In his annual "state of the nation" address to open parliament, Wen gave the most detailed blueprint yet of a four-trillion-yuan (585-billion-dollar) stimulus plan aimed at steering China through the downturn.

The premier acknowledged the Chinese economy, the third-biggest in the world, was hurting and the climate was not expected to get better soon in the face of a global recession that has weakened demand for Chinese goods.

"We face unprecedented difficulties and challenges. The global financial crisis continues to spread and get worse," Wen told the 3,000 delegates gathered for the Communist Party's showpiece political event of the year.

"Demand continues to shrink on international markets. The trend for global deflation is obvious and trade protectionism is resurgent," he told the lawmakers at the start of the nine-day gathering.

But Wen said China's economy was still expected to grow by about 8.0 percent this year -- a rate officials have stressed is needed to prevent social unrest triggered by widescale unemployment.

"We are fully confident that we will overcome difficulties and challenges, and we have the conditions and ability to do so," Wen said, delivering a rare bit of relatively positive news on the global economic front.

China's economic growth dipped to 6.8 percent in the final quarter of last year, worrying figures for a government long used to double-digit expansions and marking a dramatic slowdown from 13.0 percent growth in all of 2007.

The slowdown in China's economy, which is reliant on exports to developed economies that are now in recession, has made 20 million rural migrant workers jobless in recent months amid countless factory closures.

China typically sees tens of thousands of protests each year even in economic boom times, and rising unemployment has fuelled fears among the communist leadership of social unrest.

Wen also acknowledged problems that could fuel tensions and had been exacerbated by the crisis, such as an inadequate social safety net and health care system, as well as a wealth gap.

But he said the 8.0-percent growth target was achievable and would provide a sound platform for creating millions of jobs and soothing social tensions.

"Maintaining a certain growth rate for the economy is essential for expanding employment for both urban and rural residents, increasing people's incomes and ensuring social stability," he said.

Wen's assessment was more optimistic than that of the International Monetary Fund, which has forecast economic growth for China this year of 6.7 percent.

Highlighting unrest concerns, security was tight around the Great Hall of the People, where parliament was sitting, and dissidents told AFP that authorities had placed new restrictions on their movements.

"There are police stationed outside 24 hours and I can't go anywhere unless I travel in a police car," dissident Gao Hongming told AFP by phone from his Beijing home.

Adding to the sense of unease are tensions surrounding China's 58-year rule of Tibet as a sensitive 50th anniversary of a failed uprising falls on March 10.

Wen gave details of the wide-ranging plan for the four-trillion-yuan stimulus package, which is to be spent over two years and contribute to a record budget deficit of 950 billion yuan in 2009.

This included plans to boost domestic consumption, raise incomes for the nation's roughly 800 million people living in the countryside and give support for the steel, auto and other industries.

Spending to improve the social safety net will increase 17.6 percent this year to 293 billion yuan, Wen said.

The budget for medical and health care will rise 38.2 percent to 118.06 billion yuan.

The plans had a generally positive impact on regional stock markets, with the Chinese, Australian and Japanese bourses rising on Thursday but Hong Kong's declining. European stock markets slid in morning trade.

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