A Chinese worker walks past a stack of coiled steel rods on a quay in Rizhao city, East China's Shandong province, April 29, 2015. China's capital-fueled economy led to overcapacity in many industries, such as steel and cement. [Photo / IC]

While stimulation on the demand side tends to be short-lived, Chinese leaders hope supply-side reform can generate sustainable and quality growth.

Li highlighted an overhaul of state-owned enterprises (SOEs) as a top priority for supply-side structural reform.

He said the SOE overhaul has two dimensions. One is that authorities in charge of state assets should only be responsible for maintaining and increasing the value of state assets, and allocating well such assets. The other is that SOEs should be dealt with differently on the basis of industries they belong to.

He also called for stricter procedures in carrying out employee stock ownership plans.