‘The biggest story in Chinese politics right now’ – silence over Communist Party’s autumn meeting

As China’s ruling Politburo wrapped up its October meeting on Wednesday, there was still no word on a key autumn meeting of the Communist Party, which according to party convention should be taking place soon if not convened already.

Analysts said the likely delay of the Central Committee meeting – expected to focus on mid to long-term economic policies – might suggest a lack of consensus among the Chinese leadership over how to battle the growing headwinds facing the world’s second-largest economy.

The autumn plenum that comes a year after the party’s national congress is largely seen as the most important full meeting of the party’s roughly 400-strong political elite, who gather behind closed doors at least once a year.

In recent decades, it was often an occasion when Chinese leaders revealed major reform programmes and new economic blueprints.

It was at this plenum in 1978, for instance, that late paramount leader Deng Xiaoping launched the “reform and opening up” that placed China on its path of economic liberalisation. Another autumn plenum in 1993 endorsed the concept of the “socialist market economy”, which dismantled a large part of China’s state-owned sector.

But this year, as China reaches the 40th anniversary of Deng’s reforms, a cloud of uncertainty and anxiety is hanging over the country’s future path.

Many people are watching its slowing economy, faltering stock markets and the dispiriting retreat of its beleaguered private sector. Their gloomy outlook is exacerbated by the prolonged trade war with the United States, which threatens to spill into all-out conflict in spheres ranging from technology to geopolitics to defence.

Some had hoped the country’s ruling elite would use the plenum to give a clear verdict on which direction China would take, and what it should do to counter the headwinds from the trade war and its economic downturn.

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But as September and October slipped by, silence around the plenum persisted.

The Politburo meeting chaired by President Xi Jinping on Wednesday delivered a stern warning on the “growing downward pressure” on the economy and the “profound changes” in the external environment – the first time the Chinese leadership has publicly acknowledged China’s economic slowdown since the trade war.

It outlined its aim to be “more forward-looking” and “timely” in a new game plan for the private economy and the stock market.

“We have to enhance reform and opening up to focus on core problems with targeted solutions … We must get our own things done and firmly seek high-quality growth,” the Politburo statement read.

However, the meeting did not mention anything about the plenum – a noticeable departure from party tradition.

“It’s the biggest story, or non-story, in China right now,” said Trey McArver, co-founder of Trivium China, a Beijing-based research consultancy.

“When they didn’t set a date [for the plenum] in the September Politburo meeting, I was shocked by that. But what I’ve been shocked more by is that in general nobody is talking about the plenum at all.”

Usually, a third plenum would take place in the autumn, after the first plenum introduced the party’s new leadership immediately after the party congress and the second plenum settled personnel arrangements for state offices ahead of the annual legislative meetings in March.

But since the party’s 19th national congress in October, three plenums have already been convened by the new leadership. An extra one was convened at the start of the year to approve a controversial revision to the state constitution which scrapped the term limit that would have required Xi to step down in 2023.

A lot had changed since then, said Chen Daoyin, a political observer in Shanghai. “Back in March, Xi’s administration was still full of confidence about China’s future development, otherwise he would not have been so unstoppable in consolidating his power since the party congress and pushing through the constitutional amendment,” he said.

“But now, the ordinary Chinese people have started to lose hope on China’s economic development.”

According to party tradition, the date of a plenum must be announced at a Politburo meeting, which usually takes place towards the end of every month. With October’s meeting ending with no mention of the plenum, the earliest time it could be held would be near late November, given Chinese top leaders will have a busy schedule throughout November.

The first China International Import Expo, one of the key events of the year for the Chinese government, will be held in Shanghai next week, followed by the Asia-Pacific Economic Cooperation summit on November 17 and 18 in Papua New Guinea and the G20 summit in Argentina at the end of the month.

The delay of a fourth plenum, according to Chen, could be due to a lack of consensus among the party’s elite on the solutions to the problems facing China.

Beijing might also be waiting for the results of the US midterm elections and the meeting between Xi and US President Donald Trump at the G20 summit in Buenos Aires to make a better assessment, he added.

“The key factor that has led to the change of the situation China faces in the past year is the US factor,” he said. “It is hard for the Chinese leadership to make concrete responses given all the uncertainties at the moment.”

But Beijing-based political commentator Zhang Lifan said that even if Trump’s Republicans suffered losses in the midterm elections, Washington would not necessarily relax its pressure on China.

“[Beijing] might be deferring [the plenum] … and waiting for the midterm results,” Zhang said. “But I doubt it would have much impact. Suppressing China is a bipartisan consensus.”

Key Communist Party plenum set for late October

He also said the Communist Party elites appeared yet to reach a consensus on the future course of the country, citing the sometimes conflicting messages from Xi’s recent tours of the northeastern rust belt and the liberal southern province of Guangdong.

“Are we continuing reform and opening up, or pursuing a self-reliant strategy? There may not be a high degree of consensus among the establishment yet,” Zhang said, citing as an example Beijing’s swaying remarks on the role played by state-owned enterprises (SOEs) in China’s economy.

The silence is also a stark contrast to the high-profile preparations leading to the third plenum in November 2013, a year into Xi’s administration.

Back then, the meeting was announced with three months’ notice, after the Politburo meeting in August. Two weeks before the plenum, Yu Zhengsheng – then the fourth-ranking member in the Politburo Standing Committee – promised in public that the closed-door meeting would unveil “unprecedented” economic and societal reforms.

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Indeed, the much-anticipated plenum pledged to allow the market to play a “decisive” role in the economy, while maintaining the importance of the party’s hand and the state sector. A party directive following the meeting listed more than 300 specific reform measures in 60 categories.

But implementation of many reforms has been on a piecemeal basis. While progress has been made in areas such as liberalisation of prices for several crucial commodities, the tougher reforms, such as on SOEs, have seen little progress.

The private sector, although contributing about 80 per cent of the country’s new jobs, is increasingly losing ground to the SOEs, which have been consolidated and strengthened. This year alone, at least 47 distressed non-state companies have disclosed plans to sell stakes to government-backed investors, according to Bloomberg.

McArver, from Trivium China, said the reform measures announced at the 2013 plenum were not on a five-year time frame but on a seven-year one towards 2020.

“The reason we don’t have much hyping about new reform is that Xi and the broader leadership are not changing course,” he said. “They see the 2013 plenum as a road map all the way through to 2020.”

Additional reporting by Choi Chi-yuk

This article was published by South China Morning Post. Click here to read the original.