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China’s leaders, at a top Communist Party meeting, warned of “risks” in areas including the country’s sluggish property market, government debt and financial institutions, and called for stronger social controls to ensure stability.
As it concluded its Third Plenary Session, one of the most important sessions for setting out medium- to long-term policies, the Party Central Committee warned of geopolitical risks, prioritized security as economic growth and said China should “take the lead in global governance.”
“It is necessary to coordinate development and security, and implement various measures to prevent and resolve risks in key areas such as real estate, local government debt and small and medium-sized financial institutions,” the policymakers wrote in a statement from the meeting.
They added that China must “build a tight-knit social security risk prevention and management network and effectively maintain social stability” and strengthen state propaganda. “It is necessary to strengthen the guidance of public opinion and effectively prevent and resolve ideological risks,” they wrote.
The statement from the long-awaited meeting, convened by President Xi Jinping to bring together 363 members and alternates of the Communist Party’s elite Central Committee, is seen as a general summary of the meeting. More details on the reforms are likely to be released in a separate document in the coming days.
China’s economy is struggling to pull out of a slump in the property market and restore investor confidence after a crackdown on the private sector. President Xi’s economic vision places an emphasis on high-tech manufacturing over domestic consumption, which analysts say is crucial for a full recovery.
The Third Plenary Session statement encouraged the development of market mechanisms but made no mention of consumer demand.
“We need to make better use of the role of market mechanisms to create a fairer and more dynamic market environment.” [and] The statement said it would “optimize the efficiency of resource allocation” and promised to “better safeguard market order” and “correct market failures.”
The statement did not specify the leading role played by state-owned enterprises in many sectors, which economists say are crowding out private companies.
“It is essential to ensure that different ownership economies have equal access to factors of production,” it said.
The statement also promised deeper fiscal and tax reform but gave no details, as analysts say there needs to be a better balance between central and local government finances.
“The General Assembly restated the government’s economic goals and acknowledged some major risks, but did little to inspire confidence that the government has a strategy to effectively manage the economy’s cyclical and structural problems,” said Eswar Prasad, a professor at Cornell University and senior fellow at the Brookings Institution.
Bert Hoffman, the World Bank’s former Beijing-based China director, wrote in X that a notable difference between this statement and the previous landmark Third Plenary in 2012 was the reference to markets.
The goal in 2012 was to give markets a “decisive role.” “This time around, at least in terms of the statements, there’s less enforcement,” he said.
On foreign affairs, the statement stressed that Xi is pursuing a multipolar world, which means a reduced role for the United States. “China’s modernization… is a path of peaceful development,” it said, adding that it was necessary to “insist on a world with multiple poles.”
The communique stressed China’s ambition to become a “modern socialist power” by the middle of this century, but did not provide a detailed definition.
The party also formally accepted the “resignation” of former foreign minister Qin Gang from the Central Committee after he disappeared without explanation last year and was replaced by his predecessor, Wang Yi.
The statement said the Central Committee also confirmed its decision to expel from the party former defence minister Li Shangfu and the PLA rocket force chiefs Li Yuchao and Sun Jinming for “serious violations”. China’s Central Military Commission, chaired by Xi, announced an anti-corruption investigation into equipment procurement last year.
In December, Li was replaced by former naval commander Admiral Dong Jun.
Additional reporting by Nian Liu, Tina Hu and Wenjie Ding in Beijing and Cheng Leng in Hong Kong
