China's political, governmental and institutional reform should be further deepened as it moves ever forward with market-oriented system.

High-ranking economists, reform activists and officials Thursday voiced the call at a forum organized in Beijing to mark the 25th anniversary of China's reform and opening up to the outside world.

They hailed the nation's economic development as a glorious achievement, given the standing it has achieved over the past quarter of a century.

"But today I want to mainly focus on the challenges ahead of my country,'' said Gao Shangquan, president of the China Society of Economic Reform.

Gao said China should deepen its political reform to make it compatible with its market economy system.

"Our current political system, mainly resulting from the planned economic system, needs to be further reformed as China is becoming economically energetic,'' he said.

Apart from the political change, others in attendance Thursday also pointed out the key economic problems facing China.

They said its economy, which has achieved an average growth rate of 9 per cent during past 25 years, is mainly investment-oriented. But despite all of the money pouring in, it is not being used efficiently.

Guo Shuqing, vice-governor of the People's Bank of China, said capital investment has accounted for more than 40 per cent of the total gross domestic product.

"But the ratio between investment and output is at a very low level, which I'm quite concerned about,'' said Guo.

His sentiment was shared by Wu Jinglian, China's renowned economist with the Development and Research Centre at the State Council.

"In developed countries, investors can gain US$1 of outputs with US$1 of investment but in China, we need up to US$7 in inputs to achieve an output of US$1,'' said Wu. "The investment (in China) is huge but inefficient.''

He also said the increasing income divide among Chinese people and poverty in rural areas are additional challenges the government has to face during the ongoing reforms.

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