The State Council, China's Cabinet, on Friday vowed to strengthen the fine-tuning of the economy in a timely manner in order to cope with new circumstances as the first quarter GDP registered the lowest growth rate in nearly three years.

The economy is currently in a generally stable state, but faces many difficulties and challenges. Efforts should be made to leave more room for new policies and prepare for hardships and tests, according to an executive meeting of the State Council presided over by Premier Wen Jiabao.

The government pledged to improve macro-regulation, enhance demand management and make policies more targeted, flexible and forward-looking, according to a statement issued after the meeting.

The statement came hours after data showed the GDP of the world's second-largest economy grew 8.1 percent in the first quarter from a year earlier, the lowest in 11 quarters.

China's GDP slowed throughout all of 2011, from 9.7 percent in the first quarter to 8.9 percent in the last quarter, as external demand waned from the United States and the European Union, China's major trade partners.

The government will work to enhance domestic demand by boosting consumption and retaining a proper investment scale while ensuring funding for key investment projects, the statement said.

"Concrete efforts should be made to break up monopolies, relax restrictions on market access and boost the momentum of private sector investment," it said.

It reiterated that the government will continue a campaign to curb property prices and speculation. The government has vowed to build more ordinary commercial housing and construct more affordable homes.

The government will also strive to clean up local government debts and push forward reforms in major fields, including the fiscal, taxation and financial systems, resource commodity pricing, income distribution and healthcare.

Other tasks on the government's work agenda also include achieving a bumper harvest this year, ensuring the overall stability of consumer prices, maintaining stable foreign trade growth and improving people's livelihood, according to the statement.