Among the plans for 2014, Li announced a deposit insurance system, considered a precondition for freeing deposit rates. It is probably the last and most important step of interest rate liberalization.

China will also overhaul the current system for local government to issue bonds to contain the mounting debt problem. There are detailed measures to cut overcapacity, a major drag on the economy.

In a range of steps to address public concerns, Li also "declared war" on pollution and promised severe treatment for crooked officials "without mercy".

"As we had expected, relatively easy reforms and those with the broadest consensus, will go at a faster pace in the near term," said Wang Tao, chief China economist at UBS.

Relatively ambitious GDP growth will likely limit the room the government has for maneuverer, as it struggles with local government debt and financial leverage and other serious reforms, Wang cautioned, expecting more painful reforms to go at a slower pace.

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