CHINA will aim to achieve economic growth of 5 per cent this year, Prime Minister Li Qiang said today.

Presenting the government’s work report at the annual session of the National People’s Congress, Mr Li said that ministers planned to boost spending on advanced technology, strengthen China’s military and take measures to boost the economy.

There was growth of 5.2 per cent last year, compared to a sluggish 2.5 per cent in the United States.

Many experts believe that China has already overtaken the US as the world’s largest economy.

Mr Li told the 5,000 congress delegates the government would continue with a “proactive fiscal policy and prudent monetary policy,” suggesting that there would be no major change in its approach to the economy.

He unveiled a plan to boost growth by issuing long-term bonds over the next several years, starting with one trillion yuan (around £110 billion) this year. 

The money will be spent to implement “major national strategies” and fortify security “in key areas.”

The government also plans a “new development model” for the housing market, including building government-subsidised housing, the prime minister said.

“The foundation for China’s sustained economic recovery is not yet stable, with insufficient effective demand, overcapacity in some industries, weak social expectations and still many risks and hidden dangers.

“Achieving this year's targets will not be easy,” Mr Li added, referring not only to economic growth but also to other goals, including raising incomes, creating 12 million jobs and making the economy more energy-efficient in pursuit of targets for combating climate change.

China also set a 2.5 per cent goal for reducing its energy consumption.

The government released a draft budget that included a 7.2 per cent rise in defence spending to 1.67trn yuan (£182bn) in response to increasingly aggressive noises from the US and its allies. It keeps its defence spending under 1.8 per cent of GDP.

Mr Li reiterated calls for greater confidence despite the challenges facing China, noting the country’s vast market of about 1.4 billion people, its advanced manufacturing capacity and its massive workforce.

“The underlying trend of economic recovery and long-term growth remains unchanged and will not change,” he said.

In addition, Mr Li also said the government would focus on employment, including with subsidies for companies able to create jobs.

The legislative session is expected to continue until March 11.