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China’s Third Plenum is Adrift in a Sea of Old Rhetoric

In a closed door, four-day meeting of senior members of the Chinese government, the Third Plenum of the 18th Party Congress met to address China’s future political strategy. The assembly, held in Beijing, comes one year after China’s new leadership ascended to power, for the purpose of detailing government reforms to spur the country’s continued growth. Hyped as being the most important and influential policy briefing since that of the 1978 gathering featuring Deng Xiaoping’s sweeping reforms and rise to power, nothing short of comprehensive changes to financial and social policy were expected. New President Xi Jinping and Premier Li Keqiang had the opportunity to use the Third Plenum as a springboard to jumpstart its objectives of continued growth and forge legitimacy for its next ten years in power. But the communiqué released after the meeting left Beijing observers surprised and disappointed. Featuring little more than aged slogans and talking points, Xi’s government failed in its most important mission – to give momentum to reforms.

The lack of ingenuity and vague language on any type of substantial reform offered by the Third Plenum communiqué eradicated the optimism and hype generated prior to the event. The need for broad appeal by the Chinese Communist Party (CCP) diminished the overall value of the Plenum to establish real results. Spread wide but not deep, the ‘details’ released mention five key areas of reform: economics, politics, society, the environment, and culture. By hitting all these issues, the CCP appeased many different groups but broke no new ground. Written in a consensus process, it does little more than reaffirm the mantras and jargon of the 18th Party Congress of last fall.

The creation of a “leadership small group” to hash out economic modifications can be seen on the surface as a major policy progression, yet it only further confirms the ineffectiveness of the Plenum to specify how change will occur.

The Plenum itself was supposed to be the vehicle in which these issues could be developed. Instead the responsibility was passed on to this new committee to cultivate a blueprint for economic reform. This leaves us with questions as to why the CCP leadership was unable to perform this task. Though to this point a great disappointment, the leadership small group will soon be an authoritative one, and this undertaking is far from over.

As outlined in the communiqué, the proposed role of the marketplace offers the greatest moment of optimism to come out of the Plenum. The CCP has called for an increased role of the market in resource allocation – a sizable step forward from the government’s current position. Also expressed is a roll-back of excessive government intervention, greater market competition, and a more independent judiciary system – all which would be the type of momentous change that was expected leading up to the Plenum. But yet again no outline or specifics were given for implementing these economic reforms. There can be no expectation that the public economic system is being dismantled. Rather, we can expect the government to maintain its predominant role in managing the economy.

What is missing from the communiqué is starker then what was actually included. But lack of specifics cannot always be seen as a failure. The pioneering 1978 Third Plenum offered up a lack of details as well. Notwithstanding, major change was spearheaded in 1978, so the hope here is that, while thin on details, this past week’s Plenum will bear fruit down the line.

For a communist party looking to maintain its control of the Chinese government, the Plenum needs to produce results, not the familiar communist terminology, propaganda, and antiquated mottos that this communiqué delivers. With the stagnation of the economy and a growing middle class, it is essential that China’s government strengthen its credibility with the population, and therefore must make major political and economic changes. It is hard to quantify such changes coming out this Third Plenum, exacerbating the CCP’s credibility crisis.

The Third Plenum’s bullish language seems to provide something for everyone, but a closer examination leaves observers wanting. The CCP must provide solid ground on which true change can take place. It remains to be seen how the vague statements of the Third Plenum will play out in the coming weeks and months. What the leadership small group can accomplish will go far in establishing what actual reforms may come. But as it stands now the Third Plenum, and China’s leadership has produced little more than recycled CCP policies, deterring real structural reform.