Li Tie, director of the China Center for Urban Development, speaks at the China Smart City Innovation Conference 2016 held in Jinan, East China's Shandong province, March 24, 2016. [Photo provided to chinadaily.com.cn]

Smart city development should be market-driven rather than government-driven, a government official said Thursday at a conference on urban development.

During the development of a smart city, government should allow the market to play the leading role because businesses are more cost-effective than government, said Li Tie, the director of the China Center for Urban Development, while attending the China Smart City Innovation Conference 2016 held in Jinan, East China's Shandong province.

Li added that money is not a problem in smart city development because there is a great deal of investment seeking profitable start-ups and ideas.

He cited marathons as an example.Increasingly popular marathon events attracted more than 1.5 million participants last year, creating a huge demand for sports-related clothing, shoes and transport. This demand can only be met by the market, not the government.

Rather than playing the player's role, the government should coordinate the conflicts between traditional industries and new ones, like that between the taxi industry and emerging car-hailing services, Li said.