China has set an official economic growth target of “around 5 per cent” for 2023, as it seeks to revive the world’s second largest economy after a year of tepid growth because of pandemic measures, and will increase defence budget by 7.2 per cent, the media reported.

The new GDP target was released Sunday by outgoing Premier Li Keqiang during the opening of the annual gathering of the National People’s Congress (NPC), the country’s rubber-stamp legislature, as Li delivered the government work report to nearly 3,000 delegates at Beijing’s Great Hall of the People, CNN reported.

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“China’s economy is staging a steady recovery and demonstrating vast potential and momentum for further growth,” Li said in his address, which emphasised China’s focus on ensuring stable growth, employment and prices amid global inflation.

The economy added more than 12 million urban jobs last year, with the urban unemployment rate falling to 5.5 per cent, according to the work report, CNN reported.

China also unveiled its annual military budget for 2023, which will increase 7.2 per cent to roughly 1.55 trillion yuan ($224 billion), according to a draft budget report released alongside the NPC opening.

The spending increase marks the second year in a row that the annual hike in military spending has exceeded 7 per cent and tops last year’s 7.1 per cent growth, amid rising geopolitical tensions and a regional arms race, CNN reported. As with other recent years, the figure stays well below the symbolically significant double-digit expansion.

“The armed forces should intensify military training and preparedness across the board, develop new military strategic guidance, devote greater energy to training under combat conditions and make well-coordinated efforts to strengthen military work in all directions and domains,” Li’s work report said.

The GDP target and military spending are among the most closely watched in the opening day proceedings, with the GDP target figure in particular being monitored this year as China emerges from its economically draining zero-Covid policy. The new figure appears modest against what some analysts had predicted could be a more robust aim for the year ahead, CNN reported.