CPC Plenary Session Ends Without Clear Economic Solutions, Sparking Disappointment

CPC Central Committee's Third Plenary Session Ends Without Concrete Solutions for Economic Woes**

The Third Plenary Session of the 20th Central Committee of the Communist Party of China (CPC) concluded on July 18, 2024, in Beijing. The session, which lasted four days, was anticipated to address China's pressing economic and social issues. Instead, the official communiqué emphasized "comprehensive deepening of reforms" and the promotion of "Chinese-style modernization." However, analysts were largely disappointed by the lack of concrete economic solutions presented in the document, fearing it signals the end of an era of economic reform in China.

Key Takeaways:**

1. Communiqué Highlights: The over 5,000-word communiqué lauded past achievements and set a broad agenda for future reforms, but lacked specific measures to tackle current economic challenges.
2. Leadership Presence: President Xi Jinping made a public appearance, dispelling rumors about his health.
3. Economic Disappointment: Analysts and economists expressed frustration over the lack of new economic strategies, particularly in areas like consumer confidence and foreign investment.
4. High-Level Personnel Changes: The communiqué also addressed significant personnel changes within the party, including the dismissal of former Foreign Minister Qin Gang from the Central Committee.

Analysis:

The Third Plenary Session traditionally focuses on economic policies and reforms. However, this year's session fell short of expectations. The communiqué reiterated familiar concepts like "socialist market economy" and "high-quality development," but failed to offer new initiatives or detailed plans to address pressing economic issues such as the real estate crisis, youth unemployment, and fiscal reforms.

Professor He-Ling Shi from Monash University described the communiqué as "disappointing," noting its lack of innovative ideas or substantial policies to boost consumer confidence or counteract the exodus of foreign investment. The document, he argued, could have been written five years ago, showing no adaptation to China's current economic situation. Xi Jinping's vision of "Chinese-style modernization" remained vague, with no clear definitions or actionable steps.

Investment professionals within China also voiced their dissatisfaction. In a group chat reviewed by Voice of America, one investor remarked that after reading the communiqué, they were still unclear on what actions to take. Another cynically noted that all they could do was applaud.

Economist David Li, a former advisor to the People's Bank of China, had previously suggested issuing 1 trillion yuan in consumer vouchers to stimulate spending, a measure not reflected in the communiqué. Similarly, consulting firm Trivium China had outlined seven expectations for the session, including boosting economic confidence and addressing population crises, but these were not met with specific solutions.

Did You Know?

1. Historical Context: The Third Plenary Sessions have historically been pivotal in setting China's economic policies. For instance, the Third Plenary Session in 1978 marked the beginning of China's era of economic reforms under Deng Xiaoping.
2. Personnel Changes: The session's communiqué confirmed the dismissal of former Defense Minister Li Shangfu and former Rocket Force Commander Li Yuchao, marking significant shifts in China's military leadership.
3. Public Reaction: Despite the lack of economic solutions, state media highlighted Xi Jinping's appearance and leadership, aiming to bolster confidence in his administration amidst the economic uncertainty.

The Third Plenary Session's outcomes suggest a continuation of broad, ideologically-driven goals without the detailed, actionable plans needed to address China's immediate economic challenges. This has left many observers questioning the future trajectory of China's economic policies and reforms.