The Third Plenum, a major Party conference on China’s economy held roughly once every five years, came to a close this past Wednesday. The closed-door meeting of Central Committee members reaffirmed the Party’s commitment to reform and opening, a central Party plank since the 1978 Third Plenum spearheaded by Deng Xiaoping, but offered little in the way of detail. At The New York Times, Keith Bradsher and Chris Buckley wrote about the key takeaways from the meeting in Beijing:
[Xi Jinping’s] message to the 363 other officials who gathered in Beijing seemed to be: stick with his state-led, tech-focused strategy, only do it better. That is, make it cleaner, more fair and keep a careful eye on national security.
[…] Investors in China, dispirited by the country’s economic troubles, have been waiting for promising signals, but the post-meeting statement gave only a broad description of any plans, clad in Communist Party slogans.
[…] Elsewhere, the document indicated that the party’s controls on public opinion will remain tight. A few words also hinted that Mr. Xi’s ambitions for a bigger international voice were undimmed.
China must, the statement said, “guide global governance, and actively shape a benign external environment.” [Source]
China’s economy is in trouble—marked by slowing, unbalanced growth, a depressed housing market, an aging labor force, and ballooning local government debt. On top of those structural issues, economic scandals have fueled public anger. Over the past few months, viral outrage has been directed at the widespread misuse of school meal subsidies to repay local government debt; over public utilities overcharging for residential natural gas use; and against reclassifying workers between the ages of 60-70 as “youthful elderly.” The Party leadership seems to be aware of these issues. In May, Xi Jinping expressed concern about a slow-down in Chinese entrepreneurship, asking: “What is the main factor behind the drop in Chinese unicorns?” The communique published after the Plenum revealed that the Party plans to strengthen its control over society amidst economic pressure. From Joe Leahy at The Financial Times:
[The Party’s Central Committee] added that China must “weave a dense social security risk prevention and control network, and effectively maintain social stability” and step up state propaganda. “It is necessary to strengthen public opinion guidance and effectively prevent and resolve ideological risks,” they wrote.
[…] “The plenum has re-articulated the government’s economic objectives and acknowledged some key risks but inspires little confidence that the government has a strategy for effectively managing the economy’s cyclical and structural problems,” said Eswar Prasad, a professor at Cornell University and senior fellow at Brookings. [Source]
Those hoping for sweeping reforms out of the Third Plenum may be disappointed, but the picture of what exactly happened in Beijing this past week will become clearer in the coming months. The Economist’s coverage of the Third Plenum emphasized that the initial statements about the Plenum are story-telling devices, not necessarily accurate reflections of the actual policy that will originate from it:
Optimists might also take comfort from things the communiqué did not say. The equivalent document after the third plenum in 2013 endorsed the “leading role of the state-owned sector” and “public ownership playing a dominant role”. No equivalent statements appeared this time. Instead there was a promise to “purposefully give more prominence to reform” and to “better leverage the role of the market”. Those sentiments are laudable. The problem is that China’s rulers have often mouthed similar economic pieties in the past, then cracked down clumsily on any industry that falls out of their favour. The party’s ambivalence was reflected in the communiqué’s call for “letting go” to invigorate market forces while “managing well” to keep market order.
Precisely because it is a story-telling device, the communiqué is not always the best guide to the policy deliberations it reflects. After the third plenum in 2013, a similarly broad-brush communiqué was followed a few days later by a more substantive “decision” document, which spanned 60 sections and over 300 reform proposals. If a similar document appears this year, it may cast this year’s plenum in a different light. [Source]
Nonetheless, Party-controlled media naturally hailed the Plenum as a landmark moment in “China’s economic miracle.” In the run-up to the Plenum, Party- and state-media published odes to Xi meant to burnish his image as a reformer. Surprisingly, a 10,000 word commentary titled “Xi the Reformer,” originally posted sometime around this March’s Two Sessions, was deleted from Xinhua’s website and search-blocked on Baidu—seemingly due to public backlash over its overblown claims. That deletion proved the exception. After the Congress, Party mouthpiece People’s Daily ran an opinion piece claiming: “At every pivotal point in history, the Party has been able to set the correct political strategy, guiding us to victory through innumerable precarious challenges, endlessly striding from victory to victory.” The piece finished by asserting that “even tighter” adherence to Xi Jinping as “the Core” of the Party was key to continuing victories. Xinhua, the leading state-media outlet, published a similar op-ed that repeated, verbatim, the call to cluster “even tighter” around Xi. Top Party tabloid Global Times quoted a Moscow-based academic hailing the Party’s leadership of the plenum: “The top-level design in economic policy, which only the CPC leadership can provide, is very important.”
The Third Plenum also shed partial light on the strange case of Qin Gang. Qin, the former Foreign Minister, disappeared from the public eye last year and was subsequently relieved of his duties amid torrid rumors of an extra-marital affair (and wild speculation about espionage). A communique released by Xinhua after the Plenum stated that the Central Committee had accepted Qin Gang’s resignation. The statement included the honorific “comrade,” indicating Qin may remain in relatively good standing within the Party. The statement did not elaborate on why Qin had “resigned.” Three top People’s Liberation Army officials were also formally expelled from the Central Committee amidst allegations of corruption. At The Strategist, a publication of the Australian Strategic Policy Institute, Daria Impiombato and Nathan Attrill argued that the demotions of high-ranking officials show that Xi still has issues trusting his hand-picked officials:
Xi’s loss of trust in these senior officials, and allegations of corruption that underlie some of them, sit uncomfortably close to the [center] of power in China. It is a situation that likely makes him doubt information and advice he receives on the issues he cares about most. Some, such as military preparedness, leave little room for miscalculation.
[…] But Qin is only one of a growing list of senior officials removed from office in the past year, some explicitly for corruption, others without public explanation. There was speculation that the third plenum had been delayed due to the corruption investigations of Central Committee members. The most prominent of those being investigated include defence minister Li Shangfu, whose expulsion from the party and its Central Committee was announced in June (and confirmed by the plenum this week). Others are former science and technology minister Wang Zhigang and former finance minister Liu Kun, whose removal from his ministerial position was announced at the same time as Qin’s dismissal as a state councillor.
[…] Xi began his third term as leader at the 20th party congress in October 2022 by filling the upper echelon of the party with personal allies and loyalists, some of whom had been with him for decades. These were all men (there were no women) whom he thought he could trust to do as he said and even tell him what he needed to hear. Within less than a year, he was having to cut some of his own proteges loose. [Source]
