Free to read: Key Party Plenum to Prioritize Reforms in Tech, Fiscal and Tax Systems, Observers Say

‘New productive forces’ to be a key phrase at the political event, which kicked off Monday

The twice-a-decade meeting is usually when the party leadership rolls out important economic and political policies. Photo: Xinhua

Observers expect the Communist Party of China’s Central Committee’s ongoing third plenum in Beijing to issue directives on the country’s fiscal and tax system, state-owned enterprises, technology development, and social security.

On Monday morning, President Xi Jinping presented a work report to the highly anticipated political gathering and shared a draft of the 20th Central Committee’s decision on “further comprehensively deepening reform and advancing Chinese modernization,” according to a report from the state-run Xinhua News Agency.

The draft, which provides an in-depth analysis of the emerging problems facing China’s modernization efforts as well as plans for future reforms, will be deliberated on during the four-day event that will run through Thursday, according to separate state media reports.

Experts believe the plenum will seek to address “overarching and strategic issues” as China grapples with an economic slowdown, shrinking population, real estate slump and high local debt, while externally facing a rising tide of de-globalization.

One of the focuses of the plenum will be economic reform, including accelerating the construction of a unified national market, improving the country’s income distribution and social security systems, and enhancing the integrated development of urban and rural areas, according to Zhang Jiqiang, vice director of Huatai Securities Co. Ltd.’ research team. These areas were mentioned in a key national political consultative body meeting held in early June.

Zhang added that “new quality productive forces” — a concept introduced last year which emphasizes developing advanced technologies and scientific and technological self-reliance — will be an important keyword.

In addition, policies to address local government debt, resolve financial risks and ensure food and energy security as well as reforms to housing, medical care, education and social security will also likely be major focuses of the meeting, according to Zhang.

During a June Politburo meeting, the party’s top decision-making body said the main goal of deepening reform is to continue to improve the socialist system with Chinese characteristics and modernize the country’s governance system and capacity. China has set the goal of “basically achieving socialist modernization” by 2035.

Ren Zeping, former chief economist of China Evergrande Group, believes China will continue to “push forward the breadth and depth of its reform” in an article published on his WeChat account on Sunday.

Specifically, Ren noted that broadening consumption taxes, further development of the digital economy, focus on risk mitigation and supervision for financial activities, as well as continued state-owned enterprise reform are likely to be priorities.

The party’s third plenum, a twice-a-decade meeting attended by some 400 Central Committee members and alternate members, is usually when the party leadership rolls out important economic and political policies. The 1978 plenum led to China’s reform and opening up and the 2013 edition introduced plans to ease the country’s decades-long one-child policy.

The first and second plenums of the current Central Committee, held in October 2022 and February 2023, respectively, focused on leadership changes and institutional reform.