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Li said amid increasingly fierce market competition, local governments should reduce institutional transactions costs, delegate powers and improve regulations and services.

China has been striving to upgrade its industrial structure and shift its economy toward a growth model that draws strength from innovation as its competitive advantages in low labor and raw material costs are being eroded.

Valentina Matviyenko, Speaker of the Federation Council, or the upper house of the Russian parliament, made the remarks at the third international conference "Russia-China: Taking on a New Quality of Bilateral Relations."

The Chinese president's three-day tour in Hong Kong will see him attend celebrations marking Hong Kong's 20th return anniversary and the inauguration of the HKSAR's fifth-term government. He will also inspect the HKSAR.

"While globally we see an overall excess of industrial capacity, liquidity and welfare, many Belt and Road countries face a shortage of those very things," Zhang told Xinhua in an interview. "Left unsolved, this problem will lead to a widening gap between developed and developing economies."