Reform is a bright spot amid gloomy data from Q1

China's transition from a centrally planned economy to a market one has been neither easy nor linear. The government has tried to liberalize some sectors and privatize some industries, but certainly not all.

One can argue that the dominance of the State-owned sectors has been maintained with a special emphasis since the 2008 global financial crisis. Such a strategic choice is also behind continuing an investment-driven growth model.

But the cost of such a model cannot be underestimated. Resource misallocation, overcapacity in capital-intensive industries, rising domestic financial fragility, as well as many social and environmental problems, are just some of the risks.