Abstract: China is in a period of social transition. The protection and development of stateowned forest resources and the socioeconomic progress of stateowned forest areas are facing important opportunities as well as challenges. Social transition promotes institutional change, and consequently leads to the innovation of stateowned forest management. The major issues of innovation of stateowned forest management are accurate and clear understanding of three questions, i.e. what is stateowned forest? Who should manage the stateowned forests? How to manage the stateowned forests? Efforts should be made to develop and improve stateowned forest management legislation. Bottleneck problems of stateowned forest management should be solved, and new environment should be created for stateowned forest management to provide better service for national economic and social development.