China’s Party Plenum focuses on economic stabilization

China’s Party Plenum focuses on economic stabilization

After four days of intense discussion, the elites of the Chinese Communist Party have elaborated a framework for the 13th Five Year Plan that will define new strategies for the country’s economic and social development goals

The Plenum in China is an annual summit that gathers more than 350 delegates from every corner of country. It also represents a viable tool in the hands of the CCP’s leadership to determine the direction of the economic path, enforcing decisions considered critical for the future of the country.

Given the nature of its political institutions, China remains a highly centralized economy where the party determines the agenda for political and economic development. However, plenums have often represented an important occasion to unveil marked social and political changes for the Chinese society, such the Great Leap Forward in 1958 that led to a rapid industrialization of the country, or the great economic reforms strongly advocated by Deng Xiaoping in 1978.

The comprehensive plan will be touching a wide range of key issues, such as environmental regulation, defence expenditure, regional development policy, and clean energy, to name few.

However, the core issues of the next five-year plan are expected to focus on identifying new and more effective strategies to expand the level of competitiveness of its manufacturing sector, increasing the production capacity and acquiring new and more advanced production technologies to enhance the level of internal production.

Furthermore, this time the Chinese leaders are more determined to pursue a path oriented toward the stabilization and the strengthening of the Chinese economy, especially after the marked economic slowdown experienced in the last three months.

The latest figures show that China is slowly recovering from the recent economic slowdown that has affected the health of the Asian markets, but also unveil deep concerns over the evident decline of Beijing’s GDP after many decades of unstoppable growth.

In fact, China’s economy in the July-September quarter grew 6.9 per cent from the year, dipping below 7 per cent.

Yet, the Chinese leaders have been under pressure and the main priority now is to provide more effective strategies to enhance economic performance after China has experienced the slowest GDP growth since the financial crisis hit global commodity prices, affecting countries whose markets are highly dependent on China’s imports.

(Source: National Bureau of Statistics )

President Xi’s ambitions on economic agenda

Fostering the conditions to encourage a healthy economic growth has been the most urgent goal for President Xi, rejecting the international worries about the downturn of the Chinese economy as mentioned during his last State visit to Washington.

International stakeholders have shown great concern over the China’s shock devaluation therefore President Xi is determined to restore confidence in the market through the launching of new strategies featuring heavy investment in infrastructures and shift toward a consumption-led model as discussed during the plenum.

From a political perspective, the plenum embodies a decisive opportunity for President Xi’s to consolidate its personal power and prestige inside the CCP’s inner circle. Despite its rigid political structure, Chinese elites’ decision-making process is highly centralised, but essentially horizontal with several power centres at the top levels elaborating and identifying different national priorities.

Traditionally, political power has been characterised by a fragmented authoritarianism model in which different actors affect the political decision-making process and this has been the most distinctive feature of the Chinese political apparatus since the post-Mao era.


However, President Xi’s leadership has been characterised by a more decisive and autocratic role in the party at expenses of the traditional image of collective leadership that has defined the CCP modern elites.

Many observers have pointed out that President Xi’s new vision based on the “Great Rejuvenation of the Chinese Nation” has been increasingly characterized by an evident recalibration of his personal leadership, bypassing the intricate systems of bureaucratic bodies established to prevent an excessive concentration of political power in the hands of a limited elite.

In addition, the restless “tigers hunting campaign” aiming to eradicate corruption inside the party and punish those who are pursuing personal interests has not spared anyone, including high-level ranking officers such as General Xu Caihou and General Guo Boxiong and the powerful Zhou Yongkang, former Member of the Standing Committee and Minister of public security.

This campaign has been crucial to implement Xi’s power grip and fill the positions with reform-minded bureaucrats willing to facilitate his quest for reforming China. The ruling party’s legitimacy depends on Chinese elites’ ability to provide broader structural reforms able to sustain its long-term economic expansion, but it also crucial to restore the image of the Party, too often discredited by corrupted officers.

Moreover, dismantling old patronage networks and expelling corrupt or hostile party members would allow to President Xi to bring in more of its supporters and consolidate his political power, a critical step to proceed with a wide range of economic and political reforms that could jeopardize the personal interests of many influent shareholders in China.

Even if Chinese leadership understand the benefits of wider economic liberalizations and long-term reforms aiming to enhance the efficiency of state-owned enterprise sectors, it is quite unlikely that decisions finalized in this plenum could unveil marked policy directions able to provide to China significant economic and political tools needed to consolidate its wobbly economy and ensure a smooth transition toward a consumption-oriented model.

Categories: Asia Pacific, Politics

About Author

Daniele Ermito

Daniele Ermito is a London-based analyst. He is also a GRI analyst and regular contributor for the Foreign Policy Association, where he writes mostly on the Koreas ‘blog. He holds a BA (Hons) in International Relations from the University of Bologna and a MSc in Asian Politics from the School of Oriental and African Studies. His areas of research include Northeast Asia security, Japanese politics and Chinese foreign policy. You can follow him on Twitter @DanielRmito.