Xi’s answer to critics: Persist!
It lacked the drama of this week’s Republican National Convention in Milwaukee: no country music, no bandaged ears, no delegates wearing “Make America Great Again” baseball caps.
Yet the Third Plenum of the Twentieth Central Committee of the Chinese Communist Party this past week in Beijing was perhaps more consequential, as a doubling down of Chinese leader Xi Jinping’s determination to put party and state control ahead of economic growth and consumers.
In that spirit, the meeting’s communiqué deployed the Chinese word for persist, jianchi, seventeen times. As the Wall Street Journal’s Rebecca Feng and Chun Han Wong wrote, it was “an echo of state-media messaging that casts resistance to Xi’s vision as proof that his changes are necessary.”
For the uninitiated, the Third Plenum often is the most significant moment in China’s five-year political cycle.
Back in 1978, the party embraced then-leader Deng Xiaoping’s insight that “initiative cannot be aroused without economic means,” which led to reforms that set the stage for decades of economic growth. In 2013, the Third Plenum loosened the country’s one-child policy and embraced the market’s role in the Chinese economy—though the market-friendly promises were not really implemented.
The last time a Third Plenum was held, in 2018, it was accompanied by a constitutional change abolishing term limits and ensuring Xi’s continued autocratic rule. This was accompanied by a deepening of tensions with the West, including the European Union’s labeling of China as a “systemic rival” the following year.
China delayed this year’s Third Plenum, which was due to be held last autumn, without explanation, which raised speculation that the leaders of the world’s second largest economy didn’t yet have their ducks in a row.
“As China grapples with a property crisis, high youth unemployment, tumbling business and consumer confidence, and an ocean of local government debt, one might expect the government to put everything it has into plans to pull the country out of the economic doldrums,” wrote the Atlantic Council’s Jeremy Mark recently.
This week’s proceedings focused a lot on concepts of “reform” and “modernization,” but not of the kind that Chinese or foreign investors would embrace. Rather, China will focus even more on building industries needed for its confrontation with the United States, particularly in high-tech, and it will reinforce the party’s hold. A decade ago, the Chinese economy was growing well above 7 percent per year. Now, however, the Chinese government has set 5 percent as a growth target for 2024, and even that will be a significant stretch.
And here’s where the Third Plenum outcome differs wildly from the Republican convention’s stated ambitions to shake up Washington. As the Wall Street Journal reporters wrote, the plan Chinese leaders put forward after this week’s meetings “suggests a future that looks more or less like the present.”
Just like several of its predecessors, the Third Plenum will be consequential, but this time in its resistance to change, despite signs that the party is doubling down on an economic approach that investors and markets see as unsustainable. As is often the case in an autocracy, in which dear leader must come across as infallible, the plenum didn’t offer any plan B if the markets are right.
Frederick Kempe is president and chief executive officer of the Atlantic Council. You can follow him on Twitter: @FredKempe.
This edition is part of Frederick Kempe’s Inflection Points Today newsletter, a column of quick-hit insights on a world in transition. To receive this newsletter throughout the week, sign up here.
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Image: A giant screen shows news footage of Chinese President Xi Jinping attending the third plenary session of the 20th Central Committee of the Communist Party of China (CPC), in Beijing, China July 18, 2024. REUTERS/Tingshu Wang