China set its annual growth target at 4.5-5 percent on Thursday, its lowest figure in decades but at the center of plans to tackle sluggish consumption and a flagging property market.

Beijing also used its showpiece annual political gathering to announce a seven percent increase in its defense budget, the second largest in the world, in line with previous years as it looks to counter the United States and enforce its claims over Taiwan and the South China Sea.

China is the world’s second-largest economy and accounts for a third of global growth, but it faces serious structural imbalances and US trade pressures despite sustaining strong exports.

“The achievements of the past year were hard-won,” Premier Li Qiang said, as he opened the annual meeting of the National People’s Congress, China’s parliament, on Thursday morning.

“Rarely in many years have we encountered such a grave and complex landscape, where external shocks and challenges were intertwined with domestic difficulties and tough policy choices.”

This year’s growth target is the lowest since 1991, according to AFP research.

The only exception was in 2020, when none was set as the economy reeled from the Covid-19 pandemic.

Delegates from across China gathered in the cavernous Great Hall of the People for a series of highly orchestrated meetings in Beijing known as the Two Sessions, overseen by President Xi Jinping.