VAT reform: a critical step in China's supply-side reform

The VAT reform helps align China's tax policies with international,universal standards, and allows enterprises to expand their businesses in a more unified tax environment, which means a remarkable improvement in business environment, he said.

In fact, VAT reform constitutes only a part of China's reform packages. Since May 2013, China has issued more than 20 policies to promote entrepreneurship and innovation, including some concrete measures such as expanding market access, lowering taxes and fees, and broadening financing channels, Bloomberg reported.

China's economy has reached a crucial point where supply-side reform is imperative, as the old impetus has been gradually weakening and the policies to stimulate development have become less effective. So, the government is expected to push through reforms based on rising domestic demand, including streamlining administration and encouraging innovation, to guide China's economy transition in a right direction.

Reform is to unleash the market, make way for innovation and let the market play a decisive role, thus benefiting entrepreneurs, investors and ordinary people.

By unleashing people's creativity and enthusiasm, China can overcome the pressure and complete economic reform, said Chinese Premier Li Keqiang.