Commertary: Finding a dynamic balance (4)

Therefore, allocation of State-owned capital should focus on public welfare. State-owned capital should gradually exit from general competitive sectors and should be allocated to public welfare and strategic emerging industries that will determine medium- and long-term growth of the national economy, such as energy, resources and high-tech industries.

For State-owned capital to be retained in other competitive sectors, the dividend paid to the State must be raised and then invested in social development and public welfare in order to create favorable conditions for urbanization.

The author is president of the China Institute for Reform and Development.

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