The proposed bill caused quite a stir since it was first published in 2002, was subsequently deferred, and yet again failed in its reading at the National People's Congress (NPC) of 2006 because of disputes over its content.

Legal scholars, notably Gong Xiantian of Peking University, argued that it violated the constitutional characterization of the PRC as a socialist state.

[4] The law was adopted on March 16, the final day of the two-week session of congress, with the backing of 96.9% of the 2,889 legislators attending, with 2799 for, 52 against, and 37 abstentions.

"This Law is enacted in accordance with the Constitution for the purpose of upholding the basic economic system of the State, maintaining the order of the socialist market economy, defining the attribution of things, giving play to the usefulness of things and protecting the property right of obligees."

However, in formalizing existing practice, individuals can possess a land-use right, which is defined in Chapter 10 of the law.

Some press reports have characterized this law as the first piece of legislation in the People's Republic of China to cover an individual's right to own private assets,[6] although this is incorrect as the right to private property was written into the Constitution of the People's Republic of China in 2004.