* Vice Premier Li Keqiang says reform crucial, cannot be delayed

  * NDRC head Zhang Ping says policies promoting growth must be followed

  * IMF chief Christine Lagarde says reform to help yuan become reserve currency

  * Reform chorus comes after provincial political shake-up

  By Kevin Yao and Koh Gui Qing

  BEIJING, March 18 (Reuters) - China cannot delay tough economic reforms, Vice Premier Li Keqiang said on Sunday, underscoring the top leadership's push for market-based change after the sacking last week of an ambitious provincial leader who wanted a bigger state role in the economy.

  Li, widely expected to succeed Wen Jiabao as premier in a leadership transition that begins later this year, promised flexible policies to keep growth brisk and prices stable, with a focus on boosting domestic demand and pursuing structural reforms to make growth more stable and balanced.

  " China has reached a crucial period in changing its economic model and (change) cannot be delayed. Reforms have entered a tough stage," Li said, echoing comments made by Wen last week.

  " We will make policies more targeted, flexible and forward-looking to maintain relatively fast economic growth and keep price levels basically stable," Li said in a speech at an economic policy conference, attended by top Chinese officials, the head of the IMF and dozens of foreign business leaders.

  He said China would " deepen reforms on taxes, the financial sector, prices, income distribution and seek breakthroughs in key areas to let market forces play a bigger role in resource allocation" .

  Li's renewed emphasis on reform-led growth comes after Wen said slower growth and bolder political reform must be embraced to keep the world's second largest economy from faltering and to spread wealth more evenly, promising to use his last year in power to attack discontent that he warned could end in chaos.

  Wen told a news conference at the end of the National People's Congress (NPC) that growth would be made more resilient to external pressures, domestic property and inflation risks deflated and 10.7 trillion yuan ($1.7 trillion) in debt racked up by local governments dealt with, while also promoting political change.

  He cut China's official 2012 growth target to 7.5 percent, down from the 8 percent targeted in each of the last eight years, aiming to create leeway to deliver reform of items including subsidies, without igniting inflation.

  China's annual rate of inflation cooled to 3.2 percent in February, below the government's 4 percent target for the first time in more than a year. But policymakers remain particularly sensitive to elevated commodity prices, given China's huge imports of raw materials.

 

  PRO-GROWTH POLICIES CRUCIAL

  Zhang Ping, head of the country's top planning agency, the National Development and Reform Commission, told the Sunday conference that economic policies maintaining relatively fast growth were key to the country's future.

  " First of all, we need to maintain steady and relatively fast economic growth -- development is the key for resolving all problems in China," Zhang said.

  The government would maintain prudent monetary and pro-active fiscal policies, and stand ready to fine-tune settings -- a consistent refrain from China's leaders since the autumn of 2011.

  The show of unity over pro-market reform took on new significance last week when China's central leadership moved to bolster control over the southwest city-province of Chongqing after ousting its contentious but popular chief, Bo Xilai.

  The calls for unity with the ruling Communist Party's top leaders were emblazoned on the front pages of Chongqing newspapers on Saturday. They made no mention of Bo, removed from power after a scandal when his Vice Mayor Wang Lijun took refuge in February in a U.S. consulate until he was coaxed out.

  After arriving in Chongqing in 2007, Bo, 62 and a former commerce minister, turned it into a bastion of Communist revolutionary-inspired " red" culture and egalitarian growth, winning national attention with a crackdown on organised crime.

  His self-promotion and revival of Mao Zedong-inspired propaganda irked moderate officials. But his populist ways and crime clean-up were welcomed by many residents and others who hoped Bo could try his policies nationwide.

  Li said that while the overall trend of China's economy was stable with sound fundamentals, it faced structural obstacles that must be overcome, adding that Beijing would push forward structural reforms while encouraging technological innovations to generate new sources of economic growth.

 

  CURRENCY REFORM CARROT

  International Monetary Fund managing director, Christine Lagarde, dangled an additional reform carrot at the same economic forum on Sunday, saying that the yuan could become a global reserve currency with the right mix of market-oriented structural change.

  " What is needed is a roadmap with a stronger and more flexible exchange rate, more effective liquidity and monetary management, with higher quality supervision and regulation, with a more well-developed financial market, with flexible deposit and lending rates, and finally with the opening up of the capital account," Lagarde said.

  " If all that happens, there is no reason why the renminbi (yuan) will not reach the status of a reserve currency occupying a position on par with China's economic status."

  China, the world's biggest exporting nation and the second-largest importer, has long wanted to break the dollar's dominance as the principal global unit of cross-border trade, in part to battle internal inflation risks and also to enhance Beijing's influence on the international financial system.

  China's has a closed capital account system and its currency is tightly controlled.

  Although Beijing has increased the use of the yuan to settle cross border trade, undertaking a series of reforms in recent years to that end, yuan settlement was only about $300 billion in 2011, which Chinese exports were worth about $1.9 trillion.

  Li said he expected China's total trade to maintain double-digit growth this year. The government has an official target of 10 percent growth in both imports and exports for 2012.

  Exports are a key source of demand and jobs for China's vast factory sector and have been a principal driver of wealth creation for much of the last decade in the wake of the country's accession to the World Trade Organisation.

  China's trade balance plunged $31.5 billion into the red in February as imports swamped exports to leave the largest deficit in at least a decade and fuel doubts about the extent to which frail foreign demand drove the drop.

  Li said that there were some encouraging signs emerging about the pace of global economic recovery, and forecast that China's total trade would top $10 trillion in the five years 2011-2015, but added that the outlook was not certain, with efforts to resolve Europe's debt crisis still evolving.

  Economists expect China's annual economic growth to slow to close to 8 percent in the first three months of 2012, down from 8.9 percent in the last quarter of 2011. That would be the fifth successive quarter of slower growth and leave China on track to end the year with its weakest expansion in a decade.

  A raft of economic indicators in the last two weeks have signalled that China's economy is on a gentle glide lower and on course to avoid a so-called hard landing. (Writing by Nick Edwards Editing by Don Durfee and Jonathan Thatcher)

By Sung-won Shim

  SEOUL (Reuters) - North Korea on Sunday rejected criticism of its planned long-range missile launch which threatens to upset its only major benefactor, China, and put relations with the United States back in the freezer just as they seemed to be starting to thaw.

  Political analysts say the launch, which would violate U.N. resolutions on the heavily sanctioned state, is aimed at boosting the legitimacy of its young new ruler Kim Jong-un who inherited power after his father's death in December.

  " The peaceful development and use of space is a universally recognized legitimate right of a sovereign state," the North's state KCNA news agency said.

  North Korea says it is using the rocket to launch a satellite to mark the 100th anniversary of the birth of Kim Il-sung, the country's founding ruler and grandfather of the current ruler.

  The United States, and others, say it is much the same as a ballistic missile test and therefore off-limits for the isolated state which has for years been trying to build a nuclear arsenal.

  Washington, which last month agreed to supply North Korea with food in exchange for a suspension of nuclear tests, missile launches and uranium enrichment and to allow nuclear inspectors into the country, called the planned launch " highly provocative" .

  More troubling perhaps for Pyongyang, which is long accustomed to trading invective with Washington, Beijing called the planned launch a " worry" in a rare attempt to put public pressure on its impoverished ally.

  The North has invited foreign observers and journalists to attend the launch.

  It announced the planned launch on Friday just weeks after the deal with Washington. It will coincide with the 100th anniversary of the birth of its founder Kim Il-sung.

  In April 2009, North Korea conducted a ballistic rocket launch that resulted in a new round of U.N. sanctions, squeezing the secretive state's already troubled economy and deepening its isolation.

  That launch was dismissed as a failure after the first stage fell into the Sea of Japan without placing a satellite in orbit. Another test failed in similar circumstances in 1998.

  The new launch is due to take place between April 12-16, to coincide with Kim Il-sung's centenary celebrations and will coincide with parliamentary elections in South Korea.

  Japan has said it would consider deploying PAC3 missile interceptors as it did in a 2009 launch by North Korea.

  (Reporting by Sung-won Shim Editing by David Chance and Jonathan Thatcher)

By Fredrik Dahl

  VIENNA (Reuters) - Global use of nuclear energy could increase by as much as 100 percent in the next two decades on the back of growth in Asia, even though groundbreakings for new reactors fell last year after the Fukushima disaster, a U.N. report says.

  The report by the International Atomic Energy Agency (IAEA), which has not yet been made public but has been seen by Reuters, said a somewhat slower capacity expansion than previously forecast is likely after the world's worst nuclear accident in a quarter of a century.

  But, it said: " Significant growth in the use of nuclear energy worldwide is still anticipated — between 35 percent and 100 percent by 2030 — although the Agency projections for 2030 are 7-8 percent lower than projections made in 2010."

  Japan's reactor meltdowns at the Fukushima nuclear plant triggered by a deadly earthquake and tsunami on March 11 last year shook the nuclear world and raised a question mark over whether atomic energy is safe.

  Germany, Switzerland and Belgium decided to move away from nuclear power to grow reliance on renewable energy instead.

  The IAEA document, obtained by Reuters on Friday, said the number of new reactor construction starts fell to only three last year - two in Pakistan and one in India - from 16 in 2010.

  Also last year, 13 reactors were officially declared as permanently shut down, including the four units at Fukushima as well as eight in Germany.

  " This represents the highest number of shutdowns since 1990, when the Chernobyl accident had a similar effect," the Vienna-based U.N. agency said in its annual Nuclear Technology Review. " As a comparison, 2010 saw only one shutdown and 2009 three."

  In 1986, a reactor exploded and caught fire at Chernobyl in the then Soviet Union, sending radiation billowing across Europe.

  TEMPORARY DELAYS?

  At Fukushima one year ago, fires and explosions caused a full meltdown in three reactors while a fourth was also damaged.

  Today, the four reactors are in a stable, cold shutdown state and clean-up of the site continues, but the final phase of decommissioning will not happen for 30 or 40 years.

  Almost all of Japan's 54 reactors sit idle, awaiting approvals to restart.

  " The 7-8 percent drop in projected growth for 2030 reflects an accelerated phase-out of nuclear power in Germany, some immediate shutdowns and a government review of the planned expansion in Japan, as well as temporary delays in expansion in several other countries," the IAEA report said.

  But many countries are still pushing ahead with nuclear energy, with 64 reactors under construction at the end of 2011, most of them in Asia, said the document prepared for a closed-door meeting of the IAEA's 35-nation board last week.

  Factors that had contributed to growing interest in nuclear energy before Fukushima - increasing demand for energy, concerns about climate change, energy security and uncertainty about fossil fuel supplies - had not changed, it said.

  " In countries considering the introduction of nuclear power, interest remained strong. Although some countries indicated that they would delay decisions to start nuclear power programmes, others continued with their plans to introduce nuclear energy."

  China and India are expected to remain the main centres of expansion in Asia and Russia is also forecast to see strong growth, it said.

  (Editing by Jon Loades-Carter and Keiron Henderson)

By Jack Kim and Jeremy Laurence

  SEOUL (Reuters) - North Korea said on Friday it will launch a long-range rocket carrying a " working" satellite to mark the centenary of founder Kim Il-sung's birth next month, sparking condemnation from the United States and others that it was in breach of a U.N. resolution.

  U.S. Secretary of State Hillary Clinton said the announcement was highly provocative and called upon Pyongyang to honour its obligations including U.N. Security Council resolutions banning ballistic missile launches.

  " Such a missile launch would pose a threat to regional security and would also be inconsistent with North Korea's recent undertaking to refrain from long-range missile launches," she said in a statement.

  The North, which said recently it would suspend long-range missile testing as part of talks with the United States, pledged that next month's launch would not impact neighbouring countries.

  Experts said the launch was clearly another long-range missile test, and could be seen as an act of brinkmanship to pressure Washington into more talks in return for aid.

  South Korea, which is still technically at war with the North after signing only an armistice to end the 1950-53 Korean War, and Japan said the ballistic launch threatened regional security.

  Any launch by North Korea, whether for a satellite or not, that uses ballistic missile technology violates Security Council resolutions, the Japanese government said.

  " We urge North Korea to exercise restraint and refrain from the launch," said the top government spokesman, Chief Cabinet Secretary Osamu Fujimura.

  China, the reclusive state's only main ally, was more restrained in its response, but stressed on maintaining peace on the divided peninsula.

  " Protecting the peace and stability of the Korean Peninsula and North East Asia suits the joint interests of all parties and is the consistent expectation of the international community. This requires that all relevant parties take a constructive role," Foreign Ministry spokesman Liu Weimin told reporters at a regular news briefing.

  MISSILE ADVANCES

  In April 2009, the North conducted a similar ballistic rocket launch which resulted in a new round of toughened U.N. sanctions, squeezing the secretive state's already troubled economy and deepening its isolation.

  That launch, dismissed as a failure after the first stage fell into the Sea of Japan without orbiting a satellite, provoked outrage in Tokyo which had threatened to shoot down any debris or rocket that threatened its territory.

  Another test failed in similar circumstances in 1998.

  Washington says the North's long-range ballistic missile programme is moving ahead quickly and former Defense Secretary Robert Gates said last year that the American mainland could come under threat within five years.

  " The DPRK is to launch a working satellite, Kwangmyongsong-3, manufactured by itself with indigenous technology to mark the 100th birth anniversary of President Kim Il-sung," the North's official KCNA said, quoting a spokesman for the Korean Committee for Space Technology.

  The launch will take place between April 12-16, KCNA said. It is scheduled to occur at around the same time its foes in the South hold a parliamentary election, and just over three weeks after a global nuclear security summit in Seoul.

  CELEBRATIONS, MILITARISTIC IMAGE

  Pyongyang has been planning massive celebrations for years to mark Kim Il-sung's birthday on April 15, and has boasted the occasion would also mark its emergence on the international stage as a " strong and prosperous" nation.

  Analysts said the launch was designed to boost the country's new leadership and to pressure Washington into making concessions.

  " For the outside world this is the same as a long-range missile test," said Park Young-ho of the Korea Institute for National Unification, a government affiliated think tank.

  " This can interpreted as a means of applying pressure on the Americans in negotiations, and is a celebration of the founder's birth as well as an opportunity for the new leadership to celebrate the beginning of a new era," Park said in Seoul.

  The state's new young leader Kim Jong-un, who became the third member of the Kim family to lead the state after his father Kim Jong-il's death in December, has presented a militaristic image to his countrymen since taking power.

  He has visited several military sites and been seen mixing with top brass in what analysts say is a move designed to win the all-powerful army's backing for the succession process.

  KCNA said the launch would be conducted from a base near its border with China, indicating it would take place at a newly constructed missile testing site believed to be larger and more advanced than the site used to launch previous rockets.

  The launch will be made southwards and debris generated from the flight will not impact neighbouring countries, it said.

  (Additional reporting by Jumin Park in Seoul and Kiyoshi Takenaka in Tokyo Editing by Sanjeev Miglani)