As the third plenary session of the 20th Central Committee of the Chinese Communist Party, which will present the direction of China’s economic policy, is scheduled to be held in July, attention is drawn to what will be announced.
On the 30th of last month, the Central Politburo of the Chinese Communist Party, chaired by President Xi Jinping, held a meeting and decided to have the third plenary session in July.
This plenary session is particularly noteworthy as it will be held amid a recent economic downturn in China.
According to tradition, the session should have been held between October and November last year following the 20th Party Congress in October 2022. Still, the delay is speculated to be due to the burden and concern of presenting solutions in a difficult economic situation.
China’s state-run Xinhua News Agency reported, “The economy still faces many challenges. Demand is still insufficient, there are considerable pressures on businesses, and there are risks in many key areas,” adding that “the domestic economic cycle is not smooth, and the complexity, severity, and uncertainty of the external environment have increased.”
Some economists suggest the possibility of a shift in China’s economic direction at this plenary session. In particular, new measures are predicted to emerge in real estate policies.
Julian Evans-Pritchard, Head of China Economics at Capital Economics, said, “They seem to be admitting that the current policy approach is failing to find a balance in China’s real estate market and requires a new strategy.”
Measures to stimulate domestic demand are also expected to be presented. Bert Hoffmann, a professor at the East Asia Institute at the National University of Singapore, predicted, “Measures to stimulate domestic demand that could call for a broad shift in China’s approach to tax policy, fiscal policy, and social security may be presented.”
On the other hand, there are opinions that China will send signals to maintain its recent economic approach without any particular policy.
Feng Chucheng, an analyst at Plenum Research, said, “Looking at the announcements of Politburo, it is repeating the main elements of the economic declaration that the party has made over the past few months,” adding, “This suggests that the Chinese government will generally maintain its current policy.”
In addition, this meeting is predicted to address the issues of high-ranking officials, including former Foreign Minister Qin Gang and former Defense Minister Li Shangfu, who lost their seats last year, and former Rocket Army Commander Li Yuchao.