BEIJING — China announced its lowest growth target in 35 years Thursday as the world’s second-biggest economy struggles with challenges at home and growing uncertainty around the world.

This year, China will aim for GDP growth of 4.5% to 5%, “while striving for better in practice,” Premier Li Qiang, China’s No. 2 official, said in a “work report” delivered inside the Great Hall of the People in Beijing during the opening session of the National People’s Congress, China’s biggest political event of the year.

That figure, the country’s lowest since 1991, compares with the 5% target achieved last year and is the first formal downgrade since 2023. It’s an acknowledgment that China’s growth is slowing as the model that supercharged its economy for decades starts to reach its limits.

“While recognizing our achievements, we are also clear-eyed about the difficulties and challenges we face,” Li said in his more than hourlong address, during which he read much of the 35-page report.

Thousands of delegates are gathered in Beijing for the National People’s Congress, where the ruling Communist Party sets economic targets, lays out policies and signals its tone to the rest of the world. The event, overseen by Chinese leader Xi Jinping, is tightly scripted and almost entirely predetermined to showcase a leadership hyper-focused on stability.

It comes weeks before President Donald Trump is set to visit China for a meeting with Xi where both leaders are trying to extend a fragile trade truce. The highly anticipated meeting has been further complicated by U.S.-Israeli strikes on Iran, which has close ties with Beijing.

China is trying to rebalance its export-dependent economy by boosting domestic demand while addressing structural issues, including a prolonged property slump, industrial overcapacity and soaring local government debt.

It is also investing heavily in cutting-edge technologies such as artificial intelligence and robotics as it competes with the United States for global dominance in those industries.

Li said the government would roll out economic policies “against U.S. tariffs,” which have varied wildly since Trump launched a trade war with China upon his return to office last year. Though China’s exports to the U.S. have fallen precipitously under the tariffs, it has sold more products elsewhere in the world and had a record trade surplus of almost $1.2 trillion last year.

Defense spending will increase 7% to more than $275 billion, according to a separate government budget report, down from 7.2% last year and roughly in line with recent years. China, which has recently seen a large-scale purge of senior military officers, aims to modernize its military by 2035 amid rising tensions in the region, including over the Beijing-claimed island of Taiwan.

“We will make solid gains in military training and combat readiness, and speed up the development of advanced combat capabilities,” Li said in his speech.

Even with a slightly lower growth target, which was widely expected, China is seeking to project confidence in the face of uncertainty and pressures. But the picture is complicated by the war in Iran, China’s longtime strategic partner.

China has been a lifeline for heavily sanctioned Iran, buying 80% of its crude oil imports in exchange for a major discount. But they account for only about 13% of China’s total oil imports and are easily replaced.

Beijing is more concerned about the Strait of Hormuz, a narrow shipping route that Iran has effectively shut down in retaliation for the U.S.-Israeli strikes. China, the world’s largest energy importer, relies on the strait for one-third of its oil imports and a quarter of its gas.

Though China has spent years building up its reserves, which analysts say can offset immediate supply shocks, an extended conflict threatens its economic interests across the Middle East.

Iran is the second Chinese partner in two months to be targeted by U.S. military action, after the surprise capture of Venezuelan President Nicolás Maduro in January. Beijing has criticized the strikes on Iran, as it did the U.S. raid on Venezuela, but is unlikely to provide more than rhetorical support.

Stability amid international turbulence is a key theme for China’s leadership, which favors a “multipolar world” over one dominated by the U.S. But Beijing is also keen to preserve stability in its relationship with Washington, meaning it is unlikely to let the Iran strikes delay or derail Trump’s China visit, which the White House says will start March 31.

In his speech, Li talked about the “positive outcomes” from five rounds of U.S.-China trade talks and said economic and trade cooperation between the world’s two biggest economies was on a “more stable footing.”

China’s economic plans are complicated by its aging and rapidly shrinking population, with officials prioritizing more marriages and a higher birthrate a decade after ending the controversial one child policy. The country of 1.4 billion people faces the same demographic crunch as the U.S. and many other countries, with young people increasingly putting off marriage and starting families or deciding not to have children at all.

Li proposed building a “childbirth-friendly society” in the next five years, with changes to education and health care. Many young people in China complain that the cost of raising children is too high and job prospects too low.

With more than one-fifth of its population over age 60, China is also trying to improve services at the other end of the age spectrum with initiatives to bolster the so-called silver economy. Li said the government would expand sports programs and increase the number of beds at elder care facilities.