Dialogue mechanism

The government needs to further open the public services sector and encourage social forces, such as NGOs, to participate in the provision of public services. A dialogue mechanism should also be established to strengthen communication between government and society at large.

Public expectations for better living standards now revolve around high-quality housing, a higher standard of education and cleaner air, a much more demanding set of priorities from 20 years ago, when most people simply wanted warm housing and sufficient food, said He.

"The focus of institutional restructuring should gradually shift to building a harmonious relationship between the State and society, from rationalizing the relationship between the government and market," she said.

Departments providing social services accounted for 35 percent of State Council departments in 2007, while it was less than 30 percent in 1982, she said.

China still has much to learn about social management. "It seems to be more important than just financially helping some poor families. The government has to be able to use the funds collected through taxation to benefit the entire population," according to Jia at Tsinghua University.

The reform of government still has a long way to go. "Putting power in the cage of regulations" will require the government to become more open and transparent, said Chi.

Also, the ambiguous boundaries between the powers of the decision-makers, the administration and monitoring unit could be a breeding ground for corruption, he said.

While the government has set a target of completing the new administrative system by 2020, it has to push the process forward gradually in the coming years, Chi added.

The fresh round of administrative reform will upgrade China's role as a magnet for global investment and a destination for exports, according to the founder of a leading European consultancy on political strategy and policy development.

Greater streamlining of government institutions would help increase the global presence of Chinese businesses, said Peter Guilford, executive chairman of the g+ consultancy, which operates from offices in London, Brussels, Paris and Berlin.

"We are quite convinced that the reforms are a move in the direction of releasing the sustainable potential of this huge economy," Guilford said, adding that a more efficient and clear administrative central government structure would further improve investor confidence and provide reassurance. To that end, he said, his company will establish branches in Beijing and Shanghai in the near future.