China’s Politburo warns of economic risks as Communist Party readies for third plenum
- The Central Committee will gather for third plenary session in July
- Announcing the conclave, Politburo highlights the ferocity of international competition and risks ‘lurking in key areas’ of the economy
The decision was made at a meeting of the Politburo, the party’s 24-man decision-making body, on Tuesday, with members highlighting the ferocity of international competition and risks “lurking in key areas” of the economy.
The Politburo said the country needed to advance reforms and gain a strategic advantage against those overseas competitors.
“The complexity, severity and uncertainty of the external environment have spiked,” it said, according to a statement released by state news agency Xinhua.
The meeting, which will span up to five days, will be attended by the 376 full and alternate members of the new Central Committee.
It is expected to be one of the defining moments for President Xi Jinping’s third five-year term as the party’s leader, and cover a wide range of goals, from the economy to social development and state-building.
It is also expected to endorse a wide-ranging communique that will be dissected by officials at all levels as they try to come up with ways to reach the goals set out in the document.
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The announcement that the plenum will be held comes after a much-discussed and unexplained delay.
Over the past four decades, third plenums have typically been held in October or November, and it is the first time since 1984 that the party has not convened one in the year following the twice-a-decade party congress. The last congress was held in the autumn of 2022, the year Xi began his third term as party general secretary.
In past decades, third plenums were timed to send early policy signals to the party and the public of what the next five-year term would look like.
Beijing offered no explanation for the delay in the statement on Tuesday but China has been grappling with a series of formidable challenges, including a sluggish economic recovery, intense geopolitical headwinds and an ongoing purge in the leadership.
It also did not spell out the agenda for the July plenum, saying only that the Central Committee would discuss “further comprehensive reforms” and pushing forward “Chinese modernisation”.
The gathering in July will be held just three months before China will celebrate the 75th anniversary of the founding of the People’s Republic.
It will also be before the end of the year and therefore meet the stipulation in the party’s constitution that it hold at least one plenum each year.
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Deng Yuwen, former deputy editor of the Study Times, the official newspaper of the Central Party School where senior cadres are trained, said Xi probably did not convene the plenum last year because he had a “very packed” fourth quarter and there was “no urgent need” for endorsement of his political agenda.
“In October, he hosted the third Belt and Road Forum for International Cooperation summit; in November, he attended the Apec summit in the United States and met US President Joe Biden.
“The former was the most important diplomatic event in China last year while the latter was the most important bilateral meeting. Both required his full attention,” Deng said.
Xie Maosong, a senior researcher at the National Institute of Strategic Studies at Tsinghua University, said the delay indicated the leadership took the next round of reform “very seriously and they did not want to rush major decisions”.
Last year was the 45th anniversary of Deng Xiaoping’s reform and opening up and the 10th anniversary of Xi’s own series of reforms, milestones that came and went without the plenum.
“Instead, [the leadership] chose to spend more time listening to the diverse views within the party, and building internal consensus, knowing that the new reforms brought to the third plenum would have a major impact on China’s economic development for the next five to 10 years,” Xie said.
Xie said the announcement of the third plenum also projected the leadership’s confidence ahead of November’s US presidential election.
“Beijing has no illusions about Sino-US relations – the US’ Democratic and Republican parties have a consensus about containing China. So no matter who wins the election in the US, China shall remain focused on its own development and cope with its challenges,” he added.
But Brian Wong, assistant professor in philosophy at Hong Kong University, said he did not see any particular correlation between the timing of the plenum and the US election.
“The key priority of the [third plenum] has always been on the domestic economy and balancing or addressing stakeholders’ interests within the country,” Wong said.
“If anything, that the plenary will be convened this summer is indicative that the incumbent leadership is confident of having successfully dealt with all potential misalignment or challenges to internal unity.”
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In addition to signalling economic policy, the third plenum is also an usual venue to show party solidarity and offer updates on investigations of sacked high-level officials.
Qin, China’s shortest-serving foreign minster, disappeared last June before being stripped of his remaining titles in the government. Li, China’s shortest-serving defence minister, has not been seen since August and has also lost all of his titles.
The formal expulsion of the pair from the elite body requires a formal resolution during the plenum.
The plenum may also shed light on the leadership’s decision on the Central Committee membership of Li Yuchao, the former commander of the People’s Liberation Army’s Rocket Force who is being investigated for corruption but remains on the committee.
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In addition to the announcement of the July meeting, the Politburo issued a number of warnings about the economy, saying that domestic social and economic policy must be coordinated, with the focus on tangible results.
“Many businesses are under greater operating pressure … We will support private enterprises to tap into overseas markets while dialling up efforts to attract and leverage foreign investment,” it said in the Xinhua statement.
The government should expedite the issuance of ultra-long-term special bonds while also ensuring that provinces, cities and counties facing high debt risks unwind their debt burden, it said.
Additional reporting by Sylvie Zhuang
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