China must press on with its historic reform agenda of the past two decades despite growing economic, social and environmental problems, Prime Minister Wen Jiabao said.

Chinese Premier Wen Jiabao gestures during his annual press conference following the close of the National People's Congress (NPC) at the Great Hall of the People in Beijing. Wen said that China must press on with its historic reform agenda of the past two decades despite growing economic, social and environmental problems. [AFP]

"We need to consistently and unswervingly press ahead with reform and opening up," Wen told a press conference following the end of the nation's annual parliamentary session.

"We need to continue to adhere to the road of socialism with Chinese characteristics. Although there will be difficulties in the way ahead, we cannot stop. Back-pedaling is not a way out."

The economic and social reforms introduced by then-leader Deng Xiaoping in the early 1980s have transformed China, with its economy now the fourth biggest in the world.

Wen admitted that his government had in recent years not adequately addressed issues that affected ordinary people's livelihoods.

"The problems I find most heart-breaking during my past three years' work are that I haven't been able to better solve the problems that Chinese people are most concerned about like health, education, housing and security," he said.

Wen also acknowledged that masses of farmers were suffering injustices due to the illegal seizures of their land.

"We need to respect the democratic rights of the farmers, especially their right to independently operate their contracted land," Wen said.

On the environment, Wen admitted the government had failed to stop severe pollution and there was no easy solution.

"We are now faced with a very serious problem of environmental pollution; this is a major problem facing China's development," he said.

"To be honest with you, we failed to deliver on the targets concerning environmental protection."

Wen's press conference followed the end of the annual session of the National People's Congress or parliament, which sat for 10 days in Beijing.

China's leaders had made the plight of the 745 million rural people, who have seen most of the benefits of the nation's economic growth go to the cities, the main focus of the proceedings.

One of the main measures approved by the congress on Tuesday morning was a 14.2 percent rise in spending on the countryside.

China will now spend 42 billion dollars this year on rural development as part of what Wen characterized as a historic shift to build a "socialist countryside".