On October 10, the State Council released a statement on its website announcing it would delete or modify 314 requirements in order to remove obstacles for the country's social and economic development and curb corruption.

This round of reductions was the sixth of its kind since reform of the administrative approval system kicked off in 2001.

Figures from the State Council show that a total of 2,374 administrative approval items have been rescinded or adjusted since 2002, marking significant progress in the reform effort.

According to the statement, the reductions mainly focus on three fields: first, cleaning up approval procedures for investment, especially investment in the real economy, small and micro-sized enterprises and private investment; second, intensifying efforts in reducing and modifying the approval procedures of social projects, such as education, medical care, culture events and public services; and third, canceling items that shouldn't have been included in the administrative examination and approval system.

The most appealing highlights in the statement are as follows: Governments should refrain from projects that citizens, corporations or other organizations can handle independently. It should also refrain from interfering in matters that market competition can effectively sort out or industrial groups and agencies can manage.

In the statement, the State Council hailed the administrative approval reform for forcefully pushing forward the transformation of government functions, strengthening the market allocation of resources and boosting lawful administration.

The reform is also seen as an effective measure for improving the government's efficiency and fighting corruption. It should be combined with other reforms concerning investment, financing, taxation and administrative management in order to better organize relations between the government, enterprises and individuals.

Without a doubt, the move, if successfully implemented, will be a huge benefit to the Chinese market because it shows the government is willing to step aside to let the market function freely. It's the right time for the State Council to clean up its administrative approval system.

Right now, China's economic development is at a crossroads. The demographic dividend, which led to fast development during the past decade, is coming to an end. Previous development models have proven to be unsustainable and a new growth momentum is badly needed. Since the beginning of 2012, a slowing economy has shown that the dilemma faced by Chinese companies is caused not just by changes in economic cycles, but also an insufficient market-based mechanism and excessive government intervention.

The over-regulated administrative approval system has taken the steam out of the market. In light of this, the Chinese Government made corresponding changes to better spur the economy. The move is bound to boost productivity in a slowing economy.

Whether the ambitious reform can come to fruition mainly depends on government's ability to hand over power. Implementing reforms in China is often like taking two steps forward and one step back.

However, judging from the current economic and social reality, this can't happen. Reforms are needed to keep up with economic and social demands. Reforms on state-owned enterprises and the government are the hardest. We should nonetheless push forward those reforms because we are at the point of no return.

This is an edited excerpt of a report by Anbound, a Beijing-based research company, published on the website of Caijing magazine