China’s ruling Communist Party concluded a highly anticipated party conclave Thursday, promising to boost economic growth through comprehensive reform while reiterating the importance of maintaining national security.
The Central Committee, in a communique at the end of the four-day, closed-door Third Plenum, laid out reform objectives to be completed by 2029, the 80th anniversary of the People’s Republic of China.
The party’s top decision-making body also vowed to finish “building a high-standard socialist market economy in all respects” by 2035.
“All of this will lay a solid foundation for building China into a great modern socialist country in all respects by the middle of this century,” the communique said.
To achieve these goals, the communique said China must better utilize market mechanisms and double down on efforts to promote “high-quality development,” which includes prioritizing investment in advanced technologies and facilitating growth through technological and scientific innovation.
“We must deepen supply-side structural reform, improve incentive and constraint mechanisms for promoting high-quality development, and strive to create new growth drivers and strengths,” the communique said.
The key political meeting comes as China’s economic growth slowed to 4.7% in this year’s second quarter, prompting banks such as Goldman Sachs to lower their 2024 gross domestic product growth forecast for China from 5.0% to 4.9%.
Meanwhile, China’s property crisis continues as investment in the sector dropped 10.1% in the first six months of this year compared to a year earlier, and consumer confidence remains weak.
To address these challenges, Beijing promised to implement measures to defuse risks in the property sector while improving income distribution, the job market, social security, and the health care system.
“Ensuring and enhancing the people's well-being in the course of development is one of the major tasks of Chinese modernization,” the communique said.
As local governments across China face mounting debt resulting from the real estate crisis, the communique stressed the need to roll out fiscal and tax reforms and facilitate better integration between cities and the countryside.
“The Party must promote equal exchanges and two-way flows of production factors between the cities and the countryside, so as to narrow the disparities between the two and promote their common prosperity and development,” the statement said.
As foreign investors closely monitor signals coming out of the plenum, the party said it would remain committed to the state policy of “opening to the outside world” and promised to “expand cooperation with other countries.”
“We still steadily expand institutional opening up, deepen the foreign trade structural reform, further reform the management systems for inward and outward investment,” the communique said.
Some analysts say the communique shows that Beijing is focusing on areas critical to China’s national strength, including technology and advanced manufacturing.
“This isn’t Western-style market liberalization; it’s about reinforcing China's existing strategy,” Lizzi Lee, a fellow on the Chinese economy at the Asia Society Policy Institute's Center for China Analysis, said in a written response to VOA.
“The document cements Xi’s governance approach and his brand of reform, which focuses on consolidating power rather than adopting new liberal economic paradigms, endures,” she wrote.
Balancing reform and national security
In addition to laying out the long list of reform goals, the communique also highlighted the need for the party to balance development and security.
“We will strengthen the network for preventing and controlling public security risks so as to safeguard social stability [and] improve public opinion guidance and effectively deal with risks in the ideological domain,” it said.
The document also reiterated that the party’s top leadership, especially Xi Jinping, remains the “fundamental guarantee” for deepening reforms.
“We must uphold Comrade Xi Jinping's core position on the Party Central Committee and in the Party as a whole and uphold the Central Committee's authority and its centralized, unified leadership,” the communique said.
Some experts say the communique’s emphasis on upholding public security and following the guidance of party leadership shows Beijing is trying to tighten control over efforts to reform China’s troubled economy.
“Tightening control is at the heart of [Beijing’s] dilemma because in order for the reforms to work, they need to loosen control,” Dexter Roberts, a nonresident senior fellow at Atlantic Council’s Global China Hub, told VOA by phone.
While other specific reforms are expected to be rolled out in other plenum documents in coming days, Lee said she expects consumer spending in China to remain sluggish and that recovery in the property sector remains slow in the short term.
“The prolonged transition period poses significant risks. It could lead to reduced investments and slower economic growth,” she told VOA, adding that the Chinese government will likely use targeted interventions to boost key sectors.
However, some analysts think that Beijing’s state-led economic growth model is unlikely to yield the results the government hopes for.
“China’s state-led investment, which concentrates resources on areas such as semiconductors and artificial intelligence, is going to take years to pay dividends, and meanwhile, the economy will continue to fail to deliver growth and jobs,” Andrew Collier, managing director of Orient Capital Research in Hong Kong, told VOA in a video interview.
He said unless the government takes concrete steps to reduce its involvement in economic reforms, the country’s economic downturn could grow worse in coming years.
