Highlights of The Communiqué script explained HERE: a 16-minute read.
PROLOGUE
The Third Plenums are the third meeting of the Communist Party of China (CPC) five-year governing cycles, covering economic policy where discussion outcomes are scrutinized by political cadres and global businesses with the issuance of The Communiquè which outlines a comprehensive geoeconomic strategy.
Some preliminary notes on the communiquè of The Third Plenum from the 20th central committee, the Communist Party of China (CPC), Beijing July 15-18 :
1] Absent was the term “common prosperity” that used to be part of Xi's China Dream overall goal which implies growth that is better shared. The communiqué instead focuses on a rather modest ambitions of "ensuring and enhancing the people’s wellbeing in the course of development is one of the major tasks of Chinese modernization.”
Implied are the improvement of public services, social security, income distribution, and population services while “striving to do everything within our capacity in this regard.”
2] The communiqué’s also acknowledging situational headwinds to the economy, and assurance that “we must remain firmly committed to accomplishing the goals for this year’s economic and social development.”
This would imply that the government will act, if growth threatens to fall short of the “about 5 percent” target for this year.
3] The communiqué further announced measures to improve “macroeconomic governance,” including fiscal reforms.
In the post-plenum press conference, Han Wenxiu suggested that major reforms in the fiscal system, including changes in the intergovernmental fiscal system to bring relief to cash-strapped local governments.
Fiscal policy is key for macroeconomic management in today’s China, with monetary policy constrained by over-indebted local governments, reluctant private borrowers and an exchange rate policy that leaves little space for more monetary easing.
Indeed, to attain effectiveness, major reforms in the tax system, intergovernmental fiscal system, and budget management are needed, and Han Wenxiu’s words keep the door open for these policies (and directives) to be announced later.
4] The vision of deepening reform and pursuing modernization — with Chinese characteristics — shall be based on the three key pillars of innovation, green energy, and consumption as growth drivers:
A) Innovation, according to the communiqué, will be driven by further development in education, science and technology, as well as talent cultivation with the country adopting, refining, and rolling out existing technologies.
B) China’s green energy sector has contributed much progress in the manufacturing of electric vehicles (EVs), batteries, and solar and wind energy products. China has achieved global dominance in the supply chains of these products which have expanded its market domination and indirectly, her economic performance shall be enhanced with these technological-based entities.
C) Promoting consumption shall be implemented through the “Chinese way”: strengthening social safety nets, such as insurance schemes and public provisions for unemployment, healthcare and retirement needs of an aging society.
5] At the post-plenum press conference, Tang Fangyu, deputy head of the CPC Central Committee Policy Research Office, said that the adoption of a reform resolution is the most important outcome of the third plenary session of the 20th Communist Party of China (CPC) Central Committee.
Indeed, he promised that The Decisions would include more than 300 reforms divided in 15 sections, putting the 2024 plenum at par with the 3rd plenum of the 18th central committee.
6] Whereas in previous plenums reforms were predominantly aimed at facilitating marketisation and liberalization of China’s economy, they are now meant to strengthen the policies and institutions that underpin Xi Jinping’s view of the world.
7] The forthcoming Decisions of the third plenum will spell out in more detail what that means for China’s economic governance.
A) These Decisions are available here (in Chinese).
B) The FULL TEXT (in English) Communiqué of 3rd plenum of 20th. CPC Central Committee.
C) The STORM's Collective on Geoeconomics (COG) FULL TEXT explanatory script on China’s Third Plenum 2024 Communiqué is HERE: a 16-minute read with these subsections:
Main Takeways
Reform Resolutions
Reflections
Epilogue
with graphics, intexted citations and references
