For China with a complex and large capital system, we could not imagine that a highly centralized approach could work without a layered management mechanism featuring clear responsibilities and adequate capital operational capacities. Under such circumstances, owner-agent relationship of state-owned capitals thus became crucial. Since Chinese people are the real owners in essence, how could we realize such ownership? To whom to consign responsibilities?
Through what kind of organizational structures, corporate governance structure, checks and balances, including competitive and incentive mechanism? Establishing holding company looks like a good solution. Different holding companies may compare their performances, thus resulting in different incentives. Holding companies could have diverse capital structures and go public to improve efficiencies through public monitor.