TIANJIN -- China will punish companies, domestic or foreign, that are involved in producing counterfeit or shoddy products, engage in fraud or deception, or steal trade secrets, Chinese Premier Li Keqiang said on Wednesday.

The government will improve ongoing oversight and perform its role as a referee of the market, the premier said in an address to the Summer Davos forum, also known as the Annual Meeting of the New Champions 2014, being held in the port city of Tianjin in north China.

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"We should compile a list of government responsibilities to define how the government should regulate the market. All items on the list should be fulfilled by the government," Li said.

"Only by so doing can we build a market environment that favors honest operations and fair play, energizes businesses and encourages innovation and creativity," he said.

The premier said that being lenient to law breakers is tantamount to doing wrong to law abiding people. It could even result in "bad money driving out the good".

Analysts say tight supervision on the market is also important as the country presses ahead with government management reforms by scrapping or decentralizing administrative approval rights.

China launched a series of probes into big foreign names in recent years, the latest episodes being anti-monopoly investigations against Microsoft and Jaguar Land Rover. These high-profile probes are rippling across the Western business circles and stirring unease among firms who perceive unfair treatment.

China will penalize serious intellectual property right (IPR) infringement to the fullest extent in accordance with the law, through measures such as imposing heavy fines in order to make law breakers pay a high price, Li said.

During Wednesday's address, the premier also said China will keep its policies on foreign capital stable and improve and standardize the business environment, in order to attract more foreign businesses and investment.