Only by putting an end to a system that is not working properly and is unsustainable can people start to work seriously on an alternative, even though there will undoubtedly be imperfections and hiccups at the start.

Last month the State Council, also known as the cabinet, decided to abolish the requirement of registered capital for anyone setting up a business, in practice a bank account demonstrating the availability of startup funds, even if that money can be borrowed from someone else.

After the decision was announced, there were warnings that once the capital requirement floodgate is raised, the country will be unable effectively to protect itself from being inundated by fake companies - set up with no capital, or indeed legitimate business, their sole aim being to engage in shady and illegal activities.

But those who raised the alarm must surely know that there are already many companies not doing exactly what they claim to do. And part of the explanation why there are so many lies precisely in the system of capital registration, which does not guarantee real financial backup to any company in the first place. It certainly does not prevent any company, even if it has sufficient financial backing, from conduct that is unethical, if not downright illegal.

Indeed, a company system like this can only lead to the entrenchment of discrimination against companies run by people with less registered capital, for example private inventors who do not have recourse to the easy credit the banks dish out to large State-owned enterprises.

What is needed is a system that treats all companies equally according to the law.

The only possible replacement for the requirement for registered capital is to have a society-wide system that tracks companies' and corporate investors' credit standing and records that show they have good legal standing - which is exactly what the State Council has decided to establish.