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After months of unexplained delays, Chinese China’s top Communist Party leaders are meeting in Beijing this week to chart a course for the world’s second-largest economy as it faces major economic challenges and friction with the West.
The significance of the conference, known as China’s Third Plenary Session, is huge as it is held every five years and has historically been the forum for party leaders to announce major economic reforms and policy guidance.
China: Real estate sector crisis, Local government debt and Weak consumer demand Investor confidence is also declining, and trade and technology tensions with the United States and Europe are rising.
These challenges are underscored by the latest economic growth data, Announced on MondayChina’s gross domestic product grew 4.7% year-on-year in the April-June period.
this is, 5.3% growth The economy grew 5.1 percent in the first quarter, below the 5.1 percent growth expected in the second quarter by economists surveyed by Reuters.
Economic problems following years of strict pandemic countermeasures have sparked growing social discontent and questions about the direction of the country under President Xi Jinping, China’s most powerful leader in decades.
These questions have been underscored by recent personnel changes in the upper echelons of Xi’s administration, which have seen the appointment of three ministers and a handful of senior officials. top military officer Some have been removed from their posts or under investigation, a situation that some observers of China’s opaque political system believe has led to the postponement of the General Assembly.
Xi Jinping and his top officials National economic challenges This will have a major impact on whether China can continue to improve its quality of life and public trust.
It could also have wider implications for the country’s role in the global economy and the willingness of foreign investors to do business there, given looming uncertainties, including the outcome of the next U.S. presidential election.
Here’s what to expect during the four-day gathering, which begins Monday.
According to state media, around 200 members of the Party’s Central Committee leadership and 170 deputies met in Beijing to approve the document setting out plans for “deepening reform” and promoting “Chinese modernization”.
So far, radical reforms have been implemented at the third plenary session.
The 1978 conference was linked to a landmark shift towards “reform and opening up” of the Chinese economy, while the Third Plenum in 2013, the first convened by President Xi as leader, began moves to end the decades-old one-child policy.
But observers of China’s opaque political machine believe there will be no fundamental economic reforms this time.
Instead, China will likely look to more targeted efforts to address structural economic and social issues and increase China’s technological independence in the face of growing restrictions on access to U.S.-led technologies.
It will be the third conference he has overseen since President Xi Jinping last year broke the norms by extending his rule into a 20th year. 2022 Party Congress.
Speculation has been rife as to why the meeting, which was widely expected to take place last fall, is being held now.
Some observers said the drop could be due to internal disagreements over the economic downturn and how to respond, as well as a shakeup of senior government personnel that has cast a shadow over Xi’s third term.
Andrea Verdelli/Bloomberg/Getty Images
An unfinished residential building at a real estate project on the outskirts of Shenyang, Liaoning province, China, earlier this year.
High local government debt and declining revenues linked to the ongoing crisis in the real estate sector are at the root of China’s current economic woes.
They will also be looking for signs of a new direction for property development and real estate sector policy following an industry crisis that has seen dozens of Chinese property developers default on loans, hitting investors, home buyers and construction workers.
Observers will be focusing on fiscal reforms, particularly with regard to taxation and government spending, that could ease pressure on local governments and raise revenues.
Many also say the government should take steps to stimulate consumer spending and boost household incomes, such as reforms to change rural land ownership and China’s rigid household registration system, and expanding the social security net in a country struggling with soaring health care costs and a rapidly aging population.
Xi acknowledged China’s economic difficulties, saying in his New Year’s address that “some people” are “struggling to find work and meet their basic needs”. He also stressed in a May speech that the party should “do more practical things to help people’s lives”, adding that reforms should give people a sense of “benefit”.
Pursuing rapid economic growth “is no longer Beijing’s only priority,” say Neil Thomas and Jing Qiang, experts at the Asia Society’s Center for China Analysis. I have written Last week, President Xi Jinping appeared to acknowledge that his priorities of national security and technological independence “must coexist with a baseline level of growth that supports consumption, investment, social stability, and our own political security.”
STR/AFP/Getty Images
Electric vehicles for export wait to be loaded onto a ship at the port of Yantai in eastern China’s Shandong Province earlier this year.
Technological independence has become a key focus for Beijing as the United States and its allies move towards technological independence. Restricting Chinese access They are hesitant to enter high-end technology due to security concerns.
The plenary session is expected to approve further inter-government coordination on President Xi’s plan to develop China into a “science and technology powerhouse” in terms of both innovation and industry.
However, such a focus could increase friction with Western countries.
The EU and the US Recently, they imposed heavy tariffs. China has harshly criticized electric vehicles, claiming they are unfairly subsidized by the government and flooding the global market, and a move this week to ramp up production of such high-end green technology, which also includes products such as solar panels and batteries, could exacerbate the problem.
Meanwhile, global investors are hoping the Chinese government will make good on promises to further open up the market, even as many companies are wary of doing business in China as President Xi prioritizes strengthening state control and security.
The plenum could also include the formal dismissal of senior Communist party officials who have been caught up in opaque disciplinary investigations or removed from their jobs without explanation, some of whom were apparently linked to the military purges.
He was fired in October Expelled from the Communist Party He is likely to be formally removed from the Central Committee as a result of the corruption investigation.
Observers are watching to see whether similar developments emerge around other ousted government and military officials, including former foreign minister Qin Gang, People’s Liberation Army Rocket Force commander Li Yuchao and political commissar Xu Zhongbo.
