The recent 20th plenary session of the Chinese Communist Party’s Central Committee, which concluded on July 18 after being delayed for half a year, has attracted attention for its emphasis on concepts such as “China-style modernization,” “state-owned economy,” and “party leadership.” However, despite discussing these issues, the plenary session did not address the current significant crises in the real estate and financial systems, as well as the issue of unemployment.
Analysts believe that the party leadership of the CCP has found it increasingly difficult to reconcile the conflicting interests of maintaining the party’s political power and furthering economic development. The “decision” made at the plenum represents Xi Jinping’s comprehensive “anti-reform” stance, signaling a shift towards a scenario where China will begin a comprehensive process of “state advances, private retreats.”
The official Xinhua News Agency released a summary of the plenary session titled “Central Committee of the CPC on Further Advancing Comprehensive Deepening of Reform and Promoting China’s Modernization,” which spanned over 22,000 words. The term “socialism” appeared 27 times, underscoring the core theme of the meeting. The meeting stressed the importance of “party leadership” and the need to “consolidate and develop the state-owned economy” to advance the concept of “China-style modernization.”
North American investment advisor Mike Sun commented to a media outlet that the expectations for the plenary session to introduce stimulus policies to revive the economy were not met. The future direction of economic development in the coming years will now rely on Xi’s concept of “new qualitative productive forces” and strengthening state-owned enterprises.
Looking ahead, it is predicted that there will be a shift towards the comprehensive implementation of “state advances, private retreats” to achieve the goal of a “Chinese-style socialism,” posing increasingly challenging circumstances for the survival of private enterprises.
Political commentator Lan Shu expressed concerns over the escalating conflict between economic development and the maintenance of the CCP’s political power in recent years. In Lan’s analysis, the rapid growth of privately-owned enterprises has posed a threat to the party’s dominant economic influence. The plenary session marks a turning point in Xi Jinping’s administration towards a full-fledged “anti-reform” stance.
In examining past economic contributions, Chinese business leader Gao Yunlong previously highlighted the significant role played by private enterprises, noting their substantial impact on government revenue, GDP, technological innovation, employment rates, and contributions to overall economic growth.
Lan Shu pointed out that maintaining CCP’s one-party rule has been a consistent policy objective over the decades, with each generation of CCP leaders facing unique challenges. The decision made at the plenary session signals the current administration’s shift away from reform and toward a more closed economic approach.
Addressing the concerns around the real estate market and the financial system, the plenary session’s “decision” mentioned the need to implement measures to mitigate risks in key areas such as real estate, local government debts, and small to medium financial institutions, while also mentioning the establishment of a “rental and purchase” housing system.
Mike Sun interpreted the potential easing of restrictions on the real estate market as a sign that the central government may empower local authorities to implement tailored policies on a city-by-city basis. The effectiveness of local government tax measures in mitigating financial challenges following the collapse of land-based revenues remains to be seen.