Internet-led financial innovation key to structural reforms

China's monetary easing policy to ensure ample liquidity in the financial system is welcome, but the fact remains that only more Internet-driven financial innovation can help such a favorable financial environment boost the country's job-creating small businesses.

The first cut in the reserve requirement ratio in 2016 announced by the People's Bank of China on Monday was widely received as an encouraging sign that the authorities will adopt more expansive fiscal and monetary policies to support growth. The central bank's surprise move even enabled Chinese shares to shrug off disappointing manufacturing and service sector surveys to rebound on Tuesday.

As the latest sign of strong headwinds against the world's second-largest economy, China's manufacturing activities contracted for a seventh straight month in February while its service sector activities continued to slow down. Official data show China's Purchasing Managers' Index for the manufacturing sector fell from 49.4 in January to 49 in February, the lowest level since August 2012, and that for the non-manufacturing sector slid from 53.5 to 52.7.