(Reuters) -The elite Central Committee of China’s ruling Communist Party will hold a closed-door meeting from Monday to Thursday to discuss, among other things, the country’s 15th five-year development plan.
The meeting, known as a plenum, is the fourth since the 2022 Party Congress. Here is what it all means:
WHAT’S A PLENUM?
The Central Committee is the largest of the party’s top decision-making bodies, and it typically holds seven plenums between congresses, with the fifth traditionally deliberating on five-year plans.
But due to an unexplained nine-month-long delay in the third plenum until July 2024, the party is expected to now review the 2026-2030 plan during the fourth, on October 20-23.
To prevent leaks, plenum attendees are traditionally confined to the venue for the duration of the meeting. Little, if any, news of the proceedings is made public until it closes. Foreign media and most Chinese reporters don’t have access.
On the day the plenum ends, China releases a brief report outlining what was agreed – this time, the general scope of the next five-year development plan. To project party unity, there will be no mention of any dissent.
Some days later, potentially on the week starting October 27, Beijing releases more details, although it’s unlikely these would contain specific targets or costs for any new policies.
These are more likely to be released in March, when parliament approves the next five-year plan.
WHAT’S A FIVE-YEAR PLAN?
It’s a strategic blueprint that outlines economic and social development goals over a five-year period, guiding national policy, investment and reform.
It typically covers economic growth, industrial modernisation, technological innovation, environmental protection, national security and social goals.
The 2026-2030 plan will be China’s 15th five-year plan since it adopted Soviet-style quinquennial policy formulation cycles in the 1950s.
The 1980s plans were seen as pivotal in China’s staggering subsequent development into the world’s second-largest economy. These reforms allowed private ownership, opened up its markets and paved the way for the country’s integration into global trade.
The 2000s and 2010s focused on poverty alleviation and transitioning towards an economic model relying more on domestic consumption than on infrastructure investment and manufacturing.
China has declared success in fighting poverty. But it is widely accepted that it fell short on fostering durable household demand.
WILL THE PLENUM DISCUSS OTHER TOPICS?
Most likely.
Fourth plenums have in the past deliberated on party governance, including personnel reshuffling and disciplinary actions.
Diplomats and other observers will look at the people who might fall from grace or rise through the ranks, particularly in the military, to better understand Beijing’s thinking.
WHAT’S AT STAKE
The next five-year plan will be closely watched for how much emphasis China places on rebalancing its economy.
Most observers expect strong language from Beijing on its intentions to boost consumption.
In practice, however, analysts say the trade war with the U.S. is likely to keep policymakers focused on industrial upgrading and technological breakthroughs, which means resources would by and large keep flowing towards factories and strategic investments rather than consumers.
This might consolidate China’s achievements in developing world-leading industries, such as electric vehicles or green energy and open up opportunities in other sectors where it still lags rivals, such as semiconductors or aircraft.
But it also means deflationary forces will persist and debt will accumulate, while China’s limited contribution to global demand relative to its growing stake in the supply of manufactured goods will keep tensions high.
The plenum comes days before an APEC summit in South Korea, where Presidents Xi Jinping and Donald Trump might meet. It also comes days after Beijing tightened export controls on rare earths, prompting a threat from Trump of triple-digit tariffs.
Five-year plans don’t change on short-term fluctuations in diplomatic and trade relationships, but analysts say Beijing sees protecting national interests in times of growing great power rivalry as the basis of every policy it formulates.
(Writing by Marius ZahariaEditing by Shri Navaratnam)
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