The nation vowed to deepen investment in high-tech industries and scientific innovation, framing them as essential to bolstering security and self-reliance amid rising geopolitical tensions and an intensifying rivalry with the US.
At the opening of the annual parliament meeting, Premier Li Qiang praised China's ability to withstand US President Donald Trump's tariff hikes, but said "multilateralism and free trade are under severe threat", and announced seven per cent increases in the national defence budget, as well as in research and development.
China's 15th five-year plan, as widely expected, pledged investments in innovation and industrial upgrading, as well as a "notable" - but unspecified - increase in household consumption as a share of economic output.
The pledges show Beijing is concerned weak domestic demand makes the world's second-largest economy too reliant on exports for growth, but that it also does not want to abandon efforts to upgrade its vast industrial complex, which gives it supply chain leverage over Washington and its allies.
"The imbalance between strong supply and weak demand is acute, market expectations are weak, and there are many risks and hidden dangers in key areas," Li said on Thursday, noting the persistent property sector downturn and strained local government finances.
Economists say a lower growth target allows Beijing to experiment with adjustments to industrial overcapacity - blamed for strong deflationary headwinds - but cautioned this did not mean a departure from its production-focused growth model.
Beijing may tolerate some shake-out in lower value-added sectors, but it still sees manufacturing as the backbone of its national security, analysts say.
"Beijing is trying to manage a 'controlled glide' in growth while building a new economy based on technology rather than property," said Andy Ji, Asian FX & rates analyst at ITC Markets.
"It is a high-stakes rebalancing where the government is betting the house on AI and advanced manufacturing to replace the aging real estate engine."
The five-year plan aims to raise the value-added of "core digital economy industries" to 12.5 per cent of GDP.
The government will also roll out policies for an integrated national data market and establish a system for AI security risk prevention.
The commitment to step up spending on research and development amounts to a 40 per cent increase over the term of the five-year plan.
That funding mandate is designed to develop what President Xi Jinping has dubbed "new productive forces" in areas like AI and semiconductors and insulate China from US export controls.
China pledged support for "breakthrough" developments across a range of industries, from farm seeds and biomedicine to semiconductors and machine tools.
In terms of stimulus, China plans a budget deficit of 4.0 per cent of gross domestic product, similar to 2025.
It set unchanged special debt issuance quotas for the central government of 1.3 trillion yuan ($A266 billion) and for local governments at 4.4 trillion yuan ($A900.73 billion).
China pledged to raise minimum monthly pensions and said it wants to increase education spending, subsidise childcare and reform public hospitals, acknowledging the demographic downturn.
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