China’s Third Plenum: A Chance for Economic Reforms and International Relations?

Commentators in the West have been voicing concerns about the rosy post-Cold War vision, arguing that Moscow and Beijing, along with their aligned states, cannot be expected to become responsible stakeholders within a rules-based international order. In this context, the upcoming Third Plenum of China’s 20th Party Congress has attracted significant attention, with hopes for a possible thaw in relations and a shift in Chinese policy. However, pessimism persists in the West, with doubts lingering about China’s commitment to a shared security framework. Despite this skepticism, China is known for surprising the world, leading to a degree of optimism that the plenum could pave the way for a change in direction.

The speculation surrounding the plenum stems from the fact that it has been moved forward from its usual October or November timeframe, suggesting a potential for sweeping reforms aimed at propelling China’s progress. Third Plenums hold significant importance as they typically set the economic strategy for the next five to ten years, often viewed as the most crucial event within the Central Committee’s five-year cycle. The 1978 Third Plenary Session of the 11th Party Congress, where Deng Xiaoping introduced economic reforms, remains a landmark event, marking the beginning of China’s economic resurgence.

China’s economic challenges, including an aging population, shrinking workforce, high levels of debt, and lingering economic difficulties despite existing measures, have fueled pessimism both within China and abroad. Hopes are high that the plenum will deliver new guidelines, offering reassurance to both the Chinese people and the international community about the health of China’s economy. While the possibility of a shift towards experimentation with new economic ideas remains uncertain, the plenum presents a crucial opportunity for China to demonstrate its commitment to economic stability and growth.

Meanwhile, the West’s skepticism towards China’s intentions is likely to persist, regardless of the outcomes of the plenum. Allegations of “gray zone coercion” tactics, including disinformation campaigns, election interference, military provocations, and threats to Taiwan and countries in the South and East China Seas, are expected to continue. Taiwan will likely remain a focal point for China’s military and propaganda efforts, further raising concerns about China’s actions in the region.

China’s Global Development Initiative (GDI), Global Security Initiative (GSI), and Global Civilization Initiative (GCI) encapsulate many of China’s core beliefs, leaving limited room for adjustments. Mr. Xi’s elevation of national security as a paramount concern has heightened a sense of paranoia about China’s intentions in Asia and beyond. China’s approach is likely to inject instability into an already complex regional and global landscape, posing a particular challenge for India’s policymakers.

India’s relations with China have been under strain for years, particularly since 2020. While the tense situation on the China-India border is a significant factor, it is not the sole contributor to the strained relations. China’s reluctance to compromise on border issues, despite India’s willingness to show flexibility, has led to a hardening of attitudes on both sides.

India’s strategic community is increasingly concerned about the size of Beijing’s growing missile and nuclear inventory, particularly the deployment of dual-capability missiles. China’s advancements in space and electronic warfare, particularly through its Rocket Force, have also heightened anxieties in India. The growing sense of threat has fueled calls for India to prepare for a potential confrontation, raising the question of whether a conflict is inevitable and whether diplomatic efforts can be employed to counter China’s perceived “evil intentions.”

Despite the stark differences in military capabilities, both countries understand the severe consequences of a conflict. This realization provides an opportunity for experimentation, particularly as India is well-positioned to take a proactive role in promoting peace and stability. India’s strong economic performance, focused leadership, and global network of allies make it well-suited to initiate a major peace-building initiative.

Throughout history, India has played a significant role in mitigating tensions with China, including notable diplomatic initiatives like the Sumdorong Chu and Wangdung incidents. Rajiv Gandhi’s landmark visit to China in 1988 and his discussions with Deng Xiaoping led to a period of relative peace for both countries and the world.

The current situation, while tense, is arguably less strained than during previous periods. While peace is not guaranteed, India’s leverage in its relationship with China is stronger than ever. Mr. Xi’s recent invocation of the Five Principles of Peaceful Co-existence (Panchsheel) could provide a valuable opportunity for India to embark on a grand new initiative aimed at strengthening relations and fostering regional peace. Whether India chooses to seize this opportunity remains to be seen, but success would be highly beneficial for both countries, Asia, and the world.

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