The reemergence and growth of private higher education institutions (HEIs) represent one of the most significant developments in Chinese higher education over recent decades. Against a macroeconomic background of decentralization, this phenomenon is essentially fuelled by a broad spectrum of political and socioeconomic forces. This study sets out with the primary aim of discussing the current policy environment constraints faced by different types of private HEIs based upon a theoretical framework of property ownership rights. This is undertaken through a comparative analysis with HEIs in the United States, as well as case studies on three different types of private HEIs in China (accredited private universities, independent colleges and Sino-foreign colleges). Recommendations are offered on the key issues aimed at overcoming the difficulties encountered by such institutions; these include transfer rights, income rights, government subsidies, access to bank loans and tax-exempted social donations. The government in China has adopted an incremental approach to the regulation of the private higher education sector, thereby providing "ad hoc" solutions to problems encountered along the way; however, within a mutually understood framework of action, a system of clear property ownership rights is essential to the practical coordination of the activities of the economic actors.