Not only does the state own the majority of the country’s land, Chinese citizens have limited rights on how they can invest their money. For instance, they are unable to invest in foreign markets, they can’t save their money in banks because of the low interest rate returns, and they can’t invest in their own country’s stock market. All these regulations are the leading cause of china’s big housing bubble, possibly the biggest economic bubble in the world.
The pollution you see in china is a creation of government. Since the people of china do not own their land, they do not have any moral or business obligation to keep their communities clean. Normally, in a free-market with individuals owning their property, if a business was causing waste in their area, at some point they will be obligated to clean up their waste and to restructure the business process.
A business that causes environmental damage to the community can experience blowback from the public. Not to mention, the waste itself can be costly, not from just a lawsuit perspective but also in the form of inefficiency as well. When a lot of waste is produced it usually means that the production process isn’t very efficient. Take for example, in the early days of oil drilling. Oil men would randomly drill several spots in attempt to strike oil. As they manage to find oil, the oil would rush out into the air, spilling and wasting hundreds of gallons of oil on the ground. When John D. Rockerfeller became an oil man he believed this process was inefficient as a lot of oil was lost the moment it was found.
As for the china problem, the Chinese have no interest to fix a problem that does not belong to them. The responsibility should fall onto the state to fix the polluted mess that China is in. But even the state doesn't feel obligated to do so. The state doesn't fix environmental problems, they only cause them. Individuals who take ownership of the land will take pride and responsibility to keep it up. Besides what individual would not want to keep their land clean and stable? Stable and clean land can have tremendous value, however; if it has not been kept up, no one would want to purchase it. It’s like looking for a house; no one would purchase a nice beautiful house if it is sitting on rotten land or if the neighbors are unwilling to keep up their own land. Individual rights to property ownership hold the owner responsible of his property. Whereas, government ownership of property holds no one accountable, instead it becomes a moral hazard.