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China's VAT rates for manufacturers remains higher than other Asian countries, including Japan (8 percent) and Vietnam (10 percent), according to Morgan Stanley.

China will ease restrictions on foreign investment, including a further opening-up in sectors such as services, manufacturing and mining, according to a news release issued after a key Party meeting on Tuesday.

China will make efforts to build more independent and controllable industrial and supply chains, according to a statement released after the annual Central Economic Work Conference.

China's GDP growth remained stable in the first quarter, up 6.8 percent year-on-year. From January to April this year, the total profits of large-scale industrial companies reached 2.13 trillion yuan (8 billion), an increase of 15 percent over the previous year, according to data from the National Bureau of Statistics.

China's catching up in key electronic parts, computer chips, and software - the so-called soul of information technology - is "a remarkable achievement considering how fast other countries are also developing", Diao said.