While the world expected a stronger recovery in China's economy, the country instead only set a moderate growth target for this year.
The new target was announced by President Xi Jinping's second-in-command, Premier Li Keqiang who predicted China would grow by around 5% in 2023.
In an hour-long speech on Sunday, he also laid out new economic and budget priorities including more defense spending.
In addition, Li Keqiang also said officials will adopt a prudent and targeted monetary policy, and warned of an unstable global economy.
As a result of the strict control of Covid-19, the country has experienced a drastic downturn in the real estate market and a drop in exports, pushing growth to only 3% in 2022.
Analysts see the forecast set as reasonable considering the impact of the Covid-19 restrictions and last year's economic slowdown is still being felt.
The International Monetary Fund, on the other hand, gave a better outlook, with China's economy likely to recover by 5.2% this year as household spending and business activity picked up.
Meanwhile, the government's budget deficit target is set at 3% of GDP, widening from last year's target of 2.8%.
Spending is expected to rise 5.6% from 2022 to 27.51 trillion yuan ($3.9 trillion), while the consumer inflation target will be maintained at 3%, Li Keqiang said.
