Xi Jinping chairs the leading group for overall reform, which slashed the income of SOE managers. In August 2014 the Politburo approved a recommendation from the Ministry of Human Resources and Social Security that SOE managers' wages and perks be cut. Managerial incomes would be aligned with those of other state bureaucrats and their basic salaries were reduced to a maximum of two times the average workers' wage. With bonuses and other contractual incentives, their income would rarely exceed 5 times the average worker's wage in their firm. Stringent rules on transparency, extra-legal incomes and other benefits reinforced this lower income structure for SOE managers.

China aims to double its GDP and living standards between 2010 and 2020. The driving force of this growth is planned urbanization. This will continue to dominate the coming 13th Five-Year Plan period (2016-2020). Current state policies aim to increase the ratio of registered urban residents from 35.9 percent in 2014 to 45 percent by 2020. An urban residency permit secures access to a wide range of rights and benefits, which dramatically improve the living standards and life prospects for migrant workers and their families. But real stability for migrants requires adequate housing provision.

Two main factors have conspired to fuel runaway house prices in China: local governments need to generate income, so they lease the land to property companies; and housing is often bought as an investment rather than a home. In the last 10 years this stimulated the world biggest ever construction boom, but speculative and criminal investors exacerbated soaring house prices. To counter this process, the 12th Five-Year Plan built or renovated 36 million apartments for low-cost rental or for sale at subsidized prices - policies designed to promote rapid urbanization. However, millions of empty apartments - built outside of the state housing plan - continue to lie empty. This scandal can be resolved by forcing the owners to rent them to migrants (e.g. by imposing high taxes on empty property) or sell them to residents at low cost. This can transform excess housing inventories into productive assets and stable living environments for the masses.

In industry falling profit rates and excess capacity in many sectors mean that some companies will close, merge or restructure. In 2015 the state stimulated investment through local governments and SOEs. Allowing private investment in some state dominated sectors is often presented as a means to discipline SOE operations in a way that promotes greater efficiency. But as the "appetite grows with the eating," capitalist participation in SOEs needs to be carefully monitored - to ensure that capitalism doesn't take command of vital parts of the national economy. This would increase the risk of slipping on the rocks while crossing the river and being dragged downstream by the vicissitudes of market currents. So, even while permitting greater private investment opportunities, and promoting mass entrepreneurship, we can expect the role of government and state enterprises to continue to increase.

It is essential to improve the education and skills of the workforce and to facilitate innovation and technical upgrading. Hundreds of millions of urban migrants and their children should be the beating heart of this process. As they move into decent apartments in the cities, their quality of life must dramatically improve, not just in a material but also in a spiritual sense. The promotion of basic and advanced learning for all, and democratic participation in the planning and management of work and urban life, can become the cultural foundation of China's social and economic progress.

Heiko Khoo is a columnist with China.org.cn. For more information please visit:

http://www.ccgp-fushun.com/opinion/heikokhoo.htm

Opinion articles reflect the views of their authors, not necessarily those of China.org.cn.