In December 2012, Xi Jinping, the newly elected General Secretary of the Central Committee of the Communist Party of China, made his first inspection trip to Guangdong province, one of the places where the country’s reform and opening-up policies began. This visit is considered an important milestone in understanding China’s domestic and international policy orientations under Xi’s leadership.[1] In his speech during his visit to Guangdong, Xi emphasized that reform and opening-up policies are the right path for China and that the country should move forward on this path with determination. This statement demonstrated Xi’s commitment to economic reforms and global integration.
Reform and opening-up policies were initiated by Deng Shiaoping in 1978 and have been a cornerstone of China’s economic growth. Xi argued that these policies should be continued and ordered a mobilization to deepen economic reforms. Under Xi’s leadership, China’s economic reforms have accelerated. In particular, important steps have been taken in the fight against corruption, the restructuring of state-owned companies and the development of a free market economy. Xi’s reform policies are designed to ensure the sustainability of economic growth and avoid the middle-income trap. They also aim to expand China’s domestic market and support innovative industries.
2024 is a critical year for deepening Xi’s reform policies. Xi plans to lead a new era of reform with the support of 1.4 billion Chinese citizens. During this period, significant reforms are expected in areas such as technological innovations, environmentally friendly policies and increasing social welfare. These reforms will further consolidate China’s economic and political power and strengthen its role in international affairs.[2]
The Communist Party of China has decided to hold its long-delayed third plenary session between July 15-18, 2024.[3] The third plenary session, which began on Monday, July 15, 2024, comes at a time when China is facing a real estate crisis, high youth unemployment, declining business and consumer confidence, and rising local government debt. Chinese Premier Li Qiang has hinted that big steps should not be expected from the plenary session.[4]
China’s Third Plenary Session and the New Economic Model: The Third Plenary Session of the Central Committee of the Communist Party of China represents a significant change in China’s economic growth model. The third plenary is an important meeting that usually introduces major policy initiatives for the next five to ten years. Like the 1978 reforms initiated by Deng Shiaoping, this meeting has had a profound impact on China’s economic strategy. The third meeting shifted China’s growth paradigm from achieving a nominal growth rate to building an innovative and resilient economy. It discussed two main policy changes: channeling economic resources into strategic and innovative sectors and providing minimum social welfare to the poor. These policies show that China is moving towards a more centralized and innovation-driven economic management.[5]
The first slogan highlighted at the meeting was “new quality productive power”. This vision aims for the Chinese economy to play a leading role in the innovation of new technologies. From now on, the ultimate goal is to make China an innovation champion by producing precision technology and scaling up to high-quality production. The introduction of this term marks a major shift in the party leadership’s economic management. Beijing’s economic and industrial policies are focused on advancing existing technologies and achieving self-sufficiency to withstand the strategic encirclement of the United States (US).[6]
The second new term is the “new national system”. This refers to the distribution of national resources with stronger centralized control, allocating capital to sectors of strategic importance. The main emphasis here is on geopolitics rather than economics. China’s deteriorating relations with the collective West have already limited its access to future market and technology innovation. The “national system” is Beijing’s recipe for acquiring technologies by pooling all available national resources to support homegrown technology breakthroughs. The term reaffirms a clear distinction between the current party leadership’s model of economic management and the more open market-oriented periods of reform and opening-up of the last 45 years.
These two new terms represent another step under President Xi, focusing on innovation breakthroughs and further consolidating centralized economic governance. While the third plenum does not usually tend to introduce major reforms, it does tend to expand existing policies and implement reform directives that party leaders have previously outlined. Given all these factors, it is unlikely that Xi will fundamentally change course at the Third Plenary Session.
In conclusion, under Xi Jinping’s leadership, China’s economic and political strategies are undergoing a major transformation. The Third Plenary Session represents a critical stage in this transformation. By focusing on innovative technologies and directing resources to strategic sectors, China aims to strengthen its domestic market and become more independent and powerful in the global arena. These strategies will enhance China’s economic sustainability and enable it to play a more influential role in international relations.
In the coming years, China’s new economic model and reform policies will shape the country’s internal and external dynamics and reinforce its position as an important actor in the future global balance of power. China’s success in this process will depend on its performance in innovation, technological progress and strategic planning. Xi’s vision and the decisive steps taken to uphold Deng’s legacy have the potential to make China a leading power in the modern world order.
[1] “Xi Jinping leads China’s reform and opening up in new era”, CGTN News, https://news.cgtn.com/news/2024-07-11/Xi-Jinping-leads-China-s-reform-and-opening-up-in-new-era-1v9PgAvbf0I/p.html, (Date of Access: 12.07.2024).
[2] “China’s third plenum marks a sea change in growth model”, Chatham House, https://www.chathamhouse.org/2024/07/chinas-third-plenum-marks-sea-change-growth-model, (Date of Access: 12.07.2024).
[3] “China plenum to deliver policy agenda hindered by conflicting goals”, Reuters, https://www.reuters.com/world/china/china-plenum-deliver-policy-agenda-hindered-by-conflicting-goals-2024-07-11/, (Date of Access: 12.07.2024).
[4] “What to watch for during China’s Third Plenum”, VOA, https://www.voanews.com/a/what-to-watch-for-during-china-s-third-plenum/7700950.html, (Date of Access: 17.07.2024).
[5] Ibid.
[6] “Politics First: The Key to Understanding China’s Third Plenum”, Asia Society, https://asiasociety.org/policy-institute/politics-first-key-understanding-chinas-third-plenum, (Date of Access: 12.07.2024).
