Chinese Premier Wen Jiabao said Wednesday China's economy is at a critical moment as it begins to recover "steadily".

Wen told an executive meeting of the State Council, China's Cabinet, that economic performance had started to show positive changes, favorable factors were increasing, the overall situation had stabilized and was moving upwards.

He said the government should continue a pro-active fiscal policy and moderately relaxed monetary policy.

Investment growth kept accelerating, consumption maintained a rapid and steady increase, and domestic demand played a stronger role in boosting economic growth, said Wen.

Agricultural and industrial production grew, and regional coordinated development was making progress, said Wen.

The financial market was stable, and investor confidence stronger. Urban employment kept rising, and reconstruction of areas affected by last year's May 12 earthquake was speeding up, said Wen.

Government measures to fight the global economic crisis proved correct and effective, and should continue to be implemented and improved according to the changing situation, he said.

But it should also be noted that the foundation for economic recovery was not stable and many uncertainties remained, said Wen, citing sluggish exports, the fiscal deficit and trade protectionism.

Wen called for clear-headed judgment and readiness for difficulties and complexities that might occur in the long term.

He urged local governments to further promote economic restructuring, guarantee the stable development of agriculture, encourage technological innovation and work to enhance energy conservation and environmental protection.

Comprehensive efforts should be made to boost domestic demand to power economic growth, Wen said, singling out such measures as subsidies for home appliances and automobiles in rural areas.

Housing consumption should be properly guided and the stable, healthy development of the property market should be ensured, said Wen, adding that tourism, entertainment and cultural consumption should be developed.

Central government-invested programs should be carefully carried out, while private investment should be expanded, said Wen.

He also highlighted the importance of the coordinated development of urban and rural areas, called for the further deepening of reform and opening up and the building of social insurance systems.