BEIJING (Reuters) -- China's domestic demand potential is as huge as ever, despite slowing growth and a difficult economic transformation process, Premier Li Keqiang said, according to a statement on the Chinese foreign ministry website Saturday. Li's comments were made Friday in the eastern Chinese city of Hefei during a forum with German Chancellor Angela Merkel, the statement said. "China is still one of the world's most attractive destinations for investment," Li said.

China's economy is on track to post its slowest growth in 25 years. However, official data show monthly retail sales this year have continuously increased by more than 10 percent, and sectors such as entertainment are expanding at a rapid clip.

In a separate meeting Saturday, Li emphasized China must improve and innovate its approach toward macroeconomic control, and aim to deliver "quality" growth, state news agency Xinhua said.

Reform of fiscal policy and mechanisms, as well as state-owned enterprises, should be deepened in an effort to restructure China's economy, Xinhua reported Li as saying, underscoring the roles of innovation and entrepreneurship.

He highlighted other areas for improvement such as ensuring both urban and rural areas benefit from economic progress, while international cooperation will also be opened up, Xinhua said.

(Reporting by Paul Carsten; Editing by Miral Fahmy and David Evans)