Li calls for policies to encourage spending

The first is to introduce more consumer-friendly policies to encourage people to spend more on medical care, personal development during retirement and cultural interests. In the meantime, adequate funds will sustain the development of urban roads and rail transport, as well as public environmental facilities.

Second, the country's agricultural base should be protected so that an ample supply of farm products can help it steer clear of risk from abrupt price rises.

Third, more is to be done to improve the general welfare by providing jobs, medical care, financial support to students from low-income families and government subsidized housing units.

Fourth, reforms will reduce the number of official approvals, adjust the tax system and pricing practice for key production materials, further liberalize interest rates, move toward renminbi convertibility in the capital account and open up service industries.

Fifth, the State Council also highlighted the need to control the risk of local government indebtedness.

Jin Liqun, chairman of the board of supervisors of China Investment Corporation, said on Wednesday that economic growth may remain moderate for the next five years — lower than 8 percent year-on-year — as the advantage of abundant inexpensive labor recedes.

"China's economy should depend on creating more jobs by upgrading its industrial structure. Excessive reliance on investment in infrastructure construction is unsustainable," said Jin, who was also former vice-minister of finance.

The new leadership faces more challenges from social equity issues, an enlarged wealth gap and employment pressure, and a modest growth pace indispensable to solve those problems, he said.

Jin said the shadow banking system and increasing local debt are worrisome.