Beijing set an ambitious annual growth target of around 5% yesterday, vowing to make domestic demand its main economic driver as an escalating trade war with the US hit exports.

It also has “full confidence” that it can reach that goal this year, Zheng Shanjie, chairman of China’s National Development and Reform Commission, told a news conference.

“We have the basic support and guarantee of achieving this year’s growth target of around 5%,” Zheng said.

“We have full confidence in this,” he said.

Zheng, speaking on the sidelines of Beijing’s annual “Two Sessions” political meetings, acknowledged that “uncertainty in the external environment is further increasing”.

“We are also facing some problems such as insufficient domestic demand, production and operation difficulties in some industries and some enterprises,” he said.

“However, we feel that these difficulties and challenges are in the process of development and progress, and they can all be overcome and solved,” Zheng said.