This article identifies the problems and malfunctions of the Chinese apartment ownership regime that necessitates its formalization. The benefits of formalizing the apartment ownership, such as resolution of the social housing problem, and establishment of the mortgage-backed real estate market, are presented. Thereafter, we indicate that the success of formalizing apartment ownership in China depends on one hand on the extent to which the unique property market in China can be reconciled with acknowledged ways of dealing with apartment ownership in various other jurisdictions acting as comparative examples. On the other hand, simply grafting borrowed laws or legal institutions into a new context cannot achieve the desired effects. Legal culture matters and it cannot be downplayed in the formalizing process. Our conclusion is that the booming but immature Chinese apartment ownership market will benefit greatly if the casual link between the market economy and well-defined property rights are confirmed through legal formalization.
