The upcoming third plenary session of the 20th Central Committee of the Chinese Communist Party (CCP), which has been delayed for nearly ten months, is expected to convene on July 15th to discuss economic and political policy measures for the next five to ten years. Overseas observers have expressed pessimism towards this conference.
In recent months, widespread flooding has ravaged regions in southern and central China, with a significant breach of the Dongting Lake embankment in Huarong County, Hunan Province on July 5th, resulting in major social disasters and economic losses. Wu Guoguang, a former advisor to Zhao Ziyang and a political commentator, wrote on Voice of America on July 12th, describing the third plenary session convening amidst the chaos in China under the leadership of Xi Jinping as deeply concerning.
Wu Guoguang pointed out that under Xi Jinping’s pursuit of centralized power, the CCP’s governance capacity has been continuously declining. This not only contributes to the disasters caused by floods but also serves as a fundamental reason for the difficulties faced by the third plenary session of the 20th Central Committee.
According to Wu Guoguang, in order to maintain his high level of personal authority, Xi Jinping must exert efforts to suppress and eliminate any factors that could bring economic and social vitality to China, ultimately harming governance, development, and the livelihood of the people. Xi Jinping is unlikely to choose to relinquish or at least relax his highly centralized authority to improve governance, development, and the people’s livelihood.
It is noted in the article that there is growing discontent towards Xi Jinping within the CCP system. Ahead of the third plenary session, Xi is expected to escalate anti-corruption efforts and demonstrate his strong control over the CCP military, strengthening deterrence and control over CCP officials. Consequently, in the first half of this year, 36 senior officials at or above the vice-minister level in China have been investigated, marking a 64% increase compared to the same period last year when 22 senior officials were probed.
Wu Guoguang believes that for officials who have fallen from grace, it is a hellish situation, while for Xi Jinping, it is an opportunity to enhance and exhibit his power in a fervent environment. Connecting the two, the former highlights the latter’s predicament.
Regarding the upcoming third plenary session of the 20th Central Committee, Wu Guoguang emphasizes that regardless of what innovative measures may be presented to make people believe in what Xi Jinping wants them to believe, neither he nor his regime can escape the spiraling effect between highly centralized authority and governance crisis. This reality could potentially normalize and institutionalize the dire situation faced by the Chinese population.
Previous third plenary sessions have primarily focused on economic reforms, with the CCP claiming that this session will introduce significant measures to “deepen reforms” while upholding the “comprehensive leadership of the party.”
Dissident and political scientist Wang Dan raised three concerns in his commentary article on July 11th. Firstly, he questioned the feasibility of implementing any reform as long as the principle of upholding the party’s leadership remains intact. He argued that true reform in China necessitates breaking free from the situation where everything must be led by the party, as failure to do so would result in regression rather than genuine reform.
Secondly, Wang Dan pointed out the contradiction between the party’s leadership and the principle of “putting the people at the center.” If everything is to be under the party’s guidance, how can the focus truly be on prioritizing the people?
Lastly, Wang Dan questioned how it is possible to uphold the socialist system with Chinese characteristics without wavering while also promoting “institutional innovation.” He concluded by stating that there should be no illusions about the so-called “deepening reforms” to be discussed during the third plenary session.
Ahead of the third plenary session, China is facing challenges such as weak consumer demand, overcapacity, and criticism from the US and EU for flooding foreign markets with cheap goods, distorting trade and impacting global markets. The US has already imposed new tariff actions on a range of products from steel and aluminum to electric vehicles and solar panels, and the EU recently announced tariffs on electric cars.
Simultaneously, internal challenges for the Chinese economy include a crisis in the real estate market, rising unemployment rates, and weak consumer spending.
According to data released by the National Bureau of Statistics of China on July 10th, in June, China’s Consumer Price Index (CPI) rose by 0.2% year-on-year, the lowest in three months. Food prices dropped by 2.1% in June, but pork prices surged by 18.1% compared to the same period last year. The CPI decreased by 0.2% monthly.
Economist Huang David of the US analyzed on July 11th that without considering the weight of pork prices, China’s CPI isn’t merely sluggish but indicates a certain level of deflation, demonstrating a continuous decline in residents’ purchasing power and the diminishing capacity of economic activities and social profits.
In April this year, Beijing announced a plan to stimulate the economy through a program offering trade-ins for old cars and home appliances, aiming to generate $29.3 billion in spending and boost China’s overall GDP by 0.5%. However, Alicia García-Herrero, the Chief Economist of Natixis for Asia-Pacific, indicated to Voice of America that these plans have not been very successful, as some subsidies have vanished due to concerning fiscal situations at the local government level.
Leading up to the third plenary session, authorities have been promoting a new round of fiscal and taxation reforms. Meanwhile, various regions in China have set up “Joint Tax Law Enforcement Centers” to investigate taxation issues, resulting in some private enterprises facing audits for tax payments dating back 30 years.
Researcher Song Guocheng of the International Relations Research Center at National Chengchi University in Taiwan expressed to Radio Free Asia that this session of the third plenary will confront five major challenges, prioritizing the resolution of fiscal and taxation issues. With the collapse of the land god of wealth, the real test for the third plenary session will be whether it can address the real crisis in China, reflecting the CCP’s willingness to solve problems. Under institutional constraints and erratic decision-making by a single individual, the third plenary session will focus on safeguarding the party before reviving the economy.
Veteran political economist Wu Jialong previously noted to the Epoch Times that the CCP authorities have been ineffective in offering viable solutions to economic challenges, essentially giving up on restarting economic growth. Emphasizing security over development, the key focus has shifted to stability and control, which are deemed more critical than investment.