The Chinese Communist Party (CCP) concluded the Third Plenary Session of its 20th Party Congress on July 18. Held at the highly secured Military Conference Hotel on the western outskirts of Beijing, the meeting concluded with a ceremonial appearance by top leader Xi Jinping. Called the Third Plenary Session because it is the party’s third meeting in a five-year cycle, it will address economic policy, the results of which will be scrutinised by both party officials and global corporations.
The Chinese Communist Party (CCP) concluded the Third Plenary Session of its 20th Party Congress on July 18. Held at the highly secured Military Conference Hotel on the western outskirts of Beijing, the meeting concluded with a ceremonial appearance by top leader Xi Jinping. Called the Third Plenary Session because it is the party’s third meeting in a five-year cycle, it will address economic policy, the results of which will be scrutinised by both party officials and global corporations.
The Third Plenum appropriately addressed economic issues, but it broke with precedent: It wasn’t scheduled at its usual time last fall, sparking speculation about delays caused by party purges and economic headwinds. Now that the meeting is finally over, an analysis of speeches and documents can provide insight into Beijing’s economic thinking and gauge how China’s Communist Party institutions have functioned under Xi Jinping’s norm-bending rule.
One of the catchphrases repeated throughout the session was “Reform and Opening Up.” The term has a rich history, but today it is used in a completely different context than when it was first coined. In 1978, paramount leader Deng Xiaoping was picking up the remains of Mao’s chaotic rule. Deng sought to create stable conditions for economic growth. He sidelined Maoist cadres who advocated “class struggle” and backed reformers eager for economic experimentation. The keynote address to the Third Plenum in 1978 was Deng’s victory march. In the same military hotel, in his lilting Sichuan accent, Deng called for China to open up to foreign capitalists and overseas manufacturing companies. This new “Reform and Opening Up” policy drove decades of growth, lifted the masses out of poverty, and integrated the People’s Republic of China into the global economy.
Official meetings had been irregular under Mao, but Deng Xiaoping wanted a more steady rhythm. The terrors of the Cultural Revolution had subsided, and cadres found a certain solace in bureaucratic ritual. The centerpiece of the party calendar is the National Congress, held in October of years that usually end in a 2 or a 7, in a pattern established after Mao’s death. (Xi Jinping, for example, became general secretary of the Communist Party of China in 2012 and won a second term in 2017 and an unprecedented third in 2022.) At the Congress, thousands of delegates gather in Beijing to ratify leadership and ideological decisions, watched by 99 million party members.
After the end of the Party Congress, auxiliary plenary sessions are convened for five years until the next Plenum. These interim sessions usually bring together hundreds of CCP leaders and selected experts and have been held five to nine times (most commonly seven times) before the next Party Congress five years later. The plenary sessions usually address party personnel (First Plenary), government personnel (Second Plenary), economic reform (Third Plenary), party construction activities (Fourth Plenary), the formulation of a new five-year plan (Fifth Plenary), culture and history management (Sixth Plenary), and a summary before the next Party Congress (Seventh Plenary). Each session also handles confidential party matters that have arisen in the interim. Since the Second Plenary in early 2023, several members of Xi Jinping’s leadership, including the defense minister and foreign minister, have been caught up in corruption and other misconduct and have disappeared into the CCP’s disciplinary machinery. At this plenary session, their fates were sealed. Some of the perpetrators who were expelled from the Party will now face criminal trials. Others have received more lenient punishments. Last week, former foreign minister Qin Gang, who had been missing for a year, formally withdrew from the elite membership of the Central Committee. But he retained the title of “comrade” in official documents, so there is no dishonor in the demotion. These personal intrigues are ultimately less important than the overall tone, the “Party line” and the “theme” of the propaganda. In earlier eras, the themes of plenary sessions reflected more collective leadership. Today, the agenda closely follows the will of President Xi himself.
Since Deng Xiaoping’s breakthrough in 1978 set the template, observers have watched the Third Plenum intently for harbingers of change. The results have always been mixed. In the 1980s, one Third Plenum expanded economic reform from rural to urban areas, but the next one intensified state wage controls and commodity price ceilings amid rising inflation. After the Tiananmen Square massacre in June 1989 put political reform on hold, the 1993 Third Plenum signaled that economic reform would continue. The communique made rhetorical room for capitalism by advocating a “socialist market economy.” This rhetoric led to breakthrough changes: the dismantling of many state-owned enterprises and the end of “iron rice bowl” welfare guarantees for over 20 million people. The Third Plenums in 2003 and 2008 were, in retrospect, weak. It was a missed opportunity to update China’s growth model and correct an unruly (and sometimes greedy) party machine.
When Xi Jinping came to power in 2012, his colleagues entrusted him with the mission of securing the future of the Chinese Communist Party by curbing corruption and implementing structural reforms. Xi Jinping’s first leadership meeting, the Third Plenum, in November 2013, was met with great expectations. It announced major reforms, including plans to end the one-child policy and a determination to allow market forces to play a “decisive” role in the economy. Outside observers, closely watching China’s economic modernization move toward convergence with the West, hailed the Third Plenum as a masterpiece and praised Xi Jinping as a bold “reformer.”
The one-child policy was repealed a few years later. But when China’s stock market crashed in 2015, threatening the stability of the entire economy, the Chinese Communist Party grew disgusted by market mechanisms. The government responded with heavy-handed measures, clamping down on stock sales and detaining financial journalists. Meanwhile, party organs became more visible in everyday life and acted more aggressively against private companies. Human rights lawyers and journalists were caught out in crackdowns, and government regulators brought China’s burgeoning technology sector to its knees. Politics took precedence over economics and took the lead.
By 2018, Xi Jinping had decided to remove term limits for the more important role of General Secretary of the Communist Party of China and President of the People’s Republic of China. Although the position is a state title and technically outside the party bureaucracy and timetable, the move appeared to disrupt the normal rhythm of party politics. The 2018 Third Plenum was held ahead of schedule, in February instead of in the fall. Unusually, the meeting focused on personnel issues rather than economic ones.
Today, looking back at the Third Plenum at which Xi Jinping took office in 2013, we see the limitations of making predictions based on this or any other party meeting. Some plans were carried out. In other cases, unexpected events may have outweighed the best intentions. But whatever the rhetoric, more than a decade later, the reality is that government intervention in the economy is trending toward more, not less. Xi Jinping was a reformer, but he rarely moved in the direction Western observers expected. Since Xi Jinping came to power and held the Third Plenum at the scheduled time of his inauguration, the two subsequent Third Plenums have deviated from the normal timing. Xi Jinping now holds power indefinitely and has accumulated more formal titles and personal influence than any leader since Mao Zedong.
At the recently concluded Third Plenum, President Xi Jinping and his comrades raised a variety of slogans and confirmed the expected themes, some of which reflected Deng Xiaoping’s legacy, such as “reform and opening up” and “modernization with the Chinese style.” While emphasizing safety and stewardship, the document also called for “high-quality development” in key areas deemed essential for future growth, such as green technology and semiconductors. Perennial issues mentioned at previous Third Plenums but never addressed have resurfaced:
In 2003 and 2013, statements were made that a property tax should be introduced to raise local government revenues for health and welfare spending, but no comprehensive policy came to fruition. Now, a collapse in the real estate sector threatens to plunge local governments into debt and the entire economy into crisis. The CCP in 2024 appears more callous to market forces than it was in 2013, repeating the 1993 slogan “socialist market economy” while calling for “market order” and barely mentioning the private sector.
Even in 1978, significant political work was actually being done behind the scenes before Deng Xiaoping’s inaugural Third Plenum. In his closing keynote speech, Deng called on his comrades to “liberate” the Communist Party, but [their] Deng Xiaoping emphasized “positive thinking” and a “positive attitude,” but did not mention the term “reform and opening up,” instead quoting Lenin and praising Mao. Deng framed the new approach in Mao’s words, saying that in pursuit of true Marxism, cadres must “seek the truth from the facts.” Deng’s call for a foreign investment law was the last in a list of bills dealing with mundane issues such as forestry, factories, and labor. The radical impact of Deng’s reforms only became apparent over time, through actions rather than words.
Such may have been the case at the Third Plenary Session in 2013, when Xi Jinping couched his ambitions in the words of his predecessors. Whatever is said from the podium, Chinese policymaking is ultimately subject to the pressures of people and events as much as, if not more than, the token meetings of the Party and state.
The Third Plenum this year has so far produced 5,000 words of statements and “decision” documents, as well as a plethora of notes, commentaries, and explanations meant to clarify the will of the Chinese Communist Party, praising Xi Jinping for “comprehensively deepening reforms” but offering few concrete ideas so far. Whatever China’s political and economic future holds, it seems certain that Xi Jinping will continue to play a central role in guiding both.
