China’s Communist Party is concluding a critical meeting expected to back policies designed to enhance the nation’s technological strength and national security. This top-level gathering of the Central Committee, held in private, is poised to emphasize strategies for economic self-reliance amid increasing restrictions on access to advanced Western technologies like computer chips and artificial intelligence.
With economic growth slowing to 4.7% in the April to June quarter, the Chinese government is seeking ways to revive its economy. Key issues include the struggling real estate sector and weak consumer confidence, which have hampered recovery from the COVID-19 pandemic. Analysts predict that new policies will likely focus on technological advancements and investments, in line with leader Xi Jinping’s vision for “high-quality development.”
Recent state media reports and government statements suggest Beijing will prioritize technological investments and encourage companies to upgrade their equipment and expertise. This move aligns with Xi’s goal of Chinese modernization and reflects his recent remarks on reform and opening-up at major meetings. The party’s newspaper, Global Times, highlighted that the meetings aim to resolve deep-seated institutional challenges and promote high-quality development.
Despite the Communist Party’s increased control over various sectors, Chinese leaders maintain that the country will remain open to foreign investment. However, this assurance contrasts with earlier promises of further economic opening and pro-market reforms. According to Teeuwe Mevissen, a senior strategist at Rabobank, Beijing might introduce new incentives for foreign investors and measures to support “common prosperity,” allowing ordinary Chinese to benefit more from economic growth.
Another pressing issue is the financial strain on local governments, which have accumulated significant debt. The crackdown on heavy borrowing by property developers has pushed the real estate industry into crisis, cutting off a crucial source of tax revenue from land-use rights sales.
The current session is the third plenary meeting of the 205-member Central Committee, which began its five-year term in 2022. Historically, third plenums set major economic and policy directions. While significant stimulus spending announcements are unlikely, the urgency of China’s economic challenges might prompt more substantial actions this time.
In summary, China’s leadership is focused on advancing technological self-sufficiency and addressing economic challenges, balancing national security with efforts to attract foreign investment and support local economies. The outcomes of this meeting will be crucial in shaping China’s future economic policies and growth trajectory.
