China's new Premier promises to allow private investment in financial, railway, energy sectors

Promising to open railways, financial and energy sector to privatisation, China's new Premier Li Keqiang today pledged to deepen comprehensive reforms to revitalise the world's second largest economy, which has slowed considerably in the last two years.

Private capital will be allowed to enter "smoothly and effectively" to enter finance, energy, railways and other sectors, the reformist Premier told reporters at his first press conference at the Great Hall of the People here.

While allowing more private capital to be invested in the financial, energy, railways and other sectors, the government will also reform the areas of social security, medical and pension insurance to contribute to the labour mobility in the country, he said.

Important thing is to further opening up the services sector, Mr Li said at the conference telecast live.

Referring to the reforms process, he said, "however deep the water may be, we will wade into it because we have no alternative".

Mr Li, 57, who termed reforms in the past as "the biggest dividend for China," said "there is great space for further unleashing productivity through reform and there is great potential to make sure the benefits of reforms will reach the entire population".

Mr Li's remarks came as some economists say the Chinese economy has reached a stage where reforms must be accelerated urgently as the demographic dividend, defined as a large proportion of the workforce in the entire population, is starting to dwindle sharply in the world's most populous nation.

Known for his penchant for reforms, Mr Li, a former Vice Premier, has stated in the past that "reform is like rowing upstream, failing to advance means falling back".

In reforming the country's financial sectors, Mr Li reiterated the government will carry out market-oriented reforms in interest rate, exchange rate of the yuan, develop a multi-tier capital market and raise the share of direct financing.

Driving economic transformation through opening up is another key area Mr Li hopes to press ahead.

"Looking ahead, our trade will continue to grow at a high speed in the years to come. That will create enormous opportunities for the world and help the Chinese enterprises to upgrade themselves in the course of fair competition," he said.

To improve people's well-being, Mr Li noted, the government needs to reform the income distribution system and narrow the gap between urban and rural areas that involves 800 million rural residents and over 500 million urban residents, as well as bridge the gap between different regions.

Reforms will be carried out in social sectors to promote upward mobility, said the Premier.

Citing "quite low" share of rural students in some universities in China, Mr Li said, "We need to gradually raise that proportion so as to give hardworking rural students hope."

He acknowledged the difficulty in advancing reform as the nation has to shake up vested interests, which he said may be more difficult than "touching the soul".

"In advancing reform, the important thing is to take action," he said, adding, "Talking the talk is not as good as walking the walk".