Introduction

Abstract

In the process of China’s market-oriented reforms, the private sector is undoubtedly an important driving force for regional economic development and urbanization. Urbanization is also an important carrier for and engine of regional economic and social development. The private sector in southeast China coast area has been able to effectively and continuously promote the urbanization process, stimulating economic and social development, the reason was and is that the private sector’s development and growth is spontaneously in line with the market rules. China’s inland provinces should respect the market laws and let market play the fundamental roles in resources allocation, so as to promote local development or private sector and urbanization process. Addressing regional disparity and income inequality in development, there have always been two paths of welfare improvement and economic development. In the case of China, the Central Government should take more obligations of social welfare and social security, local governments should follow the goal of market-oriented reforms outlined by the central government, spending more efforts to promote the development of private sector and the new type of urbanization. Fiscal reforms will play a more active role in the private sector development and urbanization, and the tax incentives and the equalization of public finance are the key points for institutional design of the fiscal reforms.We also have to pay attention to environmental protection and resources conservation while relying on private sector development promoting urbanization. We also have to attain a sustainable development of ecology and economy, and only in this way could China maintain the engine of a sustained economic growth.