The clear demarcation of property rights is no longer purely an issue of academic interest in China. To a large extent, it has already become a vital policy and legislative concern. In President Jiang Zemin's 1997 report to the 15th CCP National Congress, "readjusting and perfecting" China's ownership structure was made a fundamental strategy to build an efficient socialist market economy and to maintain sustained economic growth. Shortly after this policy breakthrough, the drafting of a comprehensive Law on Real Property Rights (wuquan fa) was put on the working agenda of the Legislative Affairs Committee of the National People's Congress (LAC) in 1998. Two teams of civil law scholars were entrusted with working on drafting the law. One team was led by Professor Huixing Liang of Chinese Academy of Social Science and the other by Professor Liming Wang of Chinese People's University. The two teams each submitted a proposed draft to the Legislative Affairs Committee. In 2001, the two proposed drafts were combined into one and the resulting LAC draft (zhengqiu yijian gao) is currently being circulated for comments. Of the many legislative objectives the new law is designed to achieve, clarifying property relationships among various economic actors is the overarching goal of the proposed law.

The need to improve China's property rights regime was reiterated at the 16th CCP National Congress recently adjourned on November 14, 2002. At this time, the call for normative and institutional perfection was accompanied by some more refined policies on critical issues such as 1) the relationship between public and private ownership, 2) the roles of central and local governments with respect to state ownership, and 3) the essential layout of the state's commitments to pluralize the ownership structure of public assets and to protect individual private property (siren caichan)." Though mostly incremental, these latest policy developments provide specific guidelines to untangle some perennial sources of ambiguity that have been baffling Chinese property lawmakers.

Some of these policy developments are solidified in China's latest constitutional amendments. On March 14, 2004, the second plenary session of the tenth National People's Congress adopted thirteen constitutional amendments. Among them, three amendments directly relate to the perfection of property rights. First of all, individual private property rights are sanctified. All legal private properties of citizens (gongmin de hefa de siyou caichan), regardless of forms, are explicitly made inviolable. Secondly, the status of non-public economic sectors have been further elevated. Non-public sectors are not only protected but also specifically encouraged (guli) and supported (zhichi). Thirdly, government expropriation of lands and private properties is now provided for in closer detail. Expropriation is sub-divided into taking with ownership change (zhengshou) and use without ownership change (zhengyong). In either case, compensation must be made. The significance of these constitutional amendments is not merely symbolic; they serve as a constitutional base for future property law-making.To a certain extent, China's recent legislative efforts to clarify property rights tend to rekindle interests ignited by her fast economic growth over the past two decades in the absence of a clearly defined formal property regime. While China's past economic success seems to challenge the neo-classical hypothesis that a formal property institution with clearly defined property rights is essential to the functioning of a market economy and sustained economic growth, the recent clarification movement suggests a causal link between the clarity of property rights and market efficiency. This paper attempts to investigate the relationship between property institutions and economic development through a survey of the institutional changes of property rights in post-Mao China.