China growth
China growthReuters

UPDATE: 11:52 a.m. IST -- China Saturday announced its lowest increase in the defence budget in six years, stating that it will increase military spending by 7.6 percent to 954 billion yuan. This is said to be the first single-digit rise announced for the Chinese defence budget since 2010.

The lower rise in the defence budget comes even as China raised tensions in the South China Sea in recent weeks. 

Last year, the increase was 10.1 percent. 

Original Story:

China lowered its growth target for 2016 to 6.5-7 percent, the government announced Saturday, with Premier Li Keqiang saying it will allow for relatively "full employment." China also raised the budget deficit to 3 percent of GDP in 2016 from 2.3 percent the previous year. 

China's economic growth had slowed to 6.9 percent in 2015, falling slightly short of the 7 percent target and being recorded as its weakest in 25 years.

"The aim of maintaining stable growth is to primarily ensure employment and promote the people's wellbeing, and a growth rate of between 6.5 percent and 7 percent will allow for relatively full employment," the Chinese premier said at the National People's Congress annual session, according to Xinhua news agency. 

He said the budget deficit was raised to cover tax and fee reductions for enterprises to "reduce their burdens." China will also reportedly target consumer inflation of "around 3 percent" and unemployment "within 4.5 percent."

China lay down its 13th five-year plan as a blueprint for economic development between 2016 and 2020. It has reportedly brought in industrial reforms, promising to open industries such as oil, natural gas, transport and telecom to private competition, according to The Associated Press. 

The Chinese premier also reportedly assured "more fair, transparent and predictable" regulations to attract investments. 

Analysts told China Daily the lower growth target reflected "the severe challenges facing Chinese policymakers as they seek to strike a balance between stable growth and economic restructuring."