On April 30, 2024, the Chinese Communist Party’s political bureau announced that the Third Plenum would be held in July. The meeting has attracted attention for its fervent endorsement of reform and opening up, as well as its emphasis on the “integration of the Yangtze River Delta.” Experts believe that the significant setbacks in the CCP’s economic policies indicate the country’s economic challenges, prompting an attempted return to reform and opening up. However, critics argue that this is merely empty political rhetoric and unlikely to bring concrete results.
According to a report from Xinhua News Agency, the political bureau meeting highlighted reform and opening up as an “important magic weapon,” emphasizing the need to continue pushing forward with reforms. The meeting notably reiterated six “inescapable requirements” for reform and opening up, stating that the entire party “must consciously” prioritize reform and attract foreign investment.
Xi Jinping has previously been associated with a return to Mao Zedong’s path, which would mean a reversal of decades of reform and opening up towards a more leftist approach. While references to reform and opening up were maintained in official discourse, the recent emphasis of the political bureau meeting marks a notable shift in focus.
Speaking to Epoch Times on April 30, Shen Mingshi, a researcher and director at the Taiwan Institute for National Defense and Security Studies, expressed doubts about Xi’s current approach. He noted that Xi’s previous emphasis on achieving common prosperity and state progress over individual advancement has not shown significant changes in related policies. Shen suggests that if Xi indeed announces major reforms at the Third Plenum in July, it would indicate that he has faced significant setbacks and found China’s economic situation irreparable without a return to reform and opening up.
Shen Mingshi questioned whether foreign businesses and industries that have already left the Chinese mainland due to tightened regulations and security measures would consider returning. With stringent national security laws and crackdowns on espionage, the prospects for a genuine shift towards reform and opening up remain uncertain.
Suzi Yun, director of the Department of Strategy and Resources at the Taiwan Institute for National Defense and Security Studies, suggested that the language used in the Communist Party’s political bureau meeting indicates a recognition of past strategic economic mistakes, prompting a revival of reform and opening up policies.
“The CCP’s economy is in serious decline, which is why they are once again promoting reform and opening up as a banner. Xi Jinping’s recent visits to the western regions, akin to Deng Xiaoping’s Southern Tour, signify significant economic troubles for the CCP,” noted Suzi.
However, Suzi believes that Xi’s current rhetoric on reform and opening up is merely political posturing, as the state’s security measures are driving away foreign investments. With the constant crackdown on espionage by the state security apparatus, foreign investors have raised concerns about operating in China.
Suzi Yun highlighted how instability resulting from insufficient domestic demand, economic pressures on businesses, heightened risks in key sectors, and challenges in the external environment are hampering China’s economic recovery. This dire situation has led to the depletion of financial resources, with local governments resorting to unpopular measures like tapping into citizen’s savings.
A stable and open environment is essential for fostering innovative industries and economic recovery. Despite China’s traditional industries losing foreign investments and lacking key technological advancements, the push for reform and opening up appears to be a last-resort effort to revive the economy. However, the conservative political stance combined with necessary economic openness may present challenges and limit the effectiveness of such measures.
Suzi Yun added that political reforms are crucial to drive economic changes through reform and opening up policies. However, the current direction of Xi Jinping’s team in promoting these policies is flawed, rendering the approach ineffective.
“Only a few companies may benefit, such as Elon Musk’s Tesla venturing into Beijing in the hopes of reviving sales. While Beijing has granted permission for Tesla cars to operate nationwide, this is merely a short-term lifeline and lacks long-term viability,” Suzi noted.
The recent Communist Party political bureau meeting focused on discussing the current economic situation and economic work, with an emphasis on advancing the development of the “Yangtze River Delta integration.”
Suzi Yun remarked that while the Yangtze River Delta and Pearl River Delta regions were once crucial economic hubs for the CCP, they have now faced hollowing out as foreign investments depart. The lack of political reforms in conjunction with these announcements has deterred foreign businesses from entering these regions.
Moreover, Xi Jinping’s ambitions to develop the western regions have been marred by challenges, as a reliance on initiatives like the China-Europe railway faces barriers from sanctions on goods like electric vehicles, solar panels, and batteries. Suzi suggests that without genuine political freedoms and democracy, these strategies are likely to offer only short-term tactical benefits.
The postponement of the Twentieth Third Plenum, originally scheduled for the end of last year, until July this year, has led to speculation that the CCP may be grappling with complex economic issues, potentially causing delays in convening the crucial meeting.