Chinese Premier Li Keqiang pledged to decentralize power, giving more role to private businesses to compete with government firms.

In his first news conference on Sunday, Li said markets will have more capacity to determine interest rates and the exchange rate, a move which may reduce profits of state-owned banks.

The 57-year old Li said the reform is about curbing government power. "It is a self-imposed revolution." "It will be very painful and even feel like cutting one's wrist."

Further, he vowed to cut government bureaucracy and reduce government spending. He noted that more than 1,700 items require government approval, curtailing the efficacy of private enterprises. It in turn gives space for corruption.

In the face of severe air pollution and contamination of water supplies, Li said his government will show greater resolve and take efforts to clean up such pollution.

Li succeeded Wen Jiabao as premier on March 15, is set to guide the nation for the next decade. Li said he will push ahead with urbanization reforms and support migrant workers in cities.

China should maintain steady economic growth, prevent inflation and control latent risks, Li said. Although it seems to be difficult, favorable conditions are in place and domestic demand has enormous potential, he noted. Li reportedly said that hitting a 7.5 percent target would be difficult.

China aims to achieve 7.5 percent economic growth this year. China's economic growth eased to a 13-year low of 7.8 percent in 2012 from the 9.2 percent recorded in 2011 and 10.3 percent in 2010.

Data published by the National Bureau of Statistics on Monday showed that home prices increased in February, as people expect fresh property tightening measures from the government.

House prices increased in 62 cities out of 70 in February from the previous year. In Beijing, new home prices surged 5.9 percent annually. Prices were up 3.4 percent in Shanghai and 8.1 percent higher in Guangzhou.

RTTNews