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Not only the model has caused many economic and social problems, but also the application conditions for the model are becoming more inappropriate for reasons as below:

1. The marginal rate of return of government investment has sharply decreased, the rent-seeking behavior has performed in a systematic way, and government enterprise groups have too much strong control over social resources.

2. The strong administrative system has become an obstacle in application of law.

3. The population as labor has become much less competitive, but the population as human capital has not become competitive.

4. The system depends too much on GDP as its officials' assessment standards and has not nurtured new assessment standards.

5. The overseas markets are becoming weak for Chinese exports, but the domestic markets still lack spending power.

People hope that a new transition can overcome obstacles and start a new period of sustainable economy growth, which is where the "new normal" enters.

To facilitate a market economy, the new generation of leaders should deal with the current status in a delicate way, since the new period has new problems.

The report on the work of the government submitted on March 5 has shown the courage to make changes.

On the one hand, the government tries to weaken the GDP growth as a universal standard and at the same time stabilize the economy. The GDP growth rate is 7.4 percent in 2014, which shows that the government tries to use fiscal and monetary policies to keep the GDP growth rate's slowdown in an acceptable range. For the same reason, the government sets 7 percent of GDP growth rate for 2015.

On the other hand, the government tries to introduce conditions for market economy in many ways, such as decentralization by cutting administrative approvals, expansion of the scope of FTA, increase access for private investment, etc.

The new normal may have many tricky problems to deal with, but the core is to provide an environment for entrepreneurship.

First, the government investment needs to quit from competitive fields. Since State-owned enterprises have strong influence, this task can be much difficult.

Second, the government needs to let the law truly become the protagonist. Market economy is based on legal system.

Third, the government needs to turn a control-oriented government to a service-oriented one. Especially, the government needs to provide law, property rights and information services.

To have a sustainable economic growth, as a guide, the government needs to respect free and fair gaming between social micro stakeholders, which means to introduce competition in more areas, enhance information transparency and encourage to decentralized decision making mechanism.

The author is a lecturer at the Management School of the Shanghai University and a research fellow at the China Europe International Business School Lujiazui International Finance Research Center.