China announced Thursday it is setting its economic growth target at 4.5% to 5% for the coming year, marking the lowest growth target the country has established since 1991.

The target represents a reduction from the "around 5%" goal set in 2023, and is the first time China has lowered its growth target since that previous cut. The announcement comes as China's economy faces significant headwinds both domestically and internationally.

The world's second-largest economy is grappling with multiple challenges, including a prolonged property sector slump that has weighed on economic activity. China is also contending with deflationary pressures and the ongoing impact of trade tensions, including tariffs that have affected its export-oriented manufacturing sector.

Beyond domestic issues, China faces growing uncertainty in the global economic environment, which has contributed to the more cautious growth projections. The lower target suggests Chinese leadership is taking a more measured approach to economic planning amid these various pressures.

The growth target setting is closely watched by global markets and policymakers as an indicator of China's economic trajectory and policy priorities. China's economic performance has significant implications for global growth, given the country's substantial role in international trade and supply chains.