With this year's increase, China's defence spending moved closer to the $200 billion mark, making it the highest spender on defence after the United States.
"Onshore investors should take the latest growth target positively, since it would (be) unrealistic to expect 2019 to be stronger than 2018 considering global headwinds and some structural challenges in the Chinese economy that are being addressed in the latest NPC", Hui added. China's imports also fell at the start of the year.
To help lift the economy, fiscal policy will become "more forceful", with the government penciling in cuts of almost 2 trillion yuan (US$298.3 billion) in taxes and fees for companies.
In this area, Li said that China aims to create at least 11 million new urban jobs in 2018 while maintaining the urban unemployment rate below 4.5 percent.
In preparation for a "tough economic battle ahead", Keqiang also promised tax cuts worth 2 trillion yuan ($298 billion) for the year.
China sits on an enormous pile of debt, with fears also building that a significant amount of domestically focused companies are too highly leveraged and are at the risk of default.
In the face of sliding confidence in the economy and worldwide trade tensions, however, Chinese economic planners may still need to resort to short-term stimulus measures to meet the target - which is still high by most countries' standards. The report pledged a "noticeable decrease" in the tax burdens of major industries, with the total of reductions in tax and social security fees coming to 2 trillion yuan.
Li made the announcement during the opening of the second session of the 13th National People's Congress (NPC) at the Great Hall of the People here in Beijing.
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China-U.S. economic and trade friction, in particular, "had an adverse effect on the production and business operations of some companies and on market expectations", said Li, who delivered a work report mapping out policy direction for 2019.
Smaller firms can expect to have easier access to funds as the premier said that China aims to increase lending to them by large commercial banks by more than 30% this year.
This year is the 70th anniversary of the founding of the People's Republic of China.
The world's two biggest economies have also been engaged in an economic conflict over USA allegations that China steals technology and forces foreign companies to hand over trade secrets in an aggressive push to challenge American technological dominance.
Last year, China had already lowered commercial lenders' reserve requirement ratio (RRR) five times to make borrowing easier for small and private firms. "So where does this threat thing come from?" official news portal China Military Online wrote in a commentary on Tuesday.
Separately, China's top banking regulator said on Tuesday Beijing could "absolutely" reach an agreement with the United States on opening up its financial sector.
A deal to end the trade war with the U.S. is on the table but the final outcome remains uncertain.