According to Liu Zhibiao, a sociologist at Jiangsu Academy of Social Sciences and a member of the CPPCC National Committee, "The government's blind industrial development policies distort market relations, causing overcapacity and daunting environmental pollution.

"Some local governments actually have already decided which firms are the winners before tailoring their well-targeted industrial policies," Liu said.

"If the government really wants to let the market play a 'decisive' role in allocating resources, it must leave the territory it invaded, replacing its 'positive' list' with a 'negative list'," Liu added.

Cai Ling, another CPPCC National Committee member, said State-owned enterprises should not hide their identities because "SOEs' investment in overcapacity industries and their pollution is quite large, and the preferential policies enjoyed by SOEs stifle private competition."

To the advisers' disappointment, no representatives of the State-owned Assets Supervision and Administration Commission attended the meeting.

The advisers argued that SOEs should get professional capital management advice and the SASAC should merely be an administrative consultant.

"Once the SOE executives gain a sense of capital, they will oversee the return on their investments," echoed Li Wei, another CPPCC National Committee member.

Some advisers also felt the government should think about transferring the overcapacity industries oversees and to less-developed areas of western China.

But ministry representatives hinted that the proposal would need the coordinated efforts of different departments and could not be handled by individual ministries.

Steel sector still facing profitability problems	China's economy grows 7.7% in 2013