15: Business registration information of Shenzhen Marine Elite Entertainment Co., Ltd. (Source: Screenshot of the online inquiry result of commercial entity registration and filing information from the Shenzhen Market Supervision Administration)

　Figure 16: Page 1 of the "Cooperation Agreement" between Shenzhen Marine Elite Entertainment Co., Ltd. and Nan'ao Dongyu Village (Shenzhen Nan'ao Dongyu Shareholding Cooperative Co., Ltd.).

Figure 17: Signature page of the "Cooperation Agreement" between Shenzhen Marine Elite Entertainment Co., Ltd. and Nan'ao Dongyu Village (Shenzhen Nan'ao Dongyu Shareholding Cooperative Co., Ltd.).

　　(待续)