The country’s leadership convenes amid economic decline to enhance competitiveness and revitalize growth in the face of international trade tensions.

By Probe International

July 15: After months of unexplained delay, the third plenary session of the 20th Communist Party of China (CPC) Central Committee got underway today to chart the course for the country’s long-term economic development and the advancement of Chinese modernization in a challenging geopolitical environment.

The four-day third plenum of China’s ruling Communist Party is a critical, closed door meeting that takes place every five years, typically serving as a platform for the party’s leadership to announce key economic reforms and policy directives. This meeting is particularly important as it comes at a time when China is facing major economic challenges and territorial escalations. These include a property sector crisis, high local government debt, weak consumer demand, and flagging investor confidence, as well as intensifying trade and technology tensions with the West, particularly the United States and Europe. All this in addition to the PRC’s strained regional relationships amid expansionist ambitions in the South China Sea and a relentless bid to claim Taiwan as the country’s 23rd province.

Historically, third plenums have been significant for launching landmark reform agendas. The 1978 plenum initiated the reform and opening-up policy, while the 2013 plenum marked a new era of reform under Xi Jinping’s leadership.

A key anticipated area of focus for this plenum is technological self-reliance and innovation, and the creation of “new quality productive forces”. Under Xi Jinping, “new quality productive forces” represents a shift towards a more ideologically charged and ambitious approach to industrial development. A departure from the market-oriented consensus of the Reform and Opening period, this approach goes beyond the traditional factors of labor and capital to leverage technology as a disruptive force for economic growth.

China’s property market, a major driver of economic activity and household wealth, is another key concern.

The CCP has attempted to restructure the economy away from real estate by clamping down on developers’ access to credit and diverting resources to sectors aligned with its technology-led development strategy. However, weakness in the property sector has led to negative effects on private investment, local government finances, consumer sentiment, and savings rates.

The third plenum is expected to address these issues, with the hope that Beijing will continue to avoid a “bazooka-style stimulus” while providing further reassurances to the market. The leadership’s acknowledgment of the importance of an open international business environment, investor confidence, and a healthy private sector is seen as integral to China’s long-term development goals.