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At a Communist Party summit meeting, Chinese leaders warned of “risks” in areas such as the declining real estate market, public debt and financial institutions, and called for tighter social controls to ensure stability.
The party’s Central Committee gave security equal importance to economic growth and warned of geopolitical risks, saying China should “lead global governance” as it wrapped up the third plenum, one of its most important meetings, where it sets medium- and long-term policies.
“It is necessary to coordinate development and security, 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,” policymakers wrote in a statement from the meeting.
They added that China should “weave a dense network of prevention and control of social security risks and effectively maintain social stability” and step up state propaganda. “It is necessary to strengthen the guidance of public opinion and effectively prevent and resolve ideological risks,” they wrote.
The communiqué from the long-awaited conclave, which brought together the 363 members and alternates of the Communist Party Central Committee, led by President Xi Jinping, is considered a general summary of the meeting. More details on possible reforms could be released in the coming days in a separate document.
China’s economy is struggling to emerge from a real estate slowdown and restore investor confidence after crackdowns on the private sector. Xi Jinping’s vision for the economy has focused on high-tech manufacturing rather than domestic consumption, which analysts say is key to a full recovery.
Although the Third Plenum statement encouraged the development of market mechanisms, it made no reference to consumer demand.
“It is necessary to better exploit the role of market mechanisms, create a fairer and more dynamic market environment (and) optimize the efficiency of resource allocation,” the statement said, while pledging to “better preserve market order” and “address market failures.”
The statement does not specify any reduction in the dominant role of state-owned enterprises in many sectors, which economists say are crowding out their private-sector counterparts.
“It is essential to ensure…that different property economies have equal access to the factors of production,” the statement said.
The statement also promised to deepen reforms of the tax and taxation system, but gave no details. Analysts say a better balance is needed between central government and local government finances.
“The plenum rearticulated the government’s economic goals and acknowledged some key risks, but it inspires little 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 a senior fellow at Brookings.
Bert Hofman, the former World Bank China director based in Beijing, wrote on X that a striking difference between this communiqué and the historic third plenum in 2012 was the reference to markets.
In 2012, the goal was to give the market a “decisive role.” “This time, at least in the statement, it is less forceful,” he said.
On foreign affairs, the statement emphasizes Xi Jinping’s desire to create a multipolar world, which means the United States should play a smaller role. “China’s modernization is a path of peaceful development,” the statement said, adding that it is necessary to “advocate for a world with diverse poles.”
The statement underscores China’s ambition to become a “modern socialist power” by mid-century, without providing a detailed definition.
The Party also officially accepted the “resignation” of former Foreign Minister Qin Gang from the Central Committee. Qin Gang disappeared without explanation last year and was replaced by his predecessor, Wang Yi.
The Central Committee also upheld the decision to expel former Defense Minister Li Shangfu and People’s Liberation Army Rocket Forces officers Li Yuchao and Sun Jinming from the party for “serious violations.” China’s Central Military Commission, also chaired by Xi Jinping, announced an anti-corruption investigation into equipment purchases last year.
Li was replaced by Dong Jun, a former navy chief, in December.
Additional reporting by Nian Liu, Tina Hu and Wenjie Ding in Beijing and Cheng Leng in Hong Kong
News Source : www.ft.com
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