The need had been felt for some time and the NPC finally delivered. The government instituional reform and functional transformation are in part a response to the demands of the public as also a part and parcel of the reforms process. In particular, the process to delink the market from the government.

Li Yining, Economist & CPPCC Member, said, "The reason why people are excited about the streamlining of government ministries is that it deals with the relationship between the government and the market. Many people believe that the government’s powers in approving businesses and projects are too complicated. This has dampened the vitality of private enterprise and hampered many projects."

The era of government control on the economy is over. The market needs a free rein over economic activity. Monopolies can be broken through administrative restructuring and a clear dividing line is required between the government and the market. This will empower the market and unleash the dynamics of the private sector.

Gu Shengzu, Vice-Chairman of China National Democratic Construction Assoc., said, "The key to all the reforms lies in reforming the government itself, so as to achieve a better relationship between it and the market. In the midst of dealing with the global economic downturn, the central government is holding too much power. It needs to decentralize and hand over control of those things that it shouldn’t have been managing in the first place."

Analsyts say this institutional reform will be the prelude of the overall economic reforms. A reform plan, road map and timetable is expected later this year, complete with a 2013 guideline on reform of the economic system.

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