My Take | Beijing points the way forward as treacherous road lies ahead
- Third plenum offers significant guidance on China’s new modernisation and ‘deepening’ reforms, setting the direction for many years to come
China’s plenary sessions matter, but this one especially. A foreign media narrative seems to have built up that the top-level four-day closed door meeting – which ends on Thursday – won’t offer real change or drastically new measures.
If they are talking about quick fixes, that’s rather beside the point. Seven plenums are held with the party’s Central Committee in between two major congresses over a decade. This one, the third, tends to focus on long-term economic reforms, in other words, the bigger picture all the better to formulate overarching policies.
That makes sense, because the current five-year plan ends next year. Specific policy details will follow. Deng Xiaoping initiated the country’s epochal economic reforms at the third plenum in 1978. When he announced the “open door” policy, there weren’t too many details. It’s the policy direction that matters.
As for the current one, we know enough to know it needs to be taken seriously if you want to understand where China is going or plans to go. Economically, the country faces slowing growth. Geopolitically, it has to confront an adversarial United States and an increasingly hostile Europe. The global environment in which the country’s economy first took off in previous decades is now completely different and dangerously volatile.
Short electoral cycles encourage piecemeal solutions, usually formulated in policy silos. Beijing can afford to think in longer terms. The new modernisation aims to develop “new quality productive forces” and “deepen” ongoing reforms.
If you think that’s just vague, well, the resulting boom in tech advances has translated into exports of affordable electric cars and solar panels that will help the economy to reach the targeted growth of roughly 5 per cent by the end of the year. This is despite the badly hit real estate market, once the key engine of growth but now being superseded by new productive forces.
That’s why major Western economies, led by the US, are targeting those Chinese industrial sectors. It’s not only that they can’t compete – if your goal is to contain China, those are the sectors you want to hit hard. It’s not just a trade war, but economic warfare.
