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The administration of Chinese President Xi Jinping has once again demonstrated its stance of emphasizing “national security” over the economy. Stable economic growth will be even more difficult to achieve in the future.
The third plenary session of the 20th Central Committee of the Communist Party of China was held in Beijing. A decision to advance reforms to promote “Chinese modernization,” its own development model that differs from that of the United States and Europe, was adopted.
The Xi administration, which was inaugurated in 2012, began its third term in 2022. The third plenary session is held a certain period of time after the end of the party’s National Congress, which is held once every five years, and medium- and long-term economic policies are discussed. The latest decision can be said to have reaffirmed that China will not take the same steps as Western democracies and have a free economy.
Regarding the economic policy, the communique adopted during the session mentioned “reform” more than 50 times, but it lacked specific measures as to what and how reforms will be implemented.
Foreign observers had paid attention to what remedies would be presented for the slumping real estate market — a major concern for the Chinese economy.
The communique cited the issue of real estate as one of the “key areas.” However, it only noted that China “will implement various measures for preventing and defusing risks.” This will do little to dispel concerns, and market players are said to have voiced disappointment.
The Chinese economy is also suffering from sluggish consumption. The need to shift from a conventional economy led by investment and exports to one that emphasizes consumption and domestic demand has long been pointed out, but reforms in this direction have not progressed.
Meanwhile, what stood out in connection with the session was the boost to the authority of Xi, who also serves as the party’s secretary general.
The state-run Xinhua News Agency has released a lengthy article titled “Xi Jinping the reformer,” in which he was hailed with such language as: “Xi is regarded as another outstanding reformer in the country after Deng Xiaoping.”
While China has set 2035 as the deadline for basically realizing the “socialist modernization,” the session also set a new goal that “the reform tasks laid out in this resolution shall be completed by the time the People’s Republic of China celebrates its 80th anniversary in 2029.”
Xi’s third term in office will last until 2027, but by setting the goal beyond that year, the communique may have laid the path for his continuation with a fourth term.
The communique also positioned national security as a factor that “provides a pivotal foundation” for “Chinese modernization.” China revised its anti-espionage laws last year, and there are concerns that controls will be further tightened. This will inevitably discourage foreign companies from doing business with China.
The Xi administration needs to recognize that if the economy continues to stagnate, it will be difficult for China to secure national security because social unrest will increase.
