Premier Li Keqiang, flanked by other officials, including Klaus Schwab, founder and executive chairman of the World Economic Forum, enters the meeting venue in Davos on Wednesday. Rao Aimin / Xinhua

Speaking in Davos, premier dispels fears of an immediate or systematic burst in property sector

Premier Li Keqiang backed China's declining real estate sector on Wednesday and forecast huge potential for the industry in remarks to assure overseas corporate leaders that the country's door will open wider.

Speaking at a question-and-answer session with members of the International Business Council of the World Economic Forum in Davos, Switzerland, Li dispelled concerns about an immediate or systematic burst in the property market.

But he said the government has seen "certain turbulence" and "signs of decline" in the market's transaction volume.

"If there is some turbulence, it is only normal adjustment," Li said. "The potential demand for real estate will remain huge for quite a long time in China, given the large number of rural residents moving to urban areas every year."

Eighteen million Chinese rural residents have moved to cities in 2014, seeking better living conditions, education and welfare services, pushing the country'surbanizationrate to about 60 percent.

Li ruled out the possibility of an immediate government intervention in the real estate market, saying the government's priority on housing is to "provide affordable houses to the underprivileged".

He said the government will increase the supply of affordable homes this year to more than 100 million people who are still living in urban shantytowns.

"That population has manifested that China's investment demand in the real estate sector is huge, and such demand will be able to gradually offset productionovercapacityin the cement and steel industries."