Outcome of Third Plenum likely to disappoint investors, debunks dubious political rumors

  1   Outcome of Third Plenum likely to disappoint investors, debunks dubious political rumors

  Third Plenum communiqué

July 18
1. State mouthpiece Xinhua published the communiqué of the Third Plenum of the 20th Central Committee following the meeting’s conclusion.

The communiqué, which contained over 5,000 characters, said that the plenum reviewed and approved a Decision to “further comprehensively deepen reforms” and “advance Chinese-style modernization” (中共中央進一步全面深化改革、推動中國式​​現代化的決定).

Notable points from the communiqué include:

Politburo achievements

• The plenum affirmed the work of the Politburo since the second plenary session of the 20th Central Committee, noting that it “earnestly implemented the Party’s spirit and work deployments” in the face of “a severe and complex international environment and arduous domestic reform, development, and stability tasks.”
• The plenum highly praised the Politburo’s “successful practices and great achievements” of comprehensively deepening reform in the new era and its study of issues pertaining to “further comprehensively deepening reforms and promoting Chinese-style modernization.” The plenum said that the focus of the current and future periods is promoting “further comprehensive deepening of reforms and Chinese-style modernization.”
• The meeting stressed that 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.

Goals and vision

• The plenum said that the overall goal of further comprehensive deepening of reforms is the continued improvement and development of the socialist system with Chinese characteristics and the advancing the modernization of the regime’s governance system and capacity.
• The CCP regime aims to complete the reform tasks outlined in the Decision by 2029 (the 80th anniversary of the PRC’s founding) and fully establish a “high-level socialist market economic system” by 2035.

The systematic deployment of deepening reform

• The plenum emphasized the need to construct systems and deepen mechanism reforms encompassing aspects such as:
  • A socialist market economy.
  • High-quality economic development.
  • Comprehensive innovation.
  • Macroeconomic governance.
  • Urban-rural integrated development.
  • Openness to the outside world.
  • Whole-process people’s democracy.
  • Socialist rule of law with Chinese characteristics.
  • Culture.
  • Ensuring and improving people’s livelihoods.
  • Ecological civilization.
• The plenum said that it is essential to advance the modernization of national security systems and capabilities, deepen reforms in national defense and the military, and improve the Party’s leadership in further comprehensive deepening of reforms and advancing Chinese-style modernization.

Other details

• Enhance the role of market mechanisms to optimize resource allocation efficiency and maximize benefits, as well as balance deregulation with effective management (“放得活”又“管得住”).
• Unwaveringly consolidate and develop the public sector economy while encouraging, supporting, and guiding the development of the non-public sector.
• Establish a unified national market and improve the foundational institutions of the market economy.
• Improve systems and mechanisms for developing “new productive forces” tailored to local conditions.
• Improve systems that enhance the resilience and security of industrial and supply chains.
• Coordinate and advance integrated reforms in the education, science and technology, and talent systems, and improve the new nationwide system.
• Coordinate and advance reforms in key areas such as the fiscal and financial sectors to enhance the consistency of macroeconomic policies.
• Coordinate new industrialization, new urbanization, and comprehensive rural revitalization.
• Consolidate and improve the basic rural management system and deepen land system reform.
• Promote reform through opening up, leveraging the advantages of China’s massive markets, and enhancing capabilities in international cooperation.
• Strengthen the construction of legal systems related to foreign affairs.
• Enhance cultural confidence, develop advanced socialist culture, promote revolutionary culture, and inherit fine traditional Chinese culture.
• Ensure and improve people’s livelihoods in development and adhere to the principle of doing the best within our capacity and acting according to available resources (盡力而為、量力而行).
• Maintain the Party’s absolute leadership over the People’s Liberation Army and implement the strategy of strengthening the military through reform. Improve the management systems and mechanisms of the PLA, deepen joint operations systems reforms, and advance military-civilian integration reforms.
• Deeply understand the decisive significance of the “Two Establishes,” strengthen the “four consciousnesses,” enhance the “four confidences,” and achieve the “Two Safeguards.”
• Uphold the centralized and unified leadership of Party Central in further comprehensively deepening reforms.
• Chinese-style modernization is a path of peaceful development. It advocates for an equal and orderly multipolar world and inclusive, beneficial economic globalization.
• Studying and implementing the spirit of the Third Plenum is a major political task for the entire Party and the nation in the current and future periods.
• Balance development and security. Effectively implement measures to prevent and resolve risks in key areas such as real estate, local government debt, and small and medium-sized financial institutions.
• Strengthen the social safety risk prevention and control network and maintain social stability.
• Strengthen public discourse guidance and effectively prevent and defuse ideological risks.
• Effectively respond to external risks and challenges, lead global governance, and actively shape a favorable external environment.

2. The Third Plenum announced the following personnel adjustments:

• Alternate Central Committee members Ding Xiangqun (Anhui Province Organization Department head), Yu Lijun (Sichuan Province Organization Department head), and Yu Jihong (president of Beijing Normal University) were elevated to full members of the body.
• Party Central accepted the resignation of Qin Gang (former foreign minister) and removed him from the Central Committee.
• Party Central approved the Central Military Commission’s report detailing the severe disciplinary and legal violations of Li Shangfu (former defense minister), Li Yuchao (former PLA Rocket Force commander), and Sun Jinming (former PLARF chief of staff), and confirmed the Politburo’s earlier decision to expel them from the Party.

  Third Plenum Decision explainer

July 21
Xinhua reported that Xi Jinping gave an explanation of the Decision to “further comprehensively deepen reforms” and “advance Chinese-style modernization” at the Third Plenum.

Key details include:

Reasons for establishing the Decision as the theme of the plenum

• The Decision came about as an urgent need to unite the people’s hearts, gather strength, and achieve the central task of the Party in the new era and on the new journey.
• The Decision fulfills an urgent need to improve and develop the socialist system with Chinese characteristics, as well as advance the modernization of the national governance system and governance capabilities.
• The Decision fulfills an urgent need to promote high-quality development and better adapt to the changes in the main social contradictions in China.
  • Currently, the outstanding issue facing the promotion of high-quality development is still the imbalance and inadequacy of development.
• The Decision meets an urgent need to respond to major risks and challenges, and to ensure the steady and long-term progress of the Party and the country’s undertakings.
  • The world is currently experiencing tremendous changes unseen in a century, with frequent local conflicts and turbulence, intensifying global issues, and continuous escalation of external suppression and containment. Also, China’s development is entering a period of coexistence of strategic opportunities, risks, and challenges, with increasing uncertainties and unpredictable factors. Various “Black Swans” and “Gray Rhinos” may emerge at any time.

Drafting the Decision

• November 2023: The Politburo established a drafting group for the Third Plenum documents. Xi Jinping headed the drafting group, with Wang Huning, Cai Qi, and Ding Xuexiang serving as deputy heads.
• Nov. 27, 2023: The Central Committee issued a notice to solicit opinions from various regions, departments, and sectors, as well as some cadres and the public, on Third Plenum topics.
• May 7, 2024: The Third Plenum draft decision was circulated to some in the Party to solicit opinions, including senior Party members, the heads of the central committee of various democratic parties, the All-China Federation of Industry and Commerce, representatives of non-Party individuals, and relevant enterprises, experts, and scholars.

Composition of the Decision

• The Decision has 15 parts and 60 articles, and is divided into three major sections.
  • The first section is a general discussion. It mainly elaborates on the significant meaning and overall requirements of further comprehensively deepening reforms and promoting Chinese-style modernization.
  • The second section elaborates on the deployment of reforms concerning the economy, politics, culture, society, ecological civilization, national security, national defense, and the military.
  • The third section discusses strengthening the Party’s leadership over reforms and deepening the reform of the Party construction system.

  Third Plenum Decision

July 21
Party Central released the full text of the Decision to “further comprehensively deepen reforms” and “advance Chinese-style modernization.” Noteworthy points include:

The importance and necessity of the Decision

• The Decision is an important judgment of Party Central’s, summarizing the significant achievements of comprehensively deepening reforms since the new era.
• The Decision, which stands on a “new historical starting point” above the “epoch-making” Third Plenums of the 11th and 18th Central Committees, clearly defines the overall goal of further comprehensively deepening reforms. This goal is in line with the overall goal proposed by the Third Plenum of the 18th Central Committee and connects with the strategic deployment made at the 20th Party Congress, providing clear goal orientation for further comprehensively deepening reforms.
• The Decision puts forward the principles of “further comprehensively deepening reforms,” which are a scientific summary of the valuable experiences of comprehensively deepening reforms since “reform and opening up,” and especially in the new era.

Economic and livelihood reforms

• Promote the strengthening, optimization, and expansion of state-owned capital and state-owned enterprises.
• Promote the concentration of state-owned capital in:
  • Important industries and key fields related to national security and other important industries and sectors that concern the lifeblood of the national economy.
  • Public services, emergency capabilities, and public welfare.
  • Forward-looking and strategic emerging industries.
• Legislation will be drafted and enacted to promote the private economy.
• The Decision specifically mentions preventing and correcting the use of administrative and criminal means to intervene in economic disputes, and imposing the same responsibility, crime, and punishment for acts that infringe on the property rights and legitimate interests of all types of ownership economies.
• A tax system compatible with new business forms will be studied.
• Regarding the financial difficulties of local and grassroots governments, it is proposed that the fiscal relationship between the central and local governments be improved, increase local autonomous financial resources, expand local tax sources, increase general transfer payments, and enhance the matching degree between local financial power and responsibilities.
• Advance the shift of the consumption tax collection stage and steadily allocate it to local governments.
• Reasonably expand the scope of use for funds raised from the sale of local government special bonds, allowing a greater share of such funds to be used as capital in more sectors and on a larger scale.
• Regulate the management of non-tax revenue. Appropriately delegate some non-tax revenue management authority to local governments for differentiated management based on local conditions.
• Appropriately strengthen central government authority, increase the proportion of central fiscal expenditures, and prohibit illegal requirements for local governments to arrange matching funds.
• Require the exploration of implementing national macro balance sheet management and optimizing the adjustment of various stock structures.
• Formulate a financial law.
• Improve the mechanisms for protecting financial consumers and cracking down on illegal financial activities. Establish a firewall for industrial and financial capital.
• A new mechanism will be established for cooperative development across administrative regions.
• Propose implementing a system of providing basic public services based on permanent household registration and accelerating the urbanization of the rural migrant population.
• Propose improving the normalized mechanism to prevent poverty return to rural populations. Establish a stratified and classified assistance system for rural low-income populations and underdeveloped areas. Coordinate the establishment of an interprovincial horizontal benefit compensation mechanism between grain-producing and grain-consuming regions.
• Improve systems for facilitating the lives of foreign personnel entering and residing in China, including residence, medical, and payment services.
• Deepen the reform of the salary determination mechanism for state-owned enterprises. Reasonably determine and strictly regulate the salaries, allowances, and subsidies of officials at all levels in state-owned enterprises.
• Fully empower city governments with autonomy in regulating the real estate market and implement city-specific policies.
• Implement reforms to change the way real estate development is financed and to improve the advance purchase system for commodity housing.
• Improve the real estate tax system.

Social governance

• Explore the establishment of a unified national population management system.

Education, science, technology, talent, and innovation reforms

• China will become a strong country in education, science, technology, and talent by 2035.

Democratic politics and rule of law reforms

• Reform and the rule of law must be unified. Major reforms must be legally based. Promptly elevate reform achievements into the legal system.
• The rule of law in China adheres to Xi Jinping Thought on the rule of law. Firmly grasp the correct political direction of building a law-based China. Adhere to the Party’s comprehensive leadership over the construction of a law-based China.

Reforms pertaining to the Party’s leadership and Party-building

• As reforms deepen, conflicts of interest will become more complex and acute, and overcoming difficult challenges become harder. Each step forward requires significant effort. Only by working harder on implementation can various resistances be overcome and entrenched interests be broken.
• Effective reform implementation involves clarifying the implementing bodies and responsibilities of each reform measure. For cross-sector and cross-departmental reforms that a single work unit finds difficult to lead, Party Committees and governments will directly organize the implementation to prevent fragmentation, inefficiency, and lack of coordination (九龍治水).

  Our take

1. The Third Plenum documents suggest that the Xi leadership is at a loss at how to deal with the various challenges and risks facing the CCP regime both domestically and internationally.

The documents also indicate that Beijing plans to continuously centralize power and strengthen the Party’s grip over the country (through propaganda, security forces, etc.) as it prepares for crises to worsen instead of implementing the economic reforms that external observers might hope for.

Some brief takeaways about the documents:
i) The policies in the Decision to “further comprehensively deepen reforms” and “advance Chinese-style modernization” appear to be a compilation of Xi Jinping’s policies in recent years.

The policies do not present fresh and potentially workable measures to address China’s current economic difficulties and reverse the escalation of geopolitical tensions.

ii) The Third Plenum documents stuck to the CCP’s propaganda technique of “spinning tragedy into victory” (喪事當喜事報) by claiming that the Xi leadership engaged in “successful practices” and had “great achievements” when several of Beijing’s major policies in recent years (“zero-COVID,” property sector “three red lines,” etc.) turned out to be governance failures.

The Xi leadership also sought to put old wine in new bottles by elevating the Decision above the “epoch-making” reforms of the Third Plenums of the 11th and 18th Central Committees. For instance, the Decision is billed as a “new historical starting point” and a “scientific summary of the valuable experiences of comprehensively deepening reforms since ‘reform and opening up,’ and especially in the new era.” However, a review of the Decision shows that it is mostly a rehash and refining of the Xi leadership’s policies in recent years.

iii) The Xi leadership doubled down on ideology at the Third Plenum by calling for adherence to Marxism-Leninism and the political theories of CCP leaders, particularly those belonging to Xi Jinping, as well as having an entire section in the Decision dedicated to the Party’s leadership over “further comprehensively deepening reforms” and Party-building reform. This is likely intended to reinforce Xi’s “quan wei” (authority and prestige) and emphasize the Party’s dominance over all aspects of the regime.

It is noteworthy that the Third Plenum communiqué and other documents mention Marxism-Leninism and the political theories of CCP leaders including Xi while the Second Plenum communiqué only emphasizes Xi’s political thought while eschewing the rest. The inclusion of other political theories in the Third Plenum documents could be Xi’s way of compromising with other influential Party elites over his governance failures. This development, when read together with the various that have been circulating since the start of the year, also hints that Xi is facing mounting factional struggle pressure.

The composition of the Decision’s drafting group further underscores what this Third Plenum is about. The deputy heads of the drafting group are either former or current officials in charge of Party-building and propaganda. Meanwhile, PRC premier Li Qiang, who is overall in charge of the national economy, was not even a member of the drafting group. This suggests that economic reform is not the central focus of this Third Plenum.

iv) The Xi leadership’s power centralization and reinforcement of the Party’s leadership are being packaged as so-called “further comprehensive deepening of reforms and advancing Chinese-style modernization.” This comes across clearest in the Third Plenum’s direction for the economy.

For instance, the Third Plenum of the 18th Central Committee said that markets should play a “decisive role” in allocating resources in the economy, but the recently concluded Third Plenum instead 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 looking to enhance government control to prevent and deal with the “disorderly expansion of capital” that took root during the Jiang-Hu era.

The Third Plenum’s call for greater market control is likely intended to prevent capital and financial forces from undermining the CCP’s position of dominance in the regime and ensure that politics always rules over capital. The move is also aligned with the Xi leadership’s increased efforts after the 20th Party Congress to “rectify” the financial system and sector through the anti-corruption campaign and other measures.

v) The Decision contains several policies that are contradictory in nature. For instance, the Decision calls for promoting the “strengthening, optimization, and expansion of state-owned capital and state-owned enterprises,” which implies that policies and funding will be tilted towards the public sector. However, the Decision also advocates for the “equal use of production factors and fair participation in market competition for various ownership economies according to the law,” as well as the drafting and enacting of legislation to promote the private economy.

The Decision also does not explain how it plans to get consumers to increase spending when funding and resources are flowing mainly to producers and infrastructure, or how it plans to drive growth while controlling debt.

vi) Some of the policies in the Decision appear to be aimed at helping the CCP regime better respond to U.S. “containment” (including sanctions, tariffs, and export controls) of the PRC while laying the groundwork for the regime’s future push for global dominance. Concurrently, Beijing is working to stabilize Chinese society in anticipation of intensifying friction with the U.S. and its allies and the further deterioration of the Chinese economy.

Examples include:

• The Decision’s call to build the “unified national market,” develop “new productive forces,” enhance the “resilience and security of industrial and supply chains,” and coordinate and advance “integrated reforms in the education, science and technology, and talent systems” are aimed at boosting domestic demand and improving China’s technological and manufacturing capabilities. Greater self-sufficiency would technically allow the PRC to reduce its reliance on exports and foreign technologies while deepening other countries’ dependence on Chinese products.
• The Decision’s proposal to “consolidate and improve the basic rural management system and deepen land system reform” is similar to the objectives of the rural collective economic organization law (農村集體經濟組織法) that was published in late June 2024. The proposal would allow China’s rural population to transfer land and manage land intensively without the state’s ownership of land being changed while preserving the rights of migrant workers in rural collective economic organizations to mitigate large-scale unemployment in cities when the economic situation worsens. China’s rural population is around 760 million and there are nearly 300 million migrant workers.
• The Decision’s promotion of “reform through opening up” and depiction of Chinese-style modernization as a “path of peaceful development” is an indirect admission by the CCP authorities that the Chinese economy is heavily reliant on exports and it does not wish to escalate tensions with the West with the overcapacity issue. However, the Party’s advocacy of an “equal and orderly multipolar world” hints at its continued desire to subvert and replace the U.S.-led global order.

vii) The Xi leadership’s aim to complete the reform tasks outlined in the Decision by 2029 and fully establish a “high-level socialist market economic system” by 2035 are “pie in the sky” goals (畫大餅) that are partly intended to distract the regime from its current problems and partly an early signal by Xi Jinping that he may seek a fourth term under the pretext of overseeing the reform progress.

The section on Party-building in the Decision calls for “improving and implementing the term system for leading cadres and refining the system for the transfer of responsibilities of the main persons-in-charge of leadership teams.” However, we believe that this is intended to constrain other officials, not Xi.

viii) The Decision’s highlighting of risks in real estate, local government debt, and small and medium-sized financial institutions suggests that the CCP regime faces major challenges in these areas.

Meanwhile, the Decision’s call to “strengthen public discourse guidance and effectively prevent and defuse ideological risks” suggests that the CCP is concerned about “color revolutions” and other social upheaval breaking out as the Chinese economy worsens further.

ix) The Decision’s economic and livelihood reforms are aimed at economic rescue and addressing local government fiscal challenges. However, we believe that these reforms are likely inadequate to the task so long as Beijing insists that the regime adheres to ideology and the “centralized and unified” leadership of Party Central.

For instance:

• The Decision calls for drafting legislation to promote the private economy, but shoring up legal protections and other law-based measures is unlikely to help the private sector much when the PRC state has made clear that it is more tightly regulating capital and finance, as well as keen on redistribution in the pursuit of “common prosperity.” Also, the Xi leadership is facing bureaucratic challenges in advancing its previous measures in support of the private economy while the measures that have been enacted do not appear to be effective.
• The Decision’s call to “correct the use of administrative and criminal means to intervene in economic disputes” suggests that the Xi leadership is looking to address bureaucratic malpractice (such as “debt criminalization” and the collection of retroactive taxes) and other issues affecting the private economy. However, the Xi leadership is unlikely to make much headway in addressing such issues as long as the CCP authoritarian system and Party culture remain intact.
• The Decision’s proposal to improve the fiscal relationship between the central and local governments, as well as expansion of the scope of local governments’ use of capital raised from the sale of local bonds and relaxation of non-tax revenue management, are unlikely to alleviate the financial difficulties of local governments with the CCP authoritarian system and Party culture being the overriding “algorithm” that officials run on. Local officials will be inclined to divert funds to projects that benefit their interests and pad their political achievements instead of channeling funds to where they are crucially needed. Also, local officials at all levels would look to push their financial responsibilities downward to lower-level officials and absolve themselves of blame for financial troubles at their level. Further, local governments now have greater ability due to the Decision to exploit businesses and the public, further deteriorating the business environment and increasing social conflicts. Put another way, problems of an institutional nature and which concern the fundamental political culture cannot be resolved by working within the system through the issuance of new orders from on high.
• The Decision’s proposals to explore the establishment of a unified national population management system and implement a system of providing basic public services based on permanent household registration are an attempt by Beijing to partially relax the restrictions of the household registration system and allow migrant workers especially to have better access to social welfare. However, whether local governments can afford to provide basic public services is highly questionable given the ubiquitous fiscal strains. Poor fiscal situations could see local governments resort to various fraudulent means to provide basic public services, or deceive the central government that services are being provided. Meanwhile, the partial relaxation of the household registration system does not equate to the CCP relaxing its control over society; the Party will increasingly rely on new surveillance technologies to take up the control functions that household registration used to provide.
• The Decision’s call to establish an interprovincial horizontal benefit compensation mechanism between grain-producing and grain-consuming regions does not seem much different from the central transfer payment mechanism that is already in place. Instead of funds being transferred from the central government downward, Beijing is looking to facilitate inter-provincial transfer payments.
• The Decision defines “financial investors” as “financial consumers” when discussing the improvement of “financial consumer protection.” This suggests that the CCP views investing in China’s financial sector as being no different from the purchase of goods and services for current utility rather than expenditure on equities and bonds to make money. The CCP’s “improvement” of “financial consumer protection” implies that financial investing in China will become even more of a money-losing endeavor going forward.

x) The Third Plenum’s call for adherence to ideology and Party leadership, as well as the distinct lack of tangible reform announcements, affirm our observation (see here, here, here, and here) that the CCP has no good solutions to deal with China’s economic crisis beyond tightening control over society and managing the decline.

The lackluster proposals and measures in the Decision are likely to further undermine domestic and foreign confidence in the CCP authorities’ ability to facilitate China’s economic recovery. This could lead to greater capital outflows from China and declining foreign investment as businesses, investors, and governments take an increasingly dim view of China’s growth prospects under strengthening authoritarian rule in the country.

2. The Third Plenum saw several noteworthy personnel adjustments:

i) Party Central’s acceptance of Qin Gang’s resignation and his retaining the title of “comrade” suggests that he received a “soft landing” despite being purged. Beijing’s handling of Qin’s case further hints that he may eventually be found guilty of personal misconduct and not serious corruption. We believe that it is possible that Qin could even get off more lightly than former securities regulator Liu Shiyu.

In analyzing Qin Gang’s resignation, we noted:

• There is a good chance that Qin is not guilty of serious wrongdoing.
• Qin’s fate debunks questionable political rumors circulating about him, including reports that he had died in custody or that his case is connected with corruption in the PLA.
• Qin being purged could be an effort by “Xi Jinping’s remaining factional rivals and the ‘anti-Xi coalition,’ including elements opposed to Xi in the military or the CCP intelligence apparatus’s ‘hidden front’ (see here and here), to exploit the Xi leadership’s prioritization of national security matters to ‘manipulate’ the PRC leader into taking out his own allies and ultimately undermining his own interests.”

ii) The official announcement of corruption charges against former PLARF chief of staff Sun Jinming and the non-elevation of a military Central Committee alternate member affirm our earlier observations about serious problems in the PLA.

Typically, alternate members of the Central Committee are elevated to full members to replace those who have been removed based on the number of votes they receive. However, lieutenant general Ding Xingnong (deputy political commissar of the PLARF), the alternate member who received the second-highest number of votes by Central Committee members at the First Plenum of the 20th Central Committee, was not elevated to a full member. Although age could be a factor (Ding is currently 61 and will be over the retirement age of 63 for officers of his rank by the next Party Congress in 2027), it is more likely that Party Central is at least temporarily halting the elevation of military officers to higher political positions amid ongoing anti-corruption investigations into the PLA.

iii) New defense minister Dong Jun was not appointed as a member of the Central Military Commission at the Third Plenum, an unusual development.

One possibility why Dong did not join the CMC is the “downgrading” of the State Council in Xi’s third term to an “administrative office” of the Xi leadership and Party Central. As the PRC minister of defense falls under the jurisdiction of the State Council and not the Party apparatus, it could mean that Dong and future defense ministers will no longer join the CMC or be appointed as a State Councilor given the reduced position of the state government.

3. Qin Gang’s “soft landing” aside, the outcome of the Third Plenum also debunks two other political rumors that have gained traction recently.

First, state broadcaster CCTV’s footage of Xi Jinping participating in discussions and speaking at the Third Plenum reveals him to be relatively healthy and not suffering from a stroke as rumored. CCTV also released footage on July 20 of Xi visiting the Vietnam embassy in China to mourn the death of Vietnam Communist Party leader Nguyen Phu Trong. We previously assessed in analyzing publicly available information that it is highly unlikely that Xi had a stroke. Some observers have cast doubt on CCTV’s footage and photos of Xi at the Third Plenum, but we believe that questions about Xi’s health are likely to be cleared up with his visit to the Vietnam embassy and when he embarks on the usual post-plenum inspection tours in the localities.

Second, Xi’s wife Peng Liyuan was not elevated to the Politburo or other special positions in the CCP elite at the Third Plenum. We previously analyzed that there was a very low probability of Xi promoting his wife because he appears to be largely observing the Party’s personnel reshuffle norms. We further observed that “anti-Xi” forces could be behind the rumors of Peng gaining political power as they deploy “advanced blackening” techniques against Xi Jinping.