Niu Li, senior economist with the State Information Center, a government think tank under the NDRC, said reduction and decentralization of approval requirement is a key part of the government's roadmap for progress on China's economic reform.

"The list is a good sign for both domestic and international investors and is likely to unleash new energy at corporate levels," Niu said.

In the State Council meeting in mid-May, Li said the central government will shift its focus on improving the environment for development, offering better public services and maintaining social fairness and justice, while allowing market forces to play a bigger role to unleash creative energies.

The government should work toward achieving a "small and efficient government", said Kuang Xianming, a researcher at the Hainan-based China Institute for Development and Reform.

"If the government hands over more power to the market and society, it could in turn get more revenue, such as tax revenue. Instead, too much power wielded by the government over the market could constrain economic development," Kuang said.

Yet market-based solutions cannot automatically solve all the problems facing a large developing country like China, said Hua Sheng, honorary dean of the school of economics and management under Southeast University in Nanjing, Jiangsu province.

Hua was on a key research body under the Chinese Academy of Social Sciences in the early years of reform in the 1980s.

"Maintaining a 1 percent or 2 percent growth rate was not bad for the United States and Europe, both free-market economies, indicating market forces alone do not necessarily bring economic growth or upgrade industrial operations," he said.