BEIJING - China will allow state-owned technology firms to use share and dividend incentives to promote innovation, an official statement said on Monday.

Effective from Tuesday, state-owned technology firms that meet specified requirements will be allowed to distribute equity, options and dividends to technical and management staff, according to the joint statement issued by the Ministry of Finance, the Ministry of Science and Technology, and the State-owned Assets Supervision and Administration Commission of the State Council.

Big firms should distribute no more than 5 percent of total equity to employees while medium and small enterprises may distribute no more than 10 percent and 30 percent, respectively.

The decision is an expansion of pilot incentive programs in some national demonstration zones for independent innovations.