The Communist Party of China (CPC) General Secretary, Xi Jinping chaired a meeting of the Politburo on 27 June 2024. The meeting announced that the 20th Central Committee will hold its Third Plenum in Beijing from 15 to 18 July. As in the past, the Plenum issue an authoritative direction or decision to guide policymaking in China for the next decade and beyond. What can be expected as an outcome of the Plenum? The outcome document will focus on “further comprehensively deepening reform and advancing Chinese-style modernization”. From a Xi perspective, the Third Plenum is meant to further cement his power and enable him to continue with the anti-corruption campaign. The reality of China is that it is the anti-corruption campaign which is the real enabler of Xi’s centralisation of power.
Any understanding of Third Plenums needs to understand that they are essentially meant to make plans that will help expand on existing schemes and policies. Xi Jinping’s first Third Plenum in 2013 provided the underpinnings for Xi’s centralization of power. This time around, the Plenum will pay attention to achieving Xi’s goals of technological self-reliance, financial risk management, re-stabilising centre-province relations, and improving social welfare. However, the real focus will be on political futures rather than economic future, even though China actually needs to pay more attention to this angle.
It is interesting that Xi has said China needs to comprehensively deepen reform. He also noted that the phrase was meant to encapsulate reform in all areas, and not just reform in one area, meaning thereby that politics will continue to drive economic reform. More importantly, he will use the Plenum to move ahead with his political agenda, primarily driven by the anti-corruption campaign. Xi has said he will “advance the modernization of China’s governance system and capacity”.
Prior to going ahead with the discussion on the Plenum and its priorities, it is important to look back a little to the current state of the anti-corruption campaign with particular reference to the Peoples Liberation Army (PLA). Last year, when President Xi sacked the head of the Rocket Force and expelled General Wei Fanghe and General Li Shangfu from the CPC for corruption, it became evident that Xi intended to ensure complete loyalty from the PLA. The crimes of General Wei Fanghe were said to be extremely serious, with a highly detrimental effect. General Wei took over at the helm of the Second Artillery Corps of the PLA in 2012 and continued to lead the key part of the nuclear arsenal of China after it was restructured as the Rocket Force in 2015.
Xinhua reported: “Li Shangfu betrayed his original mission, betrayed the trust of the Party Central Committee and Central Military Commission and caused great damage to the party cause and national defence;” grave charges indeed with Chinese characteristics. General Li a Chinese aerospace engineer who had headed the all-important PLA Rocket Force and had been selected for the top defence post by President Xi himself. US intelligence had claimed that one of the reasons for the sacking of the generals was because they had filled Chinese missiles with water. Ridiculous as this may sound, the point is that something serious must have been uncovered for Xi to have taken the decision to sack Li Shangfu and Wei Fanghe. Subsequent reporting indicated the purge in the Rocket Force was due to ‘widespread corruption’ that had undermined ‘efforts to modernize the armed forces and raised questions about China’s ability to fight a war,’ according to US Intelligence.
This is why it is important to see the Third Plenum having political undertones. However, the rare admission by President Xi in his New Year address that “some enterprises had a tough time” and “some people had difficulty finding jobs and meeting basic needs” implies that he is aware about the state of the economy and would like to address this issue. Notably, the economy remarks came just a fortnight after Xi first mentioned the topic of “further comprehensively deepening reform and advancing Chinese-style modernization” in December 2023. There is a realisation that national security and tech self-reliance has to co-exist with a baseline level of economic growth in China. While regime stability still remains of paramount importance, the CPC also acknowledges that economic development lies at the root of China’s success thus far.
Chinese economic experts say that for the country to become a “moderately developed country” by 2035, Beijing would have to achieve an average annual growth rate of 5% until 2035. This is usually linked to a per capita of at least US$ 20,000. Whether this target is achievable remains moot, but it is likely that Xi will want to stick to his 2035 deadline. How does Xi propose to achieve his goal? For him “reform and opening” is an important magic weapon. Remember Xi is no Deng Xiaoping, unless he has some tricks up his sleeve, which the world has not seen so far. China’s strategy thus far has been to utilise State control to bolster the economy, but it appears that Xi wants the State and Party apparatus to be more effective in terms of implementation, a necessity in making China achieve its long-term economic goals. Significantly though, Xi will ensure that all aspects of “reform and opening” will conform to his plans of political stability.
Thus, the Third Plenum will see Xi Jinping continue to prioritize CPC control, financial de-risking, moving towards technological self-reliance, and an investment-heavy policy on industry. Can one expect Xi to do things differently and spring some surprises at the Third Plenum? This seems unlikely, because his primary focus is political, and the economy is a by-product of strategies to maintain regime stability. Given this situation, Xi’s ‘surprises’, if indeed he makes any, will be modest and emphasize the value of incremental progress rather than sudden breakthroughs. At the end of the day, what makes Xi such a powerful leader is his anti-corruption campaign. The Third Plenum will see him go down that path with new vigour.
Source: https://asiatimes.com/2024/01/whats-behind-the-water-in-chinese-missiles-tale/
Source: https://econofact.org/what-explains-chinas-economic-slowdown