The 7.5 percent target is at the top end of market expectations, which should be positive for market sentiment, according to Li Wei, a senior economist with Standard Chartered Plc.

"This target sends a strong signal to the provinces that while the central government is pushing for some painful reforms, it will still guarantee a certain level of growth," said Li.

Infographic: Five key words from Li's govt report

Yuan exchange rate's floating range widened

"Though there is downward pressure, the government has enough ammunition to deal with it. Changes in credit and fiscal policies, for instance, can achieve an instant effect," said Li.

Moreover, as reform continues, the private sector will help to rejuvenate the economy and drive growth, Li added.

Wang Haifeng, a researcher with the Institute for International Economic Research at the National Development and Reform Commission, holds a similar view.

"There is still enough room for policy maneuvering if the economy slows down," said Wang.

"Meanwhile, improvements in the developed economies, especially the US and EU, will be good news for China's economy in 2014," he added.

There is still huge growth potential in the service sector, urbanization process and consumption upgrading, which will enable the country's growth to stabilize at about 7 percent in the coming five to 10 years, said Wang.

The service sector, for instance, currently generates about 46 percent of GDP, compared with about 80 percent in developed countries, indicating huge growth potential.

"There are lots of opportunities in the education, health, travel and legal services, as demand in those sectors hasn't been met yet," said Wang.