Chinese Premier Wen Jiabao delivers a government work report during the opening meeting of the Third Session of the 11th National People's Congress (NPC) at the Great Hall of the People in Beijing, March 5, 2010. Photo: Xinhua

China expects its economy to grow around 8 percent in 2010 from a year earlier, said Premier Wen Jiabao at the opening Friday, of a 10-day session of the National People's Congress, the parliament, forecasting a "crucial but complicated" year for economic recovery.

Setting the 8-percent target mainly "aims at ensuring the quality of economic growth, focusing on transformation of economic growth pattern and adjustment of economic structure," said Wen in his government work report to the National People's Congress (NPC). The consumer price index target will be kept at 3 percent, the premier said. Although the development environment this year may be better than 2009, China "will still face a complicated situation," Wen said.

Wen told the 3,000 NPC delegates that China had “worked tenaciously” to respond to the global financial crisis and had been the first economy to make a turnround but he added that the recovery was still “insufficient.” China also had a GDP target of 8 per cent in 2009 and grew by 8.75 percent, boosted by a massive RMB4-trillion yuan ($585.5 billion) stimulus package that was announced in November 2008.

This year will be a "crucial but complicated" one for China's economic development as the country will continue fighting against the global financial crisis while maintaining a stable and comparatively fast economic growth and accelerating transformation of growth pattern, he said.

Zhuang Jian, senior economist with the Asia Development Bank, told State news agency Xinhua, that last year China pushed very hard to meet its growth target amid the most difficult time for economic growth, but this year, the goal will be achieved at ease as international and domestic conditions improve. He also said the new target demonstrates the resolution of the Chinese government to shift its development focus from quantity to quality.

"Growth is not a priority; Even 9 percent or 10 percent of growth are within reach in the short-term, but that is no longer desirable since China has learnt from the financial crisis that the previous model is not sustainable,"Zhuang said.

Wen Jiabao said excessive growth of home prices in major cities would be curbed and promised to increase supply of low-cost housing and common residential houses, as well as restrain speculative purchase and tightening land use management.

A total of RMB63.2 billion yuan ($9.25 billion) will be spent by the central government on low-income housing in 2010, an increase of RMB8.1 billion yuan, or 14.7 percent over last year, Wen said.

The government will also build three million affordable houses and renovate 2.8 million shanty houses, he said.

Driven by record bank lending and favourable tax breaks, China saw a sharp residential property price hike nationwide in the past year, triggering fears of possible assets bubble.

China's home prices in 70 large- and medium-sized cities, climbed 9.5 percent in January 2010 from a year earlier, the fastest growth in 19 months.

The premier said nothing about exchange rate policy and the peg to the US dollar which has been in place since mid 2008.