The social policy of increasing public welfare originated in nineteenth Century 70 in the United Kingdom, and then gradually rose in Europe. It is established by education, social security, and medical and health services policy as the core of the welfare system. Although the total size of China’s public welfare expenditure is keeping a growth trend, the spending as a share of GDP compared with developed countries still remain a large distance. Therefore, this article examines the following three questions: Firstly, how to determine the optimal scale of public welfare spending? Secondly, how large is China’s current public welfare expenditure gap? Finally, how to allocate the state-owned capital gains on public welfare expenditure gap?This paper is divided into 5 parts. The first part is the introduction, including the research background, purpose and meaning, ideas and methods, and innovation and shortcomings. The second part is the literature review, mainly for domestic and foreign research about public welfare expenditure scale and state-owned capital gains distribution analysis. The third part is the study of China’s public welfare expenditure gap. Gathering data of countries in the world to achieve a optimal scale of public welfare expenditure, then calculating the public welfare spending gap. The fourth part is the study of the state-owned capital gains and the optimal transfer on public welfare expenditure. Respectively, by setting the goal of total economic output maximization to allocate state-owned capital gains The fifth part is the conclusions and policy recommendations, conclusions of the size of public welfare expenditure in China and distribution of state-owned capital gains above puts forward the corresponding policy recommendations. |