Still, China's investment approval system remains extremely complicated.

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Kuang Xianming, director of the Research Center for Economy at the China Institute for Reform and Development, said the State doesn't make a clear distinction between "approval" and "notification", which has hindered many investments.

So although the NDRC has said that more than 80 percent of investments only require notification, many enterprises find the real approval process is quite different, he said.

Huang said the principle underlying the revision is to turn more items requiring approval into those only requiring notification or to delegate more items to lower authorities.

The NDRC will focus on externalities, such as the economic security implications of a specific investment, or the environmental and resource impact of an investment project.

It will leave internal issues such as profitability, funding sources and the choice of technology up to the enterprises.

Kuang said the best alternative is to replace both approval and notification with a "negative list", which means that enterprises may invest in any field that's not on such a list. The requirement for notification could be maintained but only as a formality after projects have started.

The government should also clear non-administrative approval items that are established by regulators or industrial associations beyond the scope of the laws. These items are more vague and subject to discretion than administrative approvals, Kuang said.