WASHINGTON — The Third Plenary Session of the 20th Central Committee of the Communist Party of China (the Third Plenary Session) ended on July 18 and adopted the “Decision of the CPC Central Committee on Further Comprehensively Deepening Reforms and Promoting Chinese-style Modernization” (hereinafter referred to as the “Decision”). Western analysts pointed out that the communiqué of this meeting was “bland” and “nothing new.” Although the CPC mentioned reform many times in the communiqué, the direction of China’s reform has changed.
The “Decision” mentions “reform” 53 times, “Xi Jinping” 7 times, and mentions two important time nodes: “By 2035, a high-level socialist market economic system will be fully established… laying a solid foundation for building a socialist modern power in an all-round way by the middle of the century”, and “By 2029, the 80th anniversary of the founding of the People’s Republic of China, the reform tasks proposed in this decision will be completed.”
The “unremarkable” Third Plenary Session Communiqué
As a platform for the Communist Party of China to review and approve major policies and economic reforms, the Third Plenary Session has always attracted much attention. Compared with previous sessions, this session was delayed by nine months, and this session is particularly noteworthy because China is facing economic problems such as the real estate crisis, high youth unemployment, declining business and consumer confidence, and surging local government debt. However, analysts believe that this meeting and its communiqué were “unremarkable.”
“The document is very long, but there doesn’t seem to be much accurate information. I don’t see much except the call for modernization in all aspects of society and economy as in the past,” Eric Harwit, a professor at the Center for Chinese Studies at the University of Hawaii, told VOA.
Derek Scissors, a resident scholar at the American Enterprise Institute who has long studied Asian economic issues, responded directly to VOA’s request for comment, saying, “I have no interest in the Third Plenary Session of the 18th CPC Central Committee.” “We all know what Xi Jinping wants a long time ago,” he said.
Professor Kerry Brown, director of the China Institute at King’s College London, told VOA that the plenary session seemed “nothing special.” “Only the last statement about ‘Comrade Qin Gang’ indicates that he is still a party member? That sounds very strange,” he said.
The communiqué included a decision on Qin Gang, the former Chinese foreign minister who had disappeared for more than a year. The report said: “The plenary session decided to accept the resignation application of Comrade Qin Gang and remove Comrade Qin Gang from his position as a member of the Central Committee.”
Brown said: “For the rest of the communique, apart from a slight emphasis on technology and the need to make China a technological power, what impressed me was how ‘regular’ and ‘normal’ the wording of the whole article was, especially in the current complex geopolitical and domestic situation. If this communique was issued five years ago, I wonder if people would see any big difference!”
“The Third Plenary Session’s communique looks like it was written by a robot, which makes people feel uncomfortable,” Zhuang Xiaowei, a China-based scholar who has long studied macroeconomic policies (his real name will not be used in this interview at his request), told VOA. He said: “At first glance, this communique looks like all the information has been carefully removed, leaving a super boring article. This also means that the government does not intend to make any changes and will continue with the original policy. The only bright spot is the 2029 time point, which was not mentioned much before.”
Wesley Alexander Hill, director of the International Project Department of the Washington-based International Tax and Investment Center, also said in an interview with VOA that “ordinariness” was the biggest feature of the Third Plenary Session of the 18th CPC Central Committee. He said: “The ordinariness also explains some problems. There are no major policy innovations this time, and the old routine is still being continued. I think this shows that Xi Jinping is quite satisfied with his position, and there is no faction in the party that opposes him.”
However, Einar Tangen, a current affairs commentator based in Beijing, believes that maintaining the status quo is not easy. He told : “The international media thinks that there is nothing new in the plenary session. But what they don’t see is that in an environment full of political and economic uncertainties, it actually takes a lot of strength to maintain what you think is the right path.”
The direction of reform has changed
This communiqué mentioned “reform” about 53 times. In comparison, the communiqué of the Third Plenary Session of the 18th CPC Central Committee in 2013 mentioned “reform” 61 times, and the communiqué of the Third Plenary Session of the 19th CPC Central Committee in 2018 mentioned “reform” 36 times.
Bert Hofman, adjunct professor at the East Asian Institute of the National University of Singapore, told VOA in an email interview, “The number of times this decisive document mentions reform is about the same as the Third Plenary Session of the 18th Central Committee in 2013, but the direction of reform has changed.”
“The communiqué mentions many familiar terms, including high-quality development, new development concepts and high-quality productivity,” Hofman explained. “This document has a new interpretation of ‘market’: China is now to become a ‘high-level socialist market economy.’ Gone is the key point of the Third Plenary Session of the 2013 Central Committee, that ‘the market plays a decisive role.’ Instead, it is now just about ‘giving better play to the role of the market.’”
In the communique of the Third Plenary Session of the 18th CPC Central Committee in November 2013, the word “market” was mentioned 22 times, and it was repeatedly emphasized that “the market plays a decisive role in resource allocation.” In contrast, the communique of the 20th CPC Central Committee mentioned the word “market” 13 times, but all with an adjective, “a high-level socialist market economic system.”
Hao Zhongming of the University of Hawaii said that the point that impressed him most in the communiqué was that “the emphasis on the role of the market has been weakened.” “With the idea of both removing restrictions and regulating the market environment, the state’s control has been strengthened. It is also necessary to ‘better maintain market order.'”
The World Trade Organization held its ninth review of China’s trade policies and practices on July 17 and 19 and published a report. The report said: “China remains an important driver of global economic growth, but the structural reforms it had initiated, namely the shift from industry to services, are now stagnating.”
He Weilong of the Washington-based International Tax and Investment Center told VOA that one interesting thing he observed was that the plenary session announced the need to “guide” the development of the non-public economy and “actively develop domestic demand.” He said: “This shows that ‘reform’ is not always ‘reform’ in the traditional Western sense. China is shifting from the market to national planning to stimulate domestic aggregate demand.”
In addition, China’s official Xinhua News Agency published a 10,000-word article titled “Reformer Xi Jinping” in a special feature on the first day of the Third Plenary Session of the 18th CPC Central Committee. It was the first time that Xi Jinping, General Secretary of the Communist Party of China, was described as a “reformer,” praising his reform sentiments and achievements, comparing him to Deng Xiaoping, known as the “chief architect of reform and opening up,” and saying that Xi would “lead the entire party and the country on a new journey of further deepening reform in an all-round way.” However, this 10,000-word article, published on July 15, has been deleted from Xinhuanet.
Party building is the most important
On the second day after the Third Plenary Session of the 18th CPC Central Committee, the CPC Central Committee held a press conference to introduce and interpret the spirit of the plenary session. At the press conference, Tang Fangyu, deputy director of the Central Policy Research Office, said that the “Decision of the CPC Central Committee on Further Comprehensively Deepening Reforms and Promoting Chinese-style Modernization” reviewed and approved by the plenary session proposed more than 300 important reform measures, all of which involved the system, mechanism, and institutional levels.
Scholar Zhuang Xiaowei told VOA his impressions: “If you listen carefully to what he said, you will find that he was more cautious and restrained than the previous large-scale conferences. In the entire explanation, words like ‘improve,’ ‘strengthen,’ and ‘unwavering’ are all meaningless empty words. After removing these words, there is nothing left. This interpretation is very forced, because the purpose of the Third Plenary Session itself is not to carry out reforms, but to strengthen party building.”
He added: “If we look back at the past Third Plenary Sessions, they were all about rural reform, urban reform, and social reform. The Third Plenary Session of the 18th Central Committee in 2013 was about market-oriented reform, but the 19th Plenary Session was about party building, with the focus on strengthening party rule. This Third Plenary Session will follow the previous one and continue to focus on party building.”
The communique of the Third Plenary Session of the 20th CPC Central Committee mentioned that “the reform tasks proposed in this decision will be completed by the 80th anniversary of the founding of the People’s Republic of China in 2029”, which also triggered speculation among observers about Xi Jinping’s term of office. Xi’s third term should end in 2027, and the statement about completing the goal in 2029 made some people believe that this is a sign that Xi wants to hold on to power for at least a fourth term.
Hofman said the communique set a deadline of 2029, the 80th anniversary of the founding of the People’s Republic of China, for achieving the announced reform goals, which is a major difference from previous communiques: “Since these reforms are still quite vague, it will not be difficult to declare success by then.”
He Weilong doesn’t think there’s a need to read too much into Xi Jinping’s political tenure. He told VOA: “China has made many long-term promises: ‘China 2025’, ‘China 2049’ and so on… 2029 is far enough away that even if reforms fail, it won’t be embarrassingly mentioned; but 2029 is close enough that action can be taken at any speed that is politically convenient.”
Ordinary people and investors have no confidence in the Third Plenum
Han Wenxiu, deputy director of the Central Financial and Economic Affairs Commission, said at a press conference on Friday that China is a “big economy” with great potential for domestic demand and internal circulation. As long as we do our own things well, we can ensure the smooth circulation of the national economy. He said that China is still a fertile ground for investment from all countries, and the withdrawal of foreign capital from China is only a “temporary phenomenon”. China will further relax market access and effectively protect the legitimate rights and interests of foreign companies.
But an American academic who wished to remain anonymous told VOA: “When I chatted with my friends in China, I felt that they didn’t care about the Third Plenary Session of the 18th CPC Central Committee at all. But overall, everyone seemed pessimistic and had no good outlook on the economic outlook. They were afraid to consume. Some young friends did not want to find a job after graduating from college and were busy preparing for postgraduate entrance exams so that they could delay their job search or take the civil service exam in the future.” She had just returned from a business trip to China.
The American scholar said that she felt that compared with a few years ago, restaurants seemed to have regained their vitality, but according to her observation, there were significantly fewer foreigners in Beijing. She said: “I used to go to a medium-sized supermarket near the East Third Ring Road in Beijing that served foreigners and sold imported goods. Now this supermarket has closed because there are too few foreigners and the business is too bad.”
The Third Plenary Session of the 18th CPC Central Committee mentioned the “new quality productivity” mentioned many times by General Secretary Xi Jinping, that is, to focus on the development of quantum computing, nanotechnology and new materials. However, the American scholar believes that focusing only on the development of these industries will firstly lead to the Great Leap Forward-style inefficiency, and secondly, it will not help solve the current high unemployment rate problem.
According to the South China Morning Post on July 16, a group of senior executives from major American companies including Goldman Sachs, Starbucks, Honeywell, Nike, and Qualcomm will travel to Beijing next week to meet with senior Chinese officials to obtain first-hand information after the closing of the Third Plenary Session of the 18th CPC Central Committee.
Data from China’s Ministry of Commerce showed that the actual amount of foreign capital used from January to May 2024 was 412.51 billion yuan, a year-on-year decrease of 28.2%. In this regard, the Ministry of Commerce stated that “the decrease in the amount was mainly affected by the high base last year” and that “China established 21,764 new foreign-invested enterprises during this period, a year-on-year increase of 17.4%.”
He Weilong believes that at present, both China and the United States seem reluctant to make major moves, and this situation is unlikely to boost overall investor confidence. He said: “The final goal of such meetings is often to resolve more specific differences, such as tariffs, policies and regulations targeting specific companies and economic sectors.”