China set a modest target for economic growth this year of around 5%, according to a government work report on Sunday, as the National People's Congress (NPC) kicked-off its annual parliamentary session.

In the report, outgoing Premier Li Keqiang said it was essential to prioritise economic stability, setting a goal to create around 12 million urban jobs this year, up from last year's target of at least 11 million.

China's gross domestic product (GDP) grew by just 3% last year, one of its worst showings in decades, squeezed by three years of Covid-19 restrictions, crisis in its vast property sector, a crackdown on private enterprise and weakening demand for Chinese exports.

This year's target around 5% was at the low end of expectations, as policy sources had recently told Reuters a range as high as 6% could be set.

Li set a government budget deficit target at 3.0% of GDP, according to the report, widening from a goal of around 2.8% last year.

This year's parliamentary session will implement the biggest government shake-up in a decade as Beijing confronts a host of challenges and looks to revive its Covid-battered economy.

Li and a slate of more reform-oriented economic policy officials are set to retire during the congress, making way for loyalists to President Xi Jinping, who further tightened his grip on power when he secured a precedent-breaking third leadership term at October's Communist Party Congress.

During the NPC, former Shanghai party chief Li Qiang, a longtime Xi ally, is expected to be confirmed as premier, tasked with reinvigorating the world's second-largest economy.

The rubber-stamp parliament, which will end on March 13, will also discuss Xi's plans for an "intensive" and "wide-ranging" reorganisation of state and Communist Party entities, state media reported on Tuesday, with analysts expecting a further deepening of Communist Party penetration of state bodies.

The NPC opened on a smoggy day amid tight security in the Chinese capital, with 2,948 delegates gathered in the cavernous Great Hall of the People on the west side of Tiananmen Square.

It is the first NPC meeting since China abruptly dropped its zero-Covid policy in December, following rare nationwide protests.