Top Chinese officials are expected to convene in Beijing on Monday for the third plenum, a significant gathering where they will deliberate on the economic policy changes necessary to revitalize the country’s sluggish economic growth. The meeting takes place at a critical juncture when the world’s second-largest economy faces multiple headwinds, including a real-estate debt crisis, weakening consumption, and an ageing population.
According to AFP, Chinese President Xi Jinping will preside over the meeting. The Communist Party’s plenum meetings hold substantial significance due to their secretive nature and five-year frequency. However, in recent months, Beijing has provided scant hints about the agenda items. While disclosing information about the meeting, Chinese state media announced in June that the delayed four-day gathering would “primarily examine issues related to further comprehensively deepening reform and advancing Chinese modernization.” Earlier this year, Xi himself declared that the party is planning “major” reforms to rejuvenate the economy. Meanwhile, experts harbor hopes that these pledges will translate into much-needed support for the economy. “The upcoming plenum can’t come soon enough,” Sarah Tan and Harry Murphy Cruise wrote for Moody’s Analytics last week.
While the analysts believe that Beijing should take decisive action to reform the property sector, they note that the leaders would “probably not” enact sweeping reforms. China also needs to prioritize loosening its strict controls on internal migration and should strive to create more high-skilled jobs for graduates. Both Tan and Cruise anticipate the Chinese administration to opt for “a modest policy tweak that expands hi-tech manufacturing and a sprinkling of supports to housing.” The Communist Party’s official newspaper, The People’s Daily, reinforced these assertions by the experts. Last week, it cautioned that “reform is not about changing direction and transformation is not about changing colour.”
Historically, the third plenum meetings have provided the Chinese Communist Party with a platform to introduce significant policy shifts. In 1979, then-leader Deng Xiaoping convened a meeting to announce market reforms that ultimately propelled China onto a trajectory of rapid economic growth. The 1979 meeting laid the foundation for the Chinese economy, upon which the country thrived. In the closed-door meeting held in 2013, the Chinese leadership pledged to grant the free market a “decisive” role in resource allocation, alongside other sweeping changes to the country’s social policy, as reported by AFP.
This year’s conclave is scheduled to coincide with the release of economic performance figures for the second quarter. However, in the recent past, China has been known to delay the publication of GDP results if they coincide with major events. Earlier this year, the Xi Jinping administration announced its goal of achieving a 5 percent GDP growth this year. Therefore, it will be intriguing to observe how the Chinese economy fared this year and what policy changes the Xi Jinping administration intends to implement to enhance economic growth.
