After the high inflation and dramatic protests of 1989, China endured a spell of economic "rectification" and austerity. But by 1991 its leaders were ready to return to growth. At that year's meeting of the National People's Congress (NPC), China's rubber-stamp parliament, the government announced a "moderate" growth target of 4.5%. "We will strive to exceed these targets in practice," it said. Exceed them it did. The economy grew more than twice as fast as envisaged.

That meeting was the last time China set itself a growth target as modest as the goal announced on March 5th, the opening day of this year's parliament. Roughly 2,800 delegates heard Li Qiang, the prime minister, say that GDP this year should grow by 4.5-5%, a notch lower than last year's target of "around 5%".

Alas, this target will not be as easy to meet as the modest goal of 35 years ago. China is a far richer, better appointed country than it was in the early 1990s, with less scope for rapid catch-up growth. Its GDP per person reached almost $13,900 last year, 15 times its level in 1990. Its latest five-year plan, which the NPC delegates will also review this week, foresees China becoming a "mid-level developed" economy in 2035, when its GDP per person should be double its level in 2020. China is also an older country than it was 35 years ago and its workforce is shrinking. According to figures released on February 28th, employment fell in 2025 by almost 1.3%.

On top of these structural difficulties are some cyclical dangers. Exports could disappoint this year, having far exceeded expectations in 2025. Economists were forecasting a smaller contribution to growth from trade in 2026 even before the Iran war disrupted shipping routes and rocked some markets in the Middle East.

Consumers will also get less of a boost from the government's "cash-for-clunkers" scheme, which subsidises households who upgrade their cars, phones and appliances. The government has broadened the offer's scope this year-it now includes AI glasses, for example, and an emphasis on "age-friendly" home products like nursing beds and fall-prevention systems. But Mr Li said the funding would be cut by a sixth to 250bn yuan ($36bn). Officials boast that last year's scheme subsidised 366m purchases worth 2.61trn yuan. The thinner scheme planned for this year will struggle to match that sum. And to contribute to growth, it must exceed it.

Besides exports and consumption, the third engine of demand-investment -is threatened by a government campaign against overcapacity, price wars and "involution" (officially translated as "rat-race competition"). Mr Li promised to fight unfair competition with "greater intensity" this year, by raising quality standards, regulating production and enforcing laws against predatory pricing. This combination of threats to investment, consumption and trade is contributing to what Ting Lu of Nomura, a bank, has called a "demand cliff". He forecasts that growth will reach only 4.3% this year, falling short even of the government's diminished target.

To offset this lack of demand, the government will have to ease its fiscal stance. But it does not seem ready to accept that. At the NPC it said its headline budget deficit would remain at 4% of GDP in 2026, the same as last year. It has also chosen not to increase the quota of "special" bonds issued by local governments, traditionally reserved for revenue-generating infrastructure projects, but now used for all sorts of things, including buying unsold property and idle land. The government raised rural pensions by a mere 20 yuan a month, the same as last year, increasing the minimum benefit to 163 yuan. It will also set aside 100bn yuan to subsidise consumer loans.

That grudging support will not be enough to solve China's problems of chronic overcapacity and deflation. Falling prices have depressed nominal growth, which makes no adjustment for inflation (see chart). That has weighed on corporate revenues and workers' pay packets. The government seems to think nominal growth will do a little better this year, increasing by about 5%, judging from its budget maths. Mr Li also promised to engineer a "reasonable, modest rebound" in consumer prices. Back in 1991, the government's modest targets were reassuring. Thirty-five years later, more ambition would be welcome.