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China's economy shows signs of improvement in Q1 - premier

A Chinese national flag flutters at the headquarters of a commercial bank on a financial street near the headquarters of the People's Bank of China, China's central bank, in central Beijing November 24, 2014. REUTERS/Kim Kyung-Hoon/Files

BEIJING (Reuters) - China's economic indicators showed signs of improvement in the first quarter but a sluggish world economy and volatile markets deprive the changes of a solid basis, state television quoted Premier Li Keqiang as saying on Friday.

Li said the overall economic situation was better than expected and he was confident the government would be able to maintain medium- to high-speed economic growth, despite the difficulties.

"In the first quarter of this year, China's economic indicators showed more improvement," Li said, but added, "The basis of such improvement is not solid due to the impact of sluggish world economy and market volatility."

Li made the remarks during a meeting with the visiting German foreign minister, Frank-Walter Steinmeier.

Top Chinese officials have said the economy was showing signs of improvement while capital outflows were easing.

The government is due to release key economic data, including first-quarter economic growth, next week.

China's economic growth slowed to 6.8 percent in the fourth quarter, its weakest since the financial crisis that began in 2007 and 2008.

Separately, in a paper published on Friday, researchers at the central bank said China should gradually adjust banks' reserve requirement ratio (RRR), based on the balance of payments and economic changes.

The People's Bank of China has cut interest rates six times since November 2014 and reduced its RRR - the proportion of deposits banks must hold with the central bank as reserves - several times, to support the slowing economy.

The central bank is widely expected to cut the RRR further, to support economic growth.

(Reporting by China Monitoring Desk and Kevin Yao; Editing by Clarence Fernandez)