Such a drive could help the country upgrade sectors including communication and wastewater treatment networks, which usually need large investments, take a long time and don't provide an immediate return, Xu said.

Therefore, the government has to deepen reforms, transform its functions and attract private investment, he added.

The State Council also decided to streamline business registration procedures across the nation by the end of 2015 to boost mass entrepreneurship and innovation.

The measures will simplify business registration by integrating business licenses, organization codes and taxation registration into one certificate.

Zheng Yangpeng contributed to this story.