Chinese Premier Li Keqiang urged reforms Sunday of inefficient state-owned enterprises as his government tries to restore confidence in its slowing economy, state media reported on Sunday.

State-owned enterprises (SOE) "are in urgent need of reforms as... poor management [has] resulted in declining profits", Li said on Friday while presiding over a meeting on reform in the sector, according to the state-run news agency Xinhua.

China is struggling to restore confidence after an extended plunge on the Shanghai stock exchange, along with global market jitters over an ongoing growth slowdown and questions over its communist leaders' economic management skills.

Chinese authorities say they are trying to reform the lumbering, inefficient industrial giants of the state sector, but the process is slow and obstructed by vested interests.

Last week China issued a guideline to deepen SOE reforms, with the aim of making them more creative and internationally competitive.

"The SOEs must improve their management through market-oriented reforms, such as mixed-ownership reforms and a modern corporate system," Li said.

He added that state firms should improve their competitiveness, press ahead with mergers and revamping, and waste no time in dealing with "zombie" enterprises that are a burden to the economy.

China's communist authorities regularly make pledges to carry out reforms, but many have gone unfulfilled in the past.