China moved Friday to quash Hong Kong's pro-democracy movement by unveiling plans for a new security law at the start of its annual parliamentary session that also laid bare the "immense" economic challenges caused by the coronavirus.

The 3,000-member National People's Congress (NPC) began with a minute of silence for China's victims of the coronavirus before Premier Li Keqiang delivered his annual version of the US president's "state of the union" address.

"At present, the epidemic has not yet come to an end, while the tasks we face in promoting development are immense," Li told mask-wearing delegates in Beijing's cavernous Great Hall of the People, while also touting China's success in suppressing the contagion.

Citing "great uncertainty" ahead, Li took the rare move of refraining from announcing a 2020 growth target for China's pandemic-battered economy, offering only a vague promise to address mounting joblessness and to improve living standards.

- Hong Kong under siege -
The most controversial move at the NPC opening was the introduction of a proposal to impose a security law in Hong Kong -- immediately denounced by the US and pro-democracy figures in the financial hub who called it a death sentence for the territory's unique freedoms.

The draft proposal, to be debated by Beijing's top leaders, will "guard against, stop and punish any separatism, subversion of the national regime, terrorist group activities and such behaviours that seriously harm national security".

It would authorise Chinese lawmakers to directly enact long-delayed Hong Kong security legislation itself at a future date, rather than leaving it up to the territory's administration.

China made clear it wanted the legislation passed after Hong Kong was rocked by seven months of massive and sometimes violent pro-democracy protests last year.

An initial bid to enact such legislation in 2003 was shelved after half a million people took to the streets in protest. 

Wang Chen, deputy chairman of the NPC Standing Committee, told delegates Beijing must "take powerful measures to lawfully prevent, stop and punish" anti-China forces in Hong Kong.

One of the proposal's articles opens the door for Beijing to increase its presence in the financial hub by allowing the central government to set up, "when needed", agencies in Hong Kong "to fulfill relevant duties to safeguard national security in accordance with the law."

China's army already has a garrison in Hong Kong but soldiers have not intervened in the protests. 

The city's mini-constitution allows the local government to request help from PLA garrisons in the city in the event of a public order breakdown.

"This is the end of Hong Kong, this is the end of 'One Country, Two Systems', make no mistake about it," Civic Party lawmaker Dennis Kwok told reporters, referring to China's description of the territory's status.

"One Country, Two Systems" gives Beijing ultimate political sway over Hong Kong but allows the former British colony to retain liberties unseen elsewhere in China.

However pro-democracy leaders also voiced defiance and called for people in Hong Kong to once again take to the streets.

Stocks tumbled in the city Friday on news of the security law move.

US President Donald Trump promised to respond "very strongly" once details emerge, and US senators introduced legislation to impose sanctions on any entity involved in curbing Hong Kong's autonomy.

Targets could include police who crack down on demonstrators, Chinese officials involving in Hong Kong policy, and banks that conduct transactions with anyone who infringes on its freedoms.

- Economic uncertainty -
Although infection numbers have dwindled, China is still recovering from the COVID-19 outbreak that first appeared in the central city of Wuhan late last year and spread globally.

China has faced accusations led by Trump that it mishandled its initial response, leading to nearly 330,000 deaths and economic carnage worldwide.

The pandemic has sent US-China tensions spiralling to new depths, with Trump this week saying Beijing was responsible for "mass worldwide killing".

China's economic growth shrank 6.8 percent in the first quarter because of the virus, its first contraction in decades.

Li had originally been expected to announce a 2020 growth target of around six percent -- but the pandemic has scrambled expectations, leaving millions of Chinese jobless and imperilling countless businesses.

Still, the government announced Friday it would increase its military budget by 6.6 percent.

The budget will be set at 1.268 trillion yuan ($178 billion) for the year -- the second biggest in the world after the US but continuing a trend of slowing increases.

China's rapidly growing and modernising armed forces are a source of concern in the United States and neighbouring Asian countries nervous about Beijing's rise.

The NPC's highly choreographed annual meetings are conducted amid great pomp aimed at underlining Communist Party control, but this the session was delayed more than two months as China struggled with the coronavirus outbreak, and reduced to only a week.