Entering into WTO offers both opportunities and challenges to the Chinese contractors for adapting themselves to the international construction market, therefore, the Chinese contractors shall seize the opportunities and improve their competitive positions.

On the base of describing the police background of "separating secondary lines of business from core business and turning secondary lines into independent companies" for state-owned large and medium construction enterprise, this paper analyses the importance and necessity of "separating secondary lines of business from core business and turning secondary lines into independent companies" .

In accordance with the special characteristics of state medium-sized construction enterprises and their reform objects of "having a free hand and enlivening", the suitable objective model, the stock cooperative system for state medium-sized construction enterprises has been put forward in this paper by analyzing the system mechanism of stock cooperative system enterprises.