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China sets 5pc growth target as parliament opens

China has set a modest target for economic growth this year of about five per cent as the National People's Congress began its annual parliamentary session, which is poised to implement the biggest government shakep-up in a decade.

China's gross domestic product grew by just three last year, one of its worst showings in decades, squeezed by three years of COVID-19 restrictions, crisis in its vast property sector, a crackdown on private enterprise and weakening demand for Chinese exports.

In his work report, outgoing Premier Li Keqiang emphasised the need for economic stability and expanding consumption, setting a goal to create around 12 million urban jobs this year, up from last year's target of at least 11 million.

Li set a budget deficit target at three per cent of GDP, widening from a goal of about 2.8 per cent last year.

"We should give priority to the recovery and expansion of consumption," said Li, who spoke for just under an hour in a speech to open the parliament, which will run through March 13.

"The incomes of urban and rural residents should be boosted through multiple channels. We should stabilize spending on big-ticket items and promote recovery in consumption of consumer services."

This year's growth target of about five per cent was at the low end of expectations, as policy sources had recently told Reuters a range as high as six per cent could be set. It is also below last year's target of about 5.5 per cent.

"While the official growth target has been lowered for the second consecutive year, which might be a disappointment to the market, we reckon investors (should) pay attention to the underlying growth momentum to gauge the recovery pace," said Zhou Hao, economist at Guotai Junan International.

Li said China's armed forces should devote greater energy to training under combat conditions and boost combat preparedness.

China should also promote the peaceful development of relations with Taiwan and advance the process of China's "peaceful reunification", but also take resolute steps to oppose Taiwan independence, he said.

China's increasingly fraught relations with the United States were just one of a host of challenges Beijing is facing, as the government prepares for its biggest shake-up in a decade during this year's parliamentary session.

Li and a slate of more reform-oriented economic policy officials are set to retire during the congress, making way for loyalists to President Xi Jinping, who further tightened his grip on power when he secured a precedent-breaking third leadership term at October's Communist Party Congress.

During the NPC, former Shanghai party chief Li Qiang, a longtime Xi ally, is expected to be confirmed as premier, tasked with reinvigorating the world's second-largest economy.

The rubber-stamp parliament would also discuss Xi's plans for an "intensive" and "wide-ranging" reorganisation of state and Communist Party entities, state media reported on Tuesday, with analysts expecting a further deepening of Communist Party penetration of state bodies.

The NPC opened on a smoggy day amid tight security in the Chinese capital, with 2948 delegates gathered in the Great Hall of the People.

It is the first NPC meeting since China abruptly dropped its zero-COVID policy in December, following rare nationwide protests.