China's financial supply-side reform should recognize the "freedom of time and space" function of finance in the allocation of production factors, liberate the constraints of production relations of factors by financial instruments, build a financial system that is more conducive to the effective allocation of resources in the micro market, and release from the administrative intervention of fiscal and policy instruments and the path dependent on traditional planning, so as to form real financial capital that matches the finance of a major country and help China's long-term economic "soft landing" or crossing the "middle-income trap". Because of the risks of China's entity economy, through multiple policy hedging and counter-cyclical adjustments, to a large extent, it has been "redistributed" to the financial system. This is the key to understanding the current critical battle against risks and financial supply-side reforms. The financial empowering entity is the starting point of the current financial supply-side reforms promoted by China. Its essence is to release the free nature of production factors, and at the same time respect the nature of finance itself to chase profits, decline the crowding out of effective financial resources from the financialization of non-productive activities, and reduce the disturbance of national credit and policy non-commercial banks on credit market activities. What's more, to truly let the market play a role in the allocation of credit resources, we should re-commercialize commercial banks that have undertaken too many policy functions, and let them return to the essence of serving the real economy.
