Reform of the economic system in China, with reform in cities as its focus, is being unfolded across the country. At this takeoff moment of the reform, the question of what measures are to be taken in order to ensure an even and smooth transition from the old mold to the new system naturally commands attention. The historical experience of many other countries shows that the success or failure of such a reform hinges on the correct handling of this issue. Therefore we must study the problem in good earnest.