On June 11th, the Chinese Communist Party convened a meeting of the Committee for Deepening Reforms, with one side claiming to improve the “modern enterprise system” and “separation of government and enterprises,” while also stating the intention to “improve the institutional mechanisms for the Party’s leadership of state-owned enterprises,” and emphasizing the need for private enterprises to “focus on the role of Party building.” The Party had previously attempted to promote the theme of “reform and opening up” before the Third Plenary Session, but the Reform Committee’s actions seem to go against the spirit of “reform.” The CCP refuses political reform, and economic reform continues to regress.
On May 23rd, CCP leader Xi Jinping hosted a symposium in Jinan, Shandong. On May 25th, Xinhua News Agency published an article titled “Important Signals of Reform Released by this Symposium Before the Third Plenum,” where it stated that “the Party Central Committee attaches importance to seeking advice and has released important signals for further comprehensive deepening of reforms and advancing China’s modernization.”
Before the Third Plenum, the signals of “reform” deliberately released by the Zhongnanhai seemed to be responding to the voices for reform both domestically and internationally, but “further comprehensive deepening of reforms” and “China-style modernization” are actually two opposite paths. The CCP refuses to give up on the “China-style modernization” and only mentions “economic system reform,” revealing its true attitude towards “reform.”
On June 11th, the CCP Central Committee for Comprehensive Deepening Reform held a meeting, and the Party media reported that the meeting reviewed and approved documents including “Opinions on Improving the modern enterprise system with Chinese characteristics,” “Guiding Opinions on Improving the guarantee mechanism for grain farmers’ income and the compensation mechanism for major grain-producing areas,” and “Opinions on Building a globally competitive environment for scientific and technological innovation.”
Xinhua News Agency reported that Xi Jinping, the CCP leader, mentioned in his speech that the Party should “strengthen Party leadership, improve corporate governance, and promote enterprises to establish a sound system with clear property rights, defined responsibilities, and the separation of government and enterprises.”
The so-called “Opinions on Improving the modern enterprise system with Chinese characteristics” discussed by the Reform Committee is a party document and not a genuine law. The Party continues to override the law, claims to “separate government and enterprises,” but also wants to “strengthen the Party’s leadership.” State-owned enterprises are destined not to be able to establish a modern enterprise system and are unlikely to truly become modern enterprises. In the domestic market, state-owned enterprises mainly rely on industry monopolies, government investment, and government orders for survival; in the international market, they basically rely on subsidized low-price dumping. State-owned enterprises under CCP control are a monstrosity and a burden on China’s economic development.
Xinhua News Agency reported that the meeting pointed out that in order to improve the modern enterprise system with Chinese characteristics, it should “respect the role of the enterprise as the main body of operation” and also “strengthen the Party’s comprehensive leadership over state-owned enterprises, and perfect the institutional mechanisms for the Party to lead state-owned enterprises.”
If the Party fully controls enterprises, it is impossible for enterprises to have the “main body of operation.” The secretaries in Zhongnanhai who write for the Party’s top leaders probably understand that such statements are contradictory, but they have to write it this way, and the top leaders follow suit in meetings, with no one daring to raise objections.
The report also stated that it “encourages qualified private enterprises to establish a modern enterprise system” and “emphasizes the role of Party building.”
The CCP wants to fully control state-owned enterprises and also oversee private enterprises. The type of enterprise system that private enterprises establish should be determined by the entrepreneurs themselves, but the CCP insists on giving orders and making decisions for them. The existence of the CCP is the biggest obstacle to China’s economic development.
On June 7th, Li Keqiang presided over an Executive Meeting of the State Council, one of the topics being to discuss the “Provisions on the implementation of the Registered Capital Registration Management System of the Company Law of the People’s Republic of China (Draft).” The report stated that this is “necessary to implement the requirements of the newly revised Company Law and optimize the business environment.”
The so-called laws such as the “Company Law” put forth by the CCP are just empty words, and everything still needs to follow the Party’s orders. Faced with such a business environment, private enterprises and foreign enterprises may have no choice but to retreat. The false “reform” signals released by the CCP before the Third Plenum are quickly revealing their true nature.
In recent years, the CCP has rapidly deteriorated relations with the United States and Western countries. Under various technology sanctions and blockades, the CCP continues to boast about “indigenous technological innovation.” However, the drastic turn of events in this CCP reform meeting on June 11th indicates that they might understand that such claims of “indigenous technological innovation” are not feasible.
Xinhua News Agency reported that at the meeting, Xi Jinping stated that “opening up to promote innovation, improving the system for opening up in science and technology… actively integrating into the global innovation network… and filling in the gaps in the open innovation system.”
The CCP reform committee held the meeting under the banner of “openness,” now rephrased as “promoting innovation through openness,” but the mention of “indigenous technological innovation” was conspicuously absent. This shift might indicate their struggles in various technological fields. When there are no longer objects to copy and imitate, “innovation” becomes merely a slogan.
The report also noted that the meeting emphasized the need to “combine ‘going out’ with ‘bringing in,’ participate in global technology governance… focus on solving key problems to ensure the effective recruitment, retention, and utilization of talent.”
With “indigenous technological innovation” proving to be inadequate, the CCP must rely on foreign talent. In reality, this is just a new wording for the existing “Thousand Talents Program.” The CCP is attempting to deceive experts who hold advanced technological achievements abroad to come to China, continuing the practice of imitation rather than true “innovation” within mainland China. While Western countries are actively building a “high wall around a small yard” against the CCP, the CCP’s claim to “participate in global technology governance” is merely a facade to enhance its own image.
In 2024, China will see another 11.79 million university graduates, with a considerable portion pursuing postgraduate and doctoral studies. However, a large percentage of them, unable to support “indigenous technological innovation,” may struggle to find jobs that match their qualifications.
On June 11th, People’s Daily published an article titled “New Round of Education Power Index Released for 2024 Dragon Boat Festival Holiday with 110 Million Domestic Tourists.” According to the article, the China National Academy of Education Administration released the results of the new round of the Education Power Index, stating that China “has progressed the fastest since 2012” and that “building an education powerhouse, higher education is the leader… In 2023, China’s gross enrollment rate in higher education reached 60.2%, narrowing the gap with the average level of the top 15 countries (over 86.9%).”
For the past few years, millions of university graduates have entered the workforce annually, with many pursuing further studies. A significant number of them may not be engaged in scientific and technological work, but rather seeking employment opportunities. However, the article claims that this “has laid a solid talent foundation for cultivating and developing new productive forces.”
The Party media sings praises to deceive the public, while the top CCP officials likely understand the reality. Mainland Chinese universities have not truly nurtured many talented individuals, but have mostly exploited the hard-earned money of students’ parents through the economic system of higher education. As the technological gap between China and the world widens again, the slogan of “indigenous technological innovation” is ineffective, forcing CCP high-ranking officials to rely on “going out” and “bringing in.” However, the landscape is different now, with various countries highly alert to the threats posed by the CCP. The road of imitation and plagiarism is narrowing, leaving little room for actual innovation in mainland China.
The recent CCP reform meeting also mentioned the need to “ensure food security” and “protect and mobilize farmers to actively engage in grain cultivation,” proposing to “improve the guarantee mechanism for farmers’ income from grain cultivation and the compensation mechanism for major grain-producing areas.”
Chinese farmers have long been oppressed by the CCP. While Deng Xiaoping abolished the collective farming system, farmers still do not own the land. Public grain delivery has become a prerequisite for farming, making all farmers in China effectively tenants of the CCP. The CCP eradicated the landlord class only to become the largest landlord itself, controlling the essential elements needed for food production, ultimately controlling most of the grain crops and pricing.
Farmers have to purchase agricultural materials at high prices from the CCP, many requiring loans and having to pay agriculture taxes, only to sell their grain to the CCP at low prices. This cycle ensures they cannot make profits, let alone become wealthy, leading many to seek employment elsewhere. The CCP’s control over food production perpetuates a wartime system that has never relaxed.
Food security became a focus of the recent CCP reform meeting, yet no actual reform measures were proposed, with a reliance on maintaining grain production through subsidies. The long-term oppression of farmers by the CCP, where farmers are unable to profit from grain cultivation, is exacerbated by the CCP’s false token gestures of subsidies, creating the illusion of a benevolent act. Deng Xiaoping’s rural reform only slightly loosened constraints for farmers, and the critical issue of land ownership remains unaddressed—a root cause of China’s food crisis.
Developed agricultural countries like the United States have long employed private farming models, promoting mechanized operations and scale-oriented management. This approach not only reduces costs, improves efficiency, and advances agricultural technology but also reduces the need for labor, driving urban development. The CCP continues to control land, where reforms merely shift from collective farming to small household labor, constraining a significant labor force, hindering efficiency, impeding scale operations and mechanization. Additionally, the planning system of the CCP stifles technological innovation, as the country remains reliant on seeds from the US and the West.
The Xinhua News Agency reported that the meeting emphasized the need to “promote the organic connection between small-scale farmers and the development of modern agriculture.”
This is merely a theoretical discussion, as small-scale farmers lack the funding, strength, and motivation to develop modern agriculture, and they do not own land. Growing grains are not profitable, leaving them no choice but to seek employment opportunities elsewhere.
The recent CCP reform meeting did not discuss deepening rural reform, and simple subsidies are insufficient to guarantee food security. As long as the CCP exists, it will not concede land ownership to farmers or future farm owners. With the CCP nearing its end, it contemplates continuing to prolong its survival using wartime systems, maintaining strict control over land and agricultural production. Only with the CCP’s demise can there be an end to the sorrow of farmers.
During this CCP reform meeting, Li Keqiang, as the Vice Chairman of the Reform Committee, participated alongside Wang Huning and Cai Qi, who also hold vice chairmanship titles. However, they can only follow Xi Jinping’s lead and refrain from expressing their own opinions.
On June 7th, Li Keqiang presided over an Executive Meeting of the State Council, where the current real estate market situation and the construction of a new development model for real estate development were discussed. Interestingly, such a crucial topic wasn’t on the agenda for the CCP reform meeting, as the Party media did not mention it at all.
The CCP State Council’s Executive Meeting on June 7th called the development of the real estate industry “related to the overall economic operation and financial stability,” urging for the implementation of previously issued policy measures, continued research on new destocking and market stabilization policy measures, and the accelerated construction of a new real estate development model.
It seems that the so-called “new model of real estate development” is fundamentally flawed, as the CCP reform meeting might have discussed related topics but offered no new solutions other than continuing destocking. The real estate bubble is bound to burst, and financial stability might be harder to achieve.
On June 11th, People’s Daily published an article titled “Holiday Economy Injects Vitality: 110 Million Domestic Travellers During the 2024 Dragon Boat Festival Holiday,” attempting to sing praises by claiming that “according to the data center of the Ministry of Culture and Tourism, a total of 110 million domestic travellers embarked on domestic travel during the 2024 Dragon Boat Festival holiday,” and that “the total domestic tourist spending amounted to 40.35 billion yuan.”
Using the data mentioned, the average spending per trip calculates to approximately 366.82 yuan/person for 40.35 billion yuan/110 million person-visits. Even without factoring in transportation costs, the actual average travel expenditure per person is quite minimal. Such reports do not truly reflect an optimistic view of the economy but rather hint at its bleak state.
With job scarcity, decreasing incomes, aversion to consumption, and inability to afford housing, the fundamental economic hurdles are avoided intentionally by the CCP reform meeting, operating in the name of “reform and opening up” while strengthening the so-called “Party leadership” and reversing history. Whether the Third Plenum convenes or not, whenever it does, the CCP’s top officials cannot present a substantial governance plan and seem to focus on protecting the Party and their positions, merely indulging in wishful thinking.
*Translated and adapted from the original article written in Chinese.