Beijing (CNN) -- Chinese Premier Wen Jiabao underlined the Asian giant's regional military ambitions and economic challenges Monday in a speech that opened the annual meeting of the country's legislators.
China intends to further tailor its military to ensure it is able to prevail in conflicts in its vicinity, Wen said in a speech to the National People's Congress, a 10-day gathering in Beijing of about 3,000 delegates from across the country.
"We will enhance the armed forces' capability to accomplish a wide range of military tasks. Most important is to win local wars under information-age conditions," Wen said.
His made his comments a day after China said it planned to increase its defense budget by 11.2% to some 670 billion yuan ($106.4 billion) this year, following similar increases in previous years and a renewed strategic push by the United States in the region.
The focus on local conflicts is a key part of China's military blueprint -- the country is locked in territorial disputes with several of its neighbors.
It regards Taiwan as part of its territory and has vowed to use force against the island if it ever formally sought independence.
China has also claimed significant portions of the seas off its coast as its own territorial waters, putting it at loggerheads with other nations like Japan and Vietnam that have their own claims on the areas.
As well as pouring more resources into the military, the authorities are also ramping up spending on internal security, according to a Ministry of Finance report released Monday.
The document forecast that central and local government spending on police and other domestic security organs would increase to 701.8 billion yuan ($111.3 billion), from 629.3 billion yuan ($99.8 billion) in 2011.
China is grappling with unrest among its Tibetan population in southwestern regions and among the Uighur population in the far western province of Xinjiang.
In his speech Monday, Wen also set a lower target for China's economic growth, underscoring the need to make the country's breakneck development more sustainable.
The government is aiming for economic growth of 7.5% in 2012, Wen said, lower than the goal for last year of about 8%. But the Chinese economy often exceeds the official objective: last year it grew 9.2%.
"China's economy is encountering new problems," he said. "There is downward pressure on economic growth. Prices remain high."
Chinese officials are concerned about high inflation and perceptions of a growing divide between rich and poor, as well as the threat of faltering overseas demand for the country's exports.
Wen also mentioned challenges the country faced in real estate, agriculture, land rights and food and drug safety.
The National People's Congress at which Wen was speaking is constitutionally the highest organ of power in China, although it has long been considered a rubber-stamp parliament. It passes virtually every measure, resolution and law put forward by the government or the Communist Party.
CNN's Steven Jiang contributed to this report.