Vice-Premier: Reforms are at 'a key stage'

The focus will be on more coordinated development, Li said. This will especially apply to urbanization, industrialization and modernizing agriculture as these will boost consumption and spur investment and development in related industries.

Apart from promoting advanced manufacturing and high-tech industries, China will boost development of the service sector to create more jobs and bolster industrial development. Workforce skills will be upgraded.

The country will encourage technological innovation and improve the protection of intellectual property rights with more input into research and development.

The R&D investment budget is expected to exceed 1 trillion yuan ($159 billion) in 2012, he said.

The GDP growth forecast was lowered to 7.5 percent in 2012, which sparked some concern among countries that have close economic relations with China.

However, the country's economic transformation will be carried out on the precondition of further adherence to its opening up, Li said.

China will create a fair competitive environment for both domestic and international companies while it tries to achieve a trade balance, Li said.

Foreign direct investment in China will remain robust, Li forecast. In 2012 imports will exceed $1.9 trillion. He also forecast that China's total trade would top $10 trillion in the 12th Five-Year Plan (2011-15).

Li said the global economy has showed signs of recovery but the outlook remains uncertain while facing increasing liquidity and inflationary pressures and a volatile international commodity market.

Christine Lagarde, managing director of International Monetary Fund, said that the priorities are being tackled. These priorities are: support growth, boost domestic consumption and spread wealth more widely.

"I am encouraged that the government has embraced these goals as reflected in the recent 12th Five-Year Plan," she said.

Stephen Roach, non-executive chairman of Morgan Stanley Asia, echoed Vice-Premier Li's speech.

Roach told China Daily the urgent tasks facing China are to promote the expansion of the service economy and urbanization, a major source of job creation, as well as to improve the social security network, private pension and unemployment insurance.

Wei Tian contributed to this story.