Breaking Down the Third Plenum Communique
The communique of the third plenum was published a few hours ago. Xinhua has shared the official English version too. The full Decision document, however, is not yet out. That should perhaps have more details. But let me offer some initial thoughts before I get to a breakdown of the communique.
First, it doesn’t seem to say anything particularly unique or surprising, at least from where I am reading it. It essentially looks like a strong endorsement of the policy direction that China has been on, and Xi Jinping’s leadership. For instance, it tells us that the Central Committee offered a “highly positive assessment of the success and achievements” of reform work since the new era.
Second, the communique argues that in the pursuit of high-quality development, “institution building” is the “main task” for the next five years. This was the theme of a lot of the propaganda leading into the plenum. What sort of institutional changes we are likely to see is still something that I am not clear about.
Third, this is an interesting sentence: “We will lift restrictions on the market while ensuring effective regulation (or do both ‘let it go to live’ and ‘maintain control/keep in check’ – 既“放得活”又“管得住”), striving to better maintain order in the market and remedy market failures.” An optimistic reading of this is that there is an implicit acknowledgement that tightening political control and regulation has hurt the market. But I would not want to jump to that conclusion before there are any regulatory changes to this effect.
Fourth, this is also useful to note: “We must deepen supply-side structural reform, improve incentive and constraint mechanisms for promoting high-quality development, and strive to create new growth drivers and strengths. We will improve the institutions and mechanisms for fostering new quality productive forces in line with local conditions, for promoting full integration between the real economy and the digital economy, for developing the service sector, for modernizing infrastructure, and for enhancing the resilience and security of industrial and supply chains.” This agenda indicates policy continuity. The bit about incentive and constraint mechanisms, to me, indicate continued, deep Party-state intervention in the market.
Fifth, common prosperity finds a mention in the communique in the context of promoting “equal exchanges and two-way flows of production factors between the cities and the countryside, so as to narrow the disparities between the two…”
Sixth, on opening up, one of the things that the document mentions is to “deepen the foreign trade structural reform.” I presume this refers to the trade basket and diversification of markets.
Seventh, there is a reference to strengthening the rule of law in foreign-related affairs, and to ensure that high-quality development and greater security reinforce each other, so as to effectively safeguard the country’s stability and security over the long term. It also talks about improving “the national security system, the public security governance mechanisms, the social governance system, and the mechanisms for ensuring national security in foreign-related affairs.” This is also indicative of continuity in policy direction.
Eighth, on the PLA, it says “we will improve the systems and mechanisms for leading and managing the people’s armed forces, further reform joint operations systems, and deepen military-civilian reforms”. I presume this is indicative of potential structural changes in operational systems. But then, this is not an area that I follow terribly closely.
Ninth, another noteworthy line is this: “We will deepen institutional reforms related to the work of foreign affairs…” I am not sure what this implies in terms of tangible actions. In general, there is a reaffirmation of the direction of foreign policy.
Tenth, economic work policy priorities are broadly identified as: “ensure effective implementation of macro policies, strive to expand domestic demand, develop new quality productive forces in light of local conditions, move faster to foster new drivers of foreign trade, take solid steps toward green and low-carbon development, ensure and improve the people’s wellbeing, and consolidate and build upon our achievements in poverty alleviation.”
Finally, there is nothing specific in the communique on the risks related to real estate, local government debt, and small and medium financial institutions. These are just mentioned as risks.
Some other key developments:
Qin Gang’s resignation was accepted and he exited the Central Committee
The Central Military Commission’s inspection report on “grave violations of Party discipline and state laws involving Li Shangfu, Li Yuchao, and Sun Jinming was deliberated and adopted”. Their expulsion was confirmed. No mention of Wei Fenghe, however.
The document says that 199 full members of the Central Committee and 165 alternate members were in attendance. Xi Jinping chaired the plenum. He delivered a report on the work of the Politburo and provided an explanation regarding the draft decision document.
“At the session, the Central Committee fully affirmed the work of the Political Bureau since the second plenary session of the 20th Central Committee. It was unanimously agreed that in the face of a grave and complex international environment and the arduous tasks of advancing reform and development and ensuring stability at home, the Political Bureau has secured progress in the following respects:
earnestly implementing the guiding principles from the 20th National Party Congress and the first and second plenary sessions of the 20th Central Committee;
fully and faithfully applying the new development philosophy on all fronts;
adhering to the general principle of pursuing progress while ensuring stability;
implementing the Five-Sphere Integrated Plan and the Four-Pronged Comprehensive Strategy in a coordinated way;
giving full consideration to both domestic and international imperatives;
ensuring both development and security;
promoting high-quality development;
taking further steps to advance and plan for the deepening of reform across the board;
advancing socialist democracy and rule of law;
improving public communication and cultural work;
ensuring the people's wellbeing and protecting the environment;
safeguarding national security and social stability;
promoting the development of national defense and the armed forces;
advancing work related to Hong Kong, Macao, and Taiwan;
pursuing major-country diplomacy with Chinese characteristics; and
strengthening full and rigorous Party self-governance.
As a result of these efforts, we have achieved economic recovery and growth and have made firm strides in building a modern socialist country in all respects.”
At the session, the Central Committee gave a highly positive assessment of the success and achievements we have made in comprehensively deepening reform since the beginning of the new era and studied the issue of further deepening reform comprehensively to advance Chinese modernization. It was stated that the present and the near future constitute a critical period for our endeavor to build a great country and move toward national rejuvenation on all fronts through Chinese modernization. Chinese modernization has been advanced continuously through reform and opening up, and it will surely embrace broader horizons through further reform and opening up. We must purposefully give more prominence to reform and further deepen reform comprehensively with a view to advancing Chinese modernization in order to better deal with the complex developments both at home and abroad, adapt to the new round of scientific and technological revolution and industrial transformation, and live up to the new expectations of our people.”
The next paragraph mentions all the ideological contributions by past leaders of the Party. It then adds:
“We must thoroughly study and implement General Secretary Xi Jinping's new ideas, viewpoints, and conclusions on comprehensively deepening reform and fully and faithfully apply the new development philosophy on all fronts. We must adhere to the general principle of pursuing progress while ensuring stability and continue to free our minds, seek truth from facts, move with the times, and take a realistic and pragmatic approach, as we work to further unleash and develop the productive forces and tap into and boost the vitality of our society. Keeping in mind both domestic and international imperatives, we will ensure coordinated implementation of the Five-Sphere Integrated Plan and the Four-Pronged Comprehensive Strategy. Regarding economic structural reform as the spearhead and greater social fairness and justice and improvements in the people's wellbeing as our ultimate objectives, we will make our reforms more integrated, focused, and effective. We will work to better adapt the relations of production to the productive forces, the superstructure to the economic base, and national governance to social development, so as to provide strong impetus and institutional support for Chinese modernization.”
The next paragraph says that “the overall objectives of further deepening reform comprehensively are to continue improving and developing the system of socialism with Chinese characteristics and modernize China's system and capacity for governance.” It adds that: “To steadily advance reform, we will focus on building a high-standard socialist market economy, advancing whole-process people’s democracy, developing a strong socialist culture in China, raising the people’s quality of life, building a Beautiful China, advancing the Peaceful China Initiative to a higher level, and improving the Party's capacity for leadership and long-term governance. The reform tasks laid out in this resolution shall be completed by the time the People's Republic of China celebrates its 80th anniversary in 2029.”
The document then states that “We must implement the principles of upholding the Party’s overall leadership, taking a people-centered approach, upholding fundamental principles and breaking new ground, taking institution building as our main task, exercising law-based governance on all fronts, and applying systems thinking.”
From here, the document deals with the specific decisions that have been adopted at the session. It says that:
The plans outlined for further comprehensively deepening reform were focussed on:
building a high-standard socialist market economy
promoting high-quality economic development
supporting all-around innovation
improving macroeconomic governance
promoting integrated urban-rural development
pursuing high-standard opening up
advancing whole-process people’s democracy
promoting socialist rule of law with Chinese characteristics
deepening reform in the cultural sector
ensuring and improving the people’s wellbeing
deepening reform in ecological conservation
modernizing China’s national security system and capacity
deepening national defense and military reform, and
improving the Party’s leadership in further deepening reform comprehensively to advance Chinese modernization.
The rest of the document has a paragraph on each of these.
On building a high-standard socialist market economy: “We must better leverage the role of the market, foster a fairer and more dynamic market environment, and make resource allocation as efficient and productive as possible. We will lift restrictions on the market while ensuring effective regulation (or do both ‘let it go to live’ and ‘maintain control/keep in check’ – 既“放得活”又“管得住”), striving to better maintain order in the market and remedy market failures. By doing so, we will ensure smooth flows in the national economy and unleash the internal driving forces and creativity of our society as a whole. We will unswervingly consolidate and develop the public sector and unswervingly encourage, support, and guide the development of the non-public sector. We will ensure that economic entities under all forms of ownership have equal access to factors of production in accordance with the law, compete in the market on an equal footing, and are protected by the law as equals, thus enabling entities under different forms of ownership to complement each other and develop side by side. We will build a unified national market and refine the systems underpinning the market economy.”
On promoting high-quality economic development: “It was stated that high-quality development is our primary task in building China into a modern socialist country in all respects. It is essential that we use the new development philosophy to steer reform and ground our efforts in the new stage of development. We must deepen supply-side structural reform, improve incentive and constraint mechanisms for promoting high-quality development, and strive to create new growth drivers and strengths. We will improve the institutions and mechanisms for fostering new quality productive forces in line with local conditions, for promoting full integration between the real economy and the digital economy, for developing the service sector, for modernizing infrastructure, and for enhancing the resilience and security of industrial and supply chains.”
On supporting all-around innovation: “It was stated that education, science and technology, and talent function as a basic and strategic underpinning for Chinese modernization. We must fully implement the strategy of invigorating China through science and education, the strategy of developing a quality workforce, and the innovation-driven development strategy, make coordinated efforts to promote integrated reform of institutions and mechanisms pertaining to education, science and technology, and human resources, and improve the new system for mobilizing resources nationwide to make key technological breakthroughs. These efforts will help boost the overall performance of China’s innovation system. We will deepen comprehensive reform in education, deepen structural scientific and technological reform, and deepen institutional reforms for talent development.”
On improving macroeconomic governance: “It was stated that sound macro regulation, along with effective governance by the government, is essential for ensuring that we can fully harness the institutional strengths of our socialist market economy. It is, therefore, vital that we improve our macro regulation systems. We must pursue coordinated reforms in the fiscal, tax, financial, and other major sectors and work to enhance the consistency of macro policy orientation. We will improve the national strategic planning system and policy coordination mechanisms, deepen reform of the fiscal and taxation systems, further reform the financial system, and improve mechanisms for implementing the coordinated regional development strategy.”
On promoting integrated urban-rural development: “It was stated that integrated urban and rural development is essential to Chinese modernization. We must coordinate our efforts in new industrialization, new urbanization, and all-around rural revitalization, pursue greater urban-rural integration in planning, development, and governance, and promote equal exchanges and two-way flows of production factors between the cities and the countryside, so as to narrow the disparities between the two and promote their common prosperity and development. We will improve the institutions and mechanisms for advancing new urbanization, consolidate and improve the basic rural operation system, improve supporting systems to strengthen agriculture, benefit farmers, and enrich rural areas, and deepen reform of the land system.”
On pursuing high-standard opening up: “It was stated that opening up is a defining feature of Chinese modernization. We must remain committed to the basic state policy of opening to the outside world and continue to promote reform through opening up. Leveraging the strengths of China’s enormous market, we will enhance our capacity for opening up while expanding cooperation with other countries and develop new institutions for a higher-standard open economy. We will steadily expand institutional opening up, deepen the foreign trade structural reform, further reform the management systems for inward and outward investment, improve planning for regional opening up, and refine the mechanisms for high-quality cooperation under the Belt and Road Initiative.”
On advancing whole-process people’s democracy: “We must firmly stay on the path of socialist political advancement with Chinese characteristics and uphold and improve our country's foundational, basic, and important political systems.”
On promoting socialist rule of law with Chinese characteristics: “We must ensure full implementation of the Constitution and uphold its authority, coordinate the reforms to promote sound legislation, law enforcement, administration of justice, and observance of the law, and improve the mechanisms for ensuring that all are equal before the law, so as to promote socialist rule of law, safeguard social fairness and justice, and see that all work of the state is carried out under the rule of law. We will deepen reforms in legislation, advance law-based government administration, improve the institutions and mechanisms for impartial law enforcement and administration of justice, refine the mechanisms for building a law-based society, and strengthen the rule of law in foreign-related affairs.”
On deepening reform in the cultural sector: “We must boost our cultural confidence and work to develop advanced socialist culture, promote revolutionary culture, and carry forward fine traditional Chinese culture. We must stay abreast of the latest trends in information technology, cultivate a vast pool of talented personnel in the field of culture, and ignite the cultural creativity of the entire nation. We will improve the responsibility system for ideological work, refine the mechanisms for supplying cultural products and services, improve the system for comprehensive cyberspace governance, and establish a more effective international communication system.”
On ensuring and improving the people’s wellbeing: It was stated that ensuring and enhancing the people's wellbeing in the course of development is one of the major tasks of Chinese modernization. Striving to do everything within our capacity in this regard, we must refine the system for guaranteeing basic public services, work to provide inclusive public services, meet essential needs, and provide a cushion for those most in need, and focus on resolving the most practical problems that are of the greatest and most direct concern to the people, so as to meet people’s aspirations for a better life. We will improve the income distribution system, the employment-first policy, and the social security system, further reform the medical and healthcare systems, and improve the systems for facilitating population development and providing related services.”
On deepening reform in ecological conservation: “We must improve ecological conservation systems, make concerted efforts to cut carbon emissions, reduce pollution, pursue green development, and boost economic growth, actively respond to climate change, and move faster to improve the systems and mechanisms for applying the principle that lucid waters and lush mountains are invaluable assets. We will improve the basic systems for ecological conservation, environmental governance systems, and mechanisms for green and low-carbon development.”
On modernizing China’s national security system and capacity: “It was stated that national security provides a pivotal foundation for ensuring steady and continued progress in Chinese modernization. We must fully apply a holistic approach to national security, improve the institutions and mechanisms for safeguarding national security, and ensure that high-quality development and greater security reinforce each other, so as to effectively safeguard the country’s stability and security over the long term. We will improve the national security system, the public security governance mechanisms, the social governance system, and the mechanisms for ensuring national security in foreign-related affairs.”
On deepening national defense and military reform: “It was stated that modernizing national defense and the armed forces is an integral part of Chinese modernization. We must maintain the Party’s absolute leadership over the people’s armed forces and fully implement the strategy of strengthening the military through reform to provide a strong guarantee for realizing the centenary goal of the People’s Liberation Army in 2027 and achieving basic modernization of national defense and the armed forces. We will improve the systems and mechanisms for leading and managing the people’s armed forces, further reform joint operations systems, and deepen military-civilian reforms.”
On improving the Party’s leadership: “We must acquire a deep understanding of the decisive significance of establishing Comrade Xi Jinping’s core position on the Party Central Committee and in the Party as a whole and establishing the guiding role of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era (ie., the Two Establishments); be more conscious of the need to maintain political integrity, think in big-picture terms, follow the leadership core, and keep in alignment with the central Party leadership (i.e., four consciousness); stay confident in the path, theory, system, and culture of socialism with Chinese characteristics (i.e., four self-confidences); and uphold Comrade Xi Jinping’s core position on the Party Central Committee and in the Party as a whole and uphold the Central Committee’s authority and its centralized, unified leadership (i.e., two safeguards/upholds). We must maintain keen awareness of the need to use the Party’s own transformation to steer social transformation and continue to apply the spirit of reform and strict standards in conducting Party self-governance (i.e., use Party’s self-revolution to further social revolution). We will improve the systems and regulations for the Partys self-reform (self-revolution) and continue working to purify, improve, renew, and excel ourselves. All this will enable our Party to remain the strong leadership core in building socialism with Chinese characteristics. We must uphold the Party Central Committee’s centralized, unified leadership over the endeavor to further deepen reform across the board; deepen institutional reforms related to Party building; intensify efforts to improve conduct, build integrity, and combat corruption; and work with relentless persistence to ensure the implementation of reforms.”
The document then talks about China’s “peaceful development.” It says that:
“In foreign relations, China remains firmly committed to pursuing an independent foreign policy of peace and is dedicated to promoting a human community with a shared future. Holding dear humanity’s shared values, we will pursue the Global Development Initiative, the Global Security Initiative, and the Global Civilization Initiative and call for an equal and orderly multipolar world and universally beneficial and inclusive economic globalization. We will deepen institutional reforms related to the work of foreign affairs and participate in efforts to lead the reform and development of the global governance system. We will resolutely safeguard China’s sovereignty, security, and development interests.”
“It was stated that studying and implementing the guiding principles from the session represent a major political task for the entire Party and nation both at the present and for some time to come. It is essential to thoroughly study the guiding principles from the session and fully grasp the main theme, major principles, major measures, and fundamental guarantees for further deepening reform comprehensively. The entire Party from the leadership down must work as one to ensure that the Resolution is implemented and the strategic plans for further deepening reform comprehensively are translated into strong impetus for advancing Chinese modernization.”
“At the session, an analysis of the present situation and the tasks we face was conducted. It was highlighted that we must remain firmly committed to accomplishing the goals for this year’s economic and social development. In accordance with the Party Central Committee’s decisions and plans concerning economic work, we will ensure effective implementation of macro policies, strive to expand domestic demand, develop new quality productive forces in light of local conditions, move faster to foster new drivers of foreign trade, take solid steps toward green and low-carbon development, ensure and improve the people’s wellbeing, and consolidate and build upon our achievements in poverty alleviation. We will review and assess the implementation of the 14th Five-Year Plan (2021-2025) and make sound preparations for the 15th Five-Year Plan (2026-2030).”
“It was stated that we must ensure both development and security. To this end, we will implement various measures for preventing and defusing risks in real estate, local government debt, small and medium financial institutions, and other key areas. We will make sure that responsibilities for workplace safety are strictly fulfilled and refine the measures for monitoring, preventing, and controlling natural disasters, especially floods. We will strengthen the network for preventing and controlling public security risks so as to safeguard social stability. We will improve public opinion guidance and effectively deal with risks in the ideological domain. We will properly respond to external risks and challenges, strive to play a leading role in global governance, and actively work to foster a favorable external environment.”
The final paragraph on the reform agenda says:
“we must arm all Party members with the Party’s new theories to enhance their understanding of Marxism and their capacity for advancing the modernization drive. We will refine the systems for exercising full and rigorous self-governance, improve work conduct, and rectify the deep-rooted practices of pointless formalities and bureaucratism in a continued effort to ease the burdens on those working on the ground. We will redouble efforts to improve Party conduct, build integrity, and fight corruption and make solid strides in carrying out discipline inspections. We will consolidate and expand on what we have achieved in theoretical study initiatives, advance the campaign to increase awareness of Party discipline, safeguard the Party’s solidarity and unity, and continue to enhance the Party’s creativity, cohesion, and ability.”