Why did China adopt a property rights law in 2007?

China promulgated its first property rights law in 2007 to establish a more secure legal foundation for its growing urban middle class and private entrepreneurs. This legislative move followed the country's transition to market-oriented economic policies, which began more than 25 years prior.1

The law was specifically designed to align with China's hybrid socialist-market economic system, which maintains public ownership as the dominant force while allowing diverse forms of ownership to develop alongside it. By formalizing these rights, the government aimed to provide legal clarity within a dynamic economic order, acknowledging that the legal framework would likely continue to evolve.1