Chinese Premier Wen Jiabao said the nation lacks a sustainable growth model and faces mounting "social problems," as he ends a decade in power that saw the economy grow fourfold to become the world's second largest.

"We are keenly aware that we still face many difficulties and problems," Wen told almost 3,000 delegates in his final report to the National People's Congress in Beijing today. He set an economic growth target of 7.5 percent for this year, unchanged from 2012, and an inflation goal of 3.5 percent.

Wen steps down at the congress, which runs through March 17, after overseeing China's rise to an $8 trillion economy that surpassed Japan and Germany and sustained its expansion through the global financial crisis. Those achievements have come at the cost of surging inequality, environmental degradation and growing financial risks, challenges that he leaves for incoming Premier Li Keqiang.

"There are also many problems Wen left behind, and the new leaders are to face and tackle," said Zhang Zhiwei, chief China economist at Nomura Holdings Inc. in Hong Kong. They include "the risk of a property bubble, significantly increased local government debt, income equality and worsening pollution," said Zhang, who previously worked for the International Monetary Fund.

An annual expansion target of 8 percent was in place from 2005 to 2011. Last year's inflation goal was 4 percent. Wen reiterated that interest rates and the yuan's exchange rate will become more market-based.

China needs to navigate a global recovery that's "full of uncertainty," Wen said. In the domestic economy, "unbalanced, uncoordinated and unsustainable development remains a prominent problem," he said, repeating a phrase that he's used previously. "Social problems have increased markedly."

David Fuller's view This was an unusually sober speech by the departing Chinese Premier who saw the economy expand by fourfold during his ten years of leadership.

However, China's meteoric growth over the last three decades, in what is also the world's most populous country, is an astonishing achievement. Inevitably, this rapid growth has also created problems.

Among the main current problems are corruption, the wealth disparity, the risk of a further property bubble, and alarming pollution. None of these are easy to deal with but if the government could promote equity investing, this might reduce property speculation. I also think wealth inequality is less of an irritant if people are optimistic about increasing their own wealth, including via stock market investments which can be very empowering during a bull market. China's pollution, particularly around Beijing, is horrendous. Coal-fired plants are certainly a major contributor. The government is beginning to close them and this may temporarily slow GDP growth.