China still faces many difficulties and challenges internationally and domestically in economic and social development, according to a government work report to be delivered by Premier Wen Jiabao Monday.

"We are keenly aware of that," said the report distributed to media ahead of the opening of the annual session of the National People's Congress (NPC), China's top legislature.

Describing the global economic recovery as "tortuous", the report said the global financial crisis is still evolving, and the sovereign debt crisis in some countries will not ease any time soon.

The report noted that major developed economies lack impetus for growth and their unemployment rate remains high, while emerging economies face the dual pressures of inflation and slowing economic growth.

Domestically, the report said, it has become more urgent and more difficult to solve institutional and structural problems and alleviate the problem of unbalanced, uncoordinated, and unsustainable development.

"China's economy is encountering new problems," the report said, citing downward pressure on economic growth while prices remaining high in the world's second-largest economy.

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