Abstract

This article shows that major private property rights in the school sector, as predicted for a market economy by the classical property rights theory, have been emerging and have been gradually refined in the economic transition of China between 1978 and 2003. This paper finds that these conditions are a result of the incremental introduction/refinement of state policy and law in education over the more than two decades of transition, which are responding to the transition’s increasingly strong demand for the efficient use of resources in school that is absent under the communal ownership of schools in the planning period. To cater for such gradual change in mindset in the school sector as well as in the economy, this paper identifies additional areas requiring appropriate policy and law changes in education for a much better and more efficient transfer of an increasing proportion of schools to the private school property rights system in the nation’s ongoing transition. These areas include: the absence of the transferability right of a school, the need for maintaining the clarity of school property rights, and the need for assets revaluation of schools which are owned with state funds from state-owned enterprises, economic collectives, and/or government institutions.