By Li Hongmei

China has sent its strongest signal yet that its days of galloping economic growth are over, promising to wage a "war" on pollution and reduce the pace of investment to a decade-low as it pursues more sustainable growth.

In an annual parliament meeting that began on Wednesday, Premier Li Keqiang said China aimed to expand its economy by 7.5% this year, the highest among the world's major powers, although he stressed that growth would not get in the way of reforms. The Premier also said that reforms will encourage private investment, cut government red tape and speed up environmental measures

The country is to shift toward more balanced and cleaner economic growth, Li told almost 3,000 delegates at the opening session of China's top legislature, the National People's Congress.

In his first government work report, Li said the growth target was set after serious and repeated deliberation, reflecting a desire to keep market sentiment stable while accelerating economic restructuring.

"Economic development is the key to address all issues in China," Li said.

Uncertainties and challenges remained, he said, such as a still weak foundation for recovery, a lack of strong new economic drivers, risks in areas such as finance and government debt, and overcapacity in some industries.

To cope with these issues, reform was the government's top priority this year.

"We must have the mettle to fight ... and break mental shackles to deepen reforms on all fronts," Li said.

China is gradually moving away from a growth model largely driven by investments and exports.

In a set of goals released by the National Development and Reform Commission yesterday, the country said it was aiming at a 17.5 percent expansion in fixed-asset investment this year, the slowest in at least a decade.

Investment accounted for more than half of China's 7.7 percent growth in 2013 by increasing 19.6 percent, exceeding the 18 percent target.

Meanwhile, the trade goal was downgraded to 7.5 percent for 2014, compared with last year's 8 percent target.

China's economy will increasingly be driven by domestic demand, Li said.

"Stronger domestic demand will become the major power to push forward China's economic growth," he said. "It is an important step in economic restructuring ... domestic consumption will play a key role in generating new growth spots for China."

Services, including health care, tourism, culture and geriatric nursing, had the potential to grow into large industries that can bolster the economy, the premier said.

The country will also carry out further reforms in taxes, the exchange rate regime and will open up more sectors for foreign and private investment.

But the changes would take place at a gradual pace, so as not to trigger an abrupt economic slowdown, Li said.

The country would also try to check inflation at below 3.5 percent and create 10 million new jobs to bring the registered urban unemployment rate to 4.6 percent or below, and in the meantime, to ensure that the per capita income of residents rose in line with economic growth.

"Given that GDP growth is expected to be 7.5% for 'longer', we see this target as supportive for the Asian region, trade, and for commodity currencies," said Annette Beacher, an analyst at TD Securities in Singapore.