Washington International Law Journal


Since the early 1980s China has embarked on an ambitious program of reform in the systems of urban real property rights and allocation. In many respects, these reforms recall the policies of private property rights protection which prevailed in the early post-Liberation period of P.R.C. history, but which were subsequently abandoned in the Great Leap Forward and Cultural Revolution. In the intervening thirty years, however, the system of "public" urban housing ownership and allocation deteriorated to such an extent that no one—neither the state, its agents, nor private individuals—had sufficient incentives to increase or even preserve these resources. Faced with the widespread shortages and allocative crises, the reform leaders have again realized that enforcement of substantial property rights is an essential prerequisite to the investment in and conservation of real property resources. This Article will utilize an economic theory of property rights to analyze the P.R.C.'s system of urban housing rights as it has evolved from Liberation through the modem reforms. It concludes that although the modem reforms have made major progress toward establishing a more rational system of property rights in urban housing, further progress will require still larger investments of political and economic resources. This is because the modem housing rights reforms imply nothing less than market allocation under the rule of law, while administrative allocation under the rule of local bureaucrats is the norm inherited from the past. In short, the housing reforms are dependent upon parallel reforms across the range of legal-institutional factors impinging on property rights.

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