The 20th Third Plenary Session of the Chinese Communist Party (CCP) opened today in Beijing and is set to last for four consecutive days. The official promotion before the session emphasized “comprehensive deepening of reforms,” but underscored the importance of “the party’s overall leadership.” Some analysts suggest that issues such as fiscal and tax reforms may be the focus of discussions. However, overseas experts believe that these discussions are just minor adjustments and that the effects of the Third Plenum may turn out to be negative in the current situation where the CCP faces internal and external crises.
Originally scheduled to be held in autumn last year, the Third Plenum has been postponed for nearly half a year before taking place now. As per custom, CCP leader Xi Jinping would report on the work of the Politburo to the Central Committee, with over 370 members including Central Committee members and alternate members attending. The meeting usually takes place at the Jingxi Guesthouse in Beijing.
According to the CCP Politburo meeting held on June 27 this year, the Third Plenum will deliberate on the CCP Central Committee’s decision to “further deepen overall reforms and advance China’s modernization.”
Leading up to the meeting, two CCP official media outlets, People’s Daily and Xinhua News Agency, published articles on “deepening comprehensive reforms.” Mainland Chinese economist Ren Zeping wrote on Sina Weibo anticipating that the meeting would touch upon new quality productivity, fiscal system reforms, financial reforms, marketization of factors, and SOE reforms as major points of discussion.
Currently, China is facing economic challenges such as a real estate crisis, high youth unemployment rates, declining confidence among businesses and consumers, and escalating debts of local governments domestically, while the changing international trade environment and geopolitical tensions globally add to the external pressures. How do overseas experts who have long studied CCP’s political and economic issues view the current situation?
Associate Professor Feng Chongyi from the University of Technology Sydney in Australia told Epoch Times that since 1978, the CCP has introduced some reform measures during the Third Plenum meetings. Xi Jinping also declared reform content during the Third Plenum of the 18th CCP, but failed to implement them. With the Chinese economy facing significant challenges and a severe downturn, the industrial and commercial sectors are hoping for new policies to rescue the economy. However, the CCP seems to be moving in the opposite direction with its major reforms.
Feng Chongyi remarked that although Xi Jinping has mentioned on different occasions that he intends to introduce more significant reform and opening-up policies, the measures being announced currently are in the opposite direction. For instance, rather than further privatizing land, the CCP is strengthening collective economies in rural areas. In the financial sector, instead of liberalizing finance, they are tightening central government control over finance and even closing down state-owned financial institutions, indicating a reverse course of action.
Feng Chongyi believes that the reforms CCP can make are minor adjustments, like those in fiscal and tax reforms and urban management or social governance policies. However, compared to the national security laws and anti-spy laws enacted in recent years, these new measures are much less significant.
Moreover, Wu Sezhi, a researcher at the Cross-Strait Policy Association and advisor to a Taiwan think tank, noted that the delayed Third Plenum, being held almost a year later, clearly indicates problems. He expressed doubts that any economic plans or policies the CCP introduces at this point would have a significant impact. The expectations for China’s future economic development or prospects are likely to diminish given the current challenging economic environment both domestically and globally, with weak investment and consumption, as well as rising unemployment rates.
As for the external environment, Wu Sezhi mentioned that the international community is adopting derisking measures which may pose certain challenges to the Chinese economy. Therefore, he believes that it would be extremely difficult for the Third Plenum, under the ongoing economic and external pressures, to bring about any significant turnaround or bottoming out.
In fact, not only does the international community have low expectations for any major economic reform announcements from the meeting, but similar sentiments also exist within the CCP’s system.
Yao Yang, an economics professor at the National School of Development at Peking University, mentioned in a speech in June this year that many people have high expectations for the Third Plenum, hoping for another wave of reforms or major policy changes. However, he emphasized that the significant reforms in China were completed in the 1990s, and the current focus should be on consolidating those achievements rather than embarking on new reforms.
He stated, “Reform and opening-up have been ongoing for 40 years, and after 2018, we entered into a new era. The main task of the new era is to address the problems arising from the second 20 years of reform and opening-up.”
Premier Li Keqiang, who is considered the executor of Xi’s economic policies, had mentioned during the “Summer Davos” in Dalian in June 2024 that “China’s economy in its pandemic recovery phase needs to ‘strengthen the foundation and nurture the roots’ rather than taking strong measures.” His statement of “not taking strong measures” was censored by the CCP, sparking speculation about whether the Third Plenum would introduce major policy changes.
The CCP has already announced in advance that “the party’s leadership will be integrated into all aspects of the reform” during the Third Plenum.
Feng Chongyi analyzed that since the initiation of reform and opening-up in 1978, China had transitioned into a post-totalitarian era and is now reversing back.
“Mao Zedong had reached the peak of totalitarian rule during the Cultural Revolution. After Mao’s death, the concentration of power among top leaders was decreased, entering a period of collective leadership. The economic route transitioned from the class struggle-centered to economic development-focused, simplifying administrative powers, loosening the Party’s full control over society, opening up a small space relatively to society, and opening up to the international community including foreign investment and trade. But strengthening the Party’s leadership now is a move in the opposite direction, fundamentally contrary.”
Wu Sezhi also expressed that relying on foreign investment to promote economic development has been a crucial route for the CCP from the reform and opening-up until now. However, the current authorities’ emphasis on Party leadership and the enactment of many related laws to safeguard Party security have made foreign investors uncomfortable, leading to withdrawals.
He believes that any so-called openness policies proposed during the Third Plenum, under the priority of politics over the economy, would yield minimal results in reality.
“The general public hopes for an improvement in the current economic issues, but Xi Jinping’s development path, to some extent, is entirely contrary to a market economy. Therefore, I believe that the future development under this model will be negative, and the Third Plenum may only have a negative impact.”
The business consulting firm Rongding Group recently indicated that the Third Plenum is not the place for detailed policy recommendations or short-term economic stimulus measures. The organization pointed out that the critical issue for the Third Plenum lies in whether Beijing can demonstrate to the outside world its ability to integrate these reform measures into a coherent plan to quickly reverse the downward trend of the Chinese economy.
In a national science and technology conference on June 24, 2024, Xi Jinping proposed building a technological powerhouse by 2035. On June 25, Deputy Premier Ding Xueliang made his debut as the head of the Central Science and Technology Committee, emphasizing the strategic goal of anchoring the inauguration of a technological powerhouse by 2035 and promoting technological innovation through a new nationwide system.
Wu Sezhi observed that Xi Jinping’s economic path emphasizes two main points. Firstly, it stresses self-development, including self-sufficiency in technology. However, the current energy and technological capabilities of China present difficulties in achieving this goal. Secondly, Xi Jinping places priority on regime security through emphasizing national security via legislative measures. However, “these two trends completely reverse the past development model of China’s economy and are not in line with the current trend of global development.”