As the curtain falls on the Third Plenum of the 20th Central Committee of the Chinese Communist Party (CCP), the world is left grappling with a paradox. What was billed as a pivotal moment for China’s economic future has instead produced a vague, rhetoric-laden communiqué that raises more questions than it answers. This critical juncture in China’s economic trajectory demands scrutiny, as the outcomes of the plenum reveal deep-seated issues within the country’s political and economic framework. The 5,000-word communiqué emerging from the plenum touts “comprehensively deepening reforms” and advancing “Chinese-style modernization.” However, a closer examination reveals a troubling lack of substance beneath the grandiose language.
At the heart of this ambiguity lies Xi Jinping’s concept of “Chinese-style modernization.” Despite its prominence in the communiqué, this term remains frustratingly nebulous, lacking any measurable definitions or clear objectives. This vagueness is not merely a semantic issue; it reflects a broader problem in China’s economic policymaking under Xi’s leadership – a tendency to prioritize ideological soundbites over practical solutions.
The plenum’s repeated invocation of “socialist market mechanisms” and “new quality productivity” stands in stark contrast to the realities of China’s economic landscape. The country faces a myriad of challenges, including a property market crisis, high youth unemployment, and declining foreign investment. Yet, the communiqué offers little in the way of concrete measures to address these pressing issues. More troublingly, the document’s emphasis on “party leadership” as the “fundamental guarantee” for promoting modernization signals a continuation of Xi’s trend towards greater state control over the economy. This approach represents a significant departure from the market liberalization that characterized China’s earlier reform era. As one expert points out, “Reform today is not the same as 40 years ago, when focus was market liberalization. ‘Reform’ today focuses on tackling the thorny issues hindering effective governance.” This shift towards increased state intervention is likely to further dampen the entrepreneurial spirit that has been a key driver of China’s economic miracle. Critics argue that Xi’s economic reforms are, in fact, regressive, forcing the private sector to retreat while advancing state interests.
Perhaps most concerning is the communiqué’s emphasis on national security as a foundation for economic development. This conflation of security and economics signals a troubling prioritization of political control over economic dynamism. The stress on modernizing national defense and armed forces as an integral part of “Chinese-style modernization” further underscores this shift. This security-centric approach is likely to have far-reaching implications for China’s economic future. The tightening of controls over foreign capital, as hinted at in the plenum’s outcomes, is poised to deal a significant blow to China’s market economy. At a time when the country desperately needs to attract foreign investment to stimulate growth, such measures seem counterproductive at best and potentially disastrous at worst.
Another point of concern is the plenum’s apparent lack of urgency in addressing China’s economic woes. The leadership’s focus on 2035 as a milestone for evaluating reform outcomes suggests a dangerously long-term perspective that may overlook the immediate challenges facing the Chinese economy. With growth slowing and global economic headwinds intensifying, China can ill afford to take such a leisurely approach to reform. This long-term outlook is particularly worrying given the current state of China’s economy. The divergence between first, second, third, and fourth-tier cities, coupled with vastly different sector performances, paints a picture of an economy in flux, desperately in need of clear and immediate guidance.
The personnel changes announced at the plenum, while garnering significant attention, do little to inspire confidence in China’s governance. The removal of former Foreign Minister Qin Gang and former Defense Minister Li Shangfu from the Central Committee, shrouded in secrecy and speculation, raises questions about the stability and transparency of China’s top leadership. The opacity surrounding these high-level changes is emblematic of a broader issue within the CCP – a lack of transparency that undermines public trust and economic confidence. The fact that Qin Gang’s removal became a hot topic on social media, only for comments to be swiftly concealed, speaks volumes about the regime’s paranoia and its willingness to suppress even the mildest forms of public discourse. Perhaps most telling is the reaction – or lack thereof – to the plenum’s outcomes among the Chinese public. While the communiqué received millions of views on social media, substantive discussion was notably absent. This silence speaks volumes about the climate of political repression in China, where even online comments about high-level party decisions are swiftly suppressed.
This suppression of discourse extends far beyond the digital realm. Reports of increased surveillance and detention of activists and petitioners in the lead-up to the plenum highlight the regime’s paranoia and its willingness to go to extreme lengths to maintain stability. Dissidents and rights activists across the country, from Beijing to Wuhan, reported being placed under house arrest or forcibly taken on “vacations” to prevent any potential disturbances during the meeting. The treatment of petitioners is particularly troubling. These individuals, who seek to bring local grievances to the attention of higher authorities, face surveillance, violent treatment, and possible detention on criminal charges, particularly during major political events. This heavy-handed approach to maintaining stability is likely to further stifle innovation and honest feedback, both crucial elements for effective economic reform.
Despite the communiqué’s lofty rhetoric, it fails to address the structural issues at the heart of China’s economic challenges. The document mentions three key focus areas for reform: real estate, urban-rural integration, and central-local fiscal dynamics. However, it provides no concrete strategies for tackling these complex issues. The real estate sector, long a pillar of China’s economic growth, is in crisis. The urban-rural divide continues to widen, exacerbating inequality and social tensions. Meanwhile, the fiscal relationship between central and local governments remains strained, with local authorities struggling to find sustainable sources of revenue. These challenges are interconnected and require a holistic, market-oriented approach to resolve. However, the plenum’s outcomes suggest that the CCP is more interested in maintaining political control than in implementing the kind of deep, structural reforms needed to address these issues.
As the dust settles on China’s Third Plenum, it’s clear that the country stands at a critical crossroads. The challenges facing the Chinese economy are numerous and complex, requiring bold, market-oriented reforms and a willingness to embrace transparency and open discourse. Instead, the plenum has produced a document long on rhetoric but short on substance, leaving observers skeptical about China’s economic trajectory. The emphasis on party control, national security, and vague concepts of modernization at the expense of genuine market reforms suggests that China may be ill-equipped to navigate the economic headwinds it faces. As the world watches China’s economic evolution, it’s becoming increasingly clear that the country’s leadership is prioritizing political control over economic dynamism.This approach may maintain the party’s grip on power in the short term, but it risks undermining the very foundations of China’s economic success. Without a genuine commitment to market reforms, openness, and the rule of law, China’s dream of continued prosperity and global economic leadership may remain just that – a dream.