China still faces many difficulties and challenges internationally and domestically in economic and social development, according to Wen.

"We are keenly aware of that," he said, describing the global economic recovery as "tortuous."

The International Monetary Fund has lowered its forecast for China's GDP growth this year to 8.2 percent from the 9 percent projected in September 2011.

Domestically, Wen said, it has become more urgent and more difficult to solve institutional and structural problems and alleviate the problem of unbalanced, uncoordinated, and unsustainable development.

Zhuang Jian, an economist with the Asian Development Bank, said macro control over the real estate market will remain another challenge China has to properly handle in 2012, as a gloomy property market would impact on related industries.

In Wen's report Monday, he pledged that China would continue to regulate the real estate market to bring down property prices to a reasonable level.

INFLATION CONSIDERATION

The target has also given full consideration of the domestic consumer price level, especially when the government has just started to see initial success in its battle against stubborn inflation in the past year by draining liquidity and curbing speculation.