Beijing opted for greater control over economic liberalization at the Third Plenum of the 20th Central Committee.
The Chinese Communist Party held the third plenary session of its 20th Central Committee from July 15 to July 18. For three days, Xi Jinping and the more than 360 members of the top Party leadership cloistered themselves away at the military-controlled Jingxi Hotel to reach decisions on key policies and personnel adjustments.
To observers, the Third Plenum presented an opportunity for Beijing to clarify the direction it was taking the economy amid noticeable signs of slowing growth and international concerns about China’s export of overcapacity. Another pressing question was whether Beijing would release measures that provide reassurance about its policymaking capability after a string of confidence-undermining decisions in recent years. Meanwhile, China watchers were on the lookout for signs that would help confirm or deny political rumors that had been circulating before the plenum, including those about Xi’s health and personnel arrangements.
Details from the state media report, press conference, and official documents released following the conclusion of the Third Plenum offer dim prospects for those hoping that the meeting might presage economic liberalization and a substantial change in the Xi leadership’s policies of recent years. Likewise, as far as various prior rumors anticipating dramatic political developments are concerned, the aftermath of the plenum has thus far proved underwhelming.
From ‘decisive role’ to ‘leverage’
Part of the buzz surrounding the Third Plenum was the notion that Beijing could potentially take pragmatic action to further open China’s markets and introduce other liberal economic reforms. After all, the Third Plenum of the 18th Central Committee in 2013 decided that the markets should play a “decisive role” in allocating resources in the economy and introduced other measures which suggested that China was taking “reform and opening up” to another level.
The Xi leadership, however, did not actualize the 2013 Third Plenum goals. And despite the 2024 Third Plenum introducing a Decision that called for “further comprehensively deepening reforms” and “Chinese-style modernization,” the details that have been made public suggest that Beijing is instead doubling down on ideological indoctrination, authoritarian control over the economy and society, and the CCP’s hegemonic agenda.
Beijing’s ideological priorities were made clear from ordering of items in the Third Plenum communiqué. The communiqué praised the Politburo’s work since the second plenary session and stressed that the “further comprehensive deepening of reforms” must adhere to Marxism-Leninism and the political theories of successive CCP leaders, with a particular emphasis on Xi Jinping’s political viewpoints. The focus on ideology at the Third Plenum is likely intended to boost Xi’s “quan wei” (authority and prestige) and the Party’s “centralized and unified” leadership over the regime. Putting ideology at the forefront also indicates that the reforms introduced at the Third Plenum are to be interpreted and implemented within the socialist framework.
The economic reforms proposed at the Third Plenum hint at greater state intervention as the CCP attempts to move China towards greater self-sufficiency while strengthening its control over all aspects of the regime. Instead of the markets being permitted to play a “decisive role,” the plenum called for both “market mechanisms” and the balancing of “deregulation with effective management.” That is, while Beijing still wants a degree of economic liberalization to aid in resource allocation, it is prioritizing the strengthening of government control to prevent and deal with the “disorderly expansion of capital” that took root during the Jiang-Hu era.
Finally, the plenum’s pledge that “Chinese-style modernization” is a “path of peaceful development” is a repackaging of the CCP’s hegemonic agenda. As part of “peaceful development,” the plenum advocates for an “equal and orderly multipolar world,” or a reference to the CCP’s specific brand of authoritarian bloc “multipolarism” that Communist China and Russia are promoting as a replacement for the U.S.-led liberal-democratic international order. Beijing’s continued insistence on revisionism and its plan for greater autarky as indicated from what was discussed at the Third Plenum foreshadow a more significant worsening of China’s economy and heightening of geopolitical tensions in the future.
Personnel changes
The Third Plenum saw several noteworthy personnel adjustments.
First, Party Central accepted the resignation of former foreign minister Qin Gang and removed him from the Central Committee, but still referred to him as “comrade.” This suggests that Qin received a “soft landing” despite being purged in July 2023. The handling of Qin’s case also hints that he could in the future be found guilty of personal misconduct and not serious corruption.
In analyzing Qin Gang’s resignation, we wrote earlier that there is a good chance that he will not be found guilty of serious wrongdoing. Also, questionable rumors about Qin’s fate have been debunked, including reports that he had died in custody or that his case is connected with military corruption. As we previously wrote, we believe that Qin’s purge could be linked to efforts by Xi’s remaining political enemies to exploit the Xi leadership’s prioritization of national security to “‘‘manipulate’ the PRC leader into taking out his own allies and ultimately undermining his own interests.”
Second, Party Central affirmed that former defense minister Li Shangfu, former People’s Liberation Army Rocket Force commander Li Yuchao, and former PLARF chief of staff Sun Jinming had been purged on corruption charges. This development and the non-elevation of military officers who are alternate members of the Central Committee to full members indicate that corruption in the military is very serious and is impacting the PLA’s ability to pursue acts of aggression.
Rumors debunked
Two notable political rumors that were circulating before and during the Third Plenum were debunked with the conclusion of the meeting.
On the first day of plenum, a rumor that Xi Jinping had suffered a stroke while hosting the meeting started making the rounds. However, state broadcaster CCTV’s footage of Xi participating in discussions and speaking at the Third Plenum after the meeting showed that he was in relatively good health. CCTV also released footage on July 20 of Xi visiting the Vietnam embassy in China to mourn the death of Vietnamese Communist Party leader Nguyen Phu Trong. We previously assessed in analyzing publicly available information that it is highly unlikely that Xi had a stroke.
Another rumor circulated was that Peng Liyuan could be elevated to the Politburo or other special positions at the Third Plenum. This was demonstrated to be unfounded following the release of the official personnel adjustments. We analyzed earlier that “anti-Xi” forces could be behind the rumors as they look to undermine Xi and his leadership. We believe that despite appearances, tensions are growing in the CCP’s elite ranks and the PRC is less politically stable than appearances suggest.
