UPDATE 1-China's Li says zombie firms to go "under the knife"

(Adds details, context)

BEIJING, Dec 4 (Reuters) - China plans to spend around two years tackling serious overcapacity in some industries and will ruthlessly deal with so-called zombie firms, Premier Li Keqiang said in remarks seen on Friday.

Li also said China’s survey-based unemployment rate had been gradually falling in the last three months, but no details were given.

Li’s comments were published on the central government’s website which quoted him as saying overcapacity and zombie firms, or long-term loss-making companies that continue to operate, would go “under the knife”.

China is in the midst of broad economic reforms to shift towards services and consumption and away from investment-heavy industry to find more sustainable drivers of growth as its economy slows.

Li said in the past three years China had cultivated new growth engines while upgrading old growth engines, because displacing old growth drivers could create social problems in terms of people losing their jobs.

He made the comments during a meeting on Thursday, with the government web portal initially releasing his rough remarks on supply- and demand-side reform before issuing further details Friday. (Reporting by Beijing Monitoring Desk and Kevin Yao; Writing by Jake Spring; Editing by Nick Macfie)