Developing a mixed economy by the mixed ownership reform in SOEs (State-Owned Enterprises) is a significant step to deepen the reform across the board as proposed by the Third Plenary Session of the 18th Central Committee of the CPC and to innovate the mechanisms and institutions. However, the reform to introduce mixed ownership faces two major but interwoven challenges. First, how the state capital can be allocated in a scientific way and challenges be addressed adequately. Second, how corporate governance can be improved, such as the improvement of the board of directors and how to incentive managers efficiently in mixed owned enterprises. As the two challenges are interwoven with each other, any study on the reform to introduce mixed ownership needs to pay particular attention to those two questions. In seeking answers to these two questions, the book approaches the management of state capital from three aspects. First, the philosophy should be shifted from managing asset to managing capital. Second, the reform of and regulation on state capital should be implemented by category. Third, recommendations are proposed on building a renewed model of state capital management by learning from the practices abroad and reviewing the challenges at home.