After three decades of reforms, China - often called the world's manufacturing workshop - had launched administrative and market reforms "to boost creation and innovation", he said on a visit to Germany.
"What we hope is to incentivize 1.3 billion people, including 800-900 million workers, to mobilize their innovation capability and creativity so that everyone will have an opportunity to make great accomplishments," he said.
This would "turn our dividend of population into a dividend of talents".
Li was speaking at a business forum on the first country stop of a week-long Europe tour, a day after Berlin and Beijing signed a range of business deals and pledged to deepen links and boost trade that last year topped €140 billion.
The premier delivered his speech in the northern port of Hamburg, a European base for 500 Chinese companies and the gateway for half of Germany's annual trade with China, equating to 2.7 million shipping containers last year.
Li reminded his audience that China is a "driving force of growth and recovery of the world economy", predicting GDP growth of about 7.5 percent this year, despite multiple global crises.
Just as important for China, he said, was job creation, raising household incomes and the "war against pollution".
During Li's visit foreign companies operating in China again voiced long-standing complaints about unfair market access, including being blocked from public tenders and having to form local joint ventures.
The premier said China must integrate further with its economic partners, protect intellectual property rights, enforce fair business rules and create "a level playing field" under government oversight.
"China needs to learn from other countries as well as the fine achievements of human civilization, and must combine these with China's own national conditions, so that China will become a (hotbed) for creation and will be a huge market for the world," he said.
Li said, China "must rely on innovative development, and we cannot do this without the rest of the world. The world also needs China to achieve prosperity."
He stressed that for the Chinese economy "there will not be a hard landing, as suggested by some media".
He added that "economic development is not a sprint, instead it is a long-distance race that never ends... there should be a certain speed but more importantly we need perseverance and stamina."
Li is on his second Europe tour since taking office this year, which next takes him to Russia, where he will meet President Vladimir Putin, before he travels to Italy for an October 16-17th meeting of Asian and European leaders.