Credits: CNN
Beijing, China – The ruling Communist Party of China commenced a pivotal four-day meeting on Monday, aimed at devising a strategy for self-sufficient economic growth in an era marked by heightened national security concerns and restrictions on access to American technology. While the focus is on long-term economic planning, immediate measures to counteract a prolonged real estate downturn and a sluggish post-COVID-19 recovery are also anticipated.
Economic growth in China slowed to 4.7% annually in the April to June quarter, falling short of expectations after a strong start in the first three months of 2024, the government reported on Monday. The annual growth target is around 5%, but persistent issues such as a property crisis, steep local government debt, weak consumption, and high unemployment have hampered recovery efforts.
“There’s a lot of unclarity of policy direction in China,” said Bert Hofman, former World Bank country director for China and a professor at the National University of Singapore. “This is a point in time where China needs to show its cards.”
Chinese leader Xi Jinping addressed the closed-door meeting, presenting a draft decision on “deepening reform and advancing Chinese modernization,” according to the official Xinhua News Agency. Security was notably heightened in central Beijing, with uniformed guards at subway stations and neighborhood-watch personnel stationed in public areas.
The meeting, known as the Third Plenum, is expected to send a clear message to local government officials and others about future policy directions. While many anticipate confirmation of the path laid out by Xi Jinping, there is hope for adjustments to address concerns that increased government control over business and society is stifling economic growth.
In past Third Plenums, significant shifts have occurred, such as in 1978 when then-leader Deng Xiaoping began opening China’s markets to the world, and in 2013 when President Xi Jinping hinted at loosening the controversial one-child policy. This year’s Plenum, attended by over 370 high-ranking Communist Party members, has similarly high expectations.
State-controlled media has been promoting an optimistic outlook. An editorial in The Global Times indicated that “reform-focused policies” are high on the agenda and could usher in a “new chapter.” Xinhua referred to the reforms as “comprehensive” and “unprecedented,” while the People’s Daily editorial spoke of a “new era of reform and opening up,” invoking Deng Xiaoping’s 1978 rhetoric.
However, observers remain cautious about the potential for bold ideas or debate under Xi’s centralized leadership. Some see the meeting as a rubber-stamping exercise for pre-decided policies.
Economists, too, are skeptical about immediate impacts. “It has little impact on near-term growth,” said Qian Wang, Asia Pacific chief economist at Vanguard, noting that the focus will be on long-term reforms to “unleash long-term growth potential.”
Nonetheless, analysts are keenly watching for announcements that signal the Communist Party’s economic priorities as China navigates through its current challenges and charts a course for future growth.