China vows to grow its economy with sweeping reforms that will deliver on targets but with a more conscious regard for the environment.

In his report at the opening of the annual legislature's meeting on Wednesday, Premier Li Keqiang said government will maintain last year's economic growth target of 7.5 percent instead of pushing forward with investments, so that it can now focus on reform measures that will protect the environment.

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China's economy actually grew 7.7 percent last year, exceeding the 7.5 percent target, driven mostly by the continuing rapid pace of investments. 

However, environmental concerns began to surface in recent months, culminating in a heavy pollution index that enveloped Beijing and surrounding areas in recent weeks, prompting the central government to adopt a 'cleaner', more sustainable form of growth.

"We must rely fully on the people, break mental shackles and vested interests with great determination to deepen reform on all fronts," Premier Li told 3,000 delegates at the 12th National People's Congress in Beijing.

Li said the country will wage its war against pollution through reforms that will boost non-fossil fuel power, along with a cutdown in the production of steel and cement, which are some of the heaviest air polluters.

"Smog is affecting large parts of China and environmental pollution has become a major problem, which is nature's red-light warning against the model of inefficient and blind development," Li said.

Beijing, however, plans to implement industrial downsizing at a gradual pace in order to avoid a sudden rise in unemployment.

Based on the reform's framework, government will shut down idle factories, encourage private investments and expedite work on a new environmental protection tax that will create a cleaner, more "sustainable economy powered by consumption rather than investment", Li added, reinforcing a November pledge made by party leaders to give markets a stronger role in deciding on the allocation of resources.

Investors are closely watching how the Chinese government will implement the changes, by far the most ambitious reform since 1979 when former leader Deng Xiaoping launched a market-oriented approach that spurred China's unprecedented economic development.