China’s plan to defeat the West The CCP has revealed its new economic strategy
In the five-year political cycle of the Chinese Communist Party, the Central Committee’s Third Plenum is often considered the most important for the setting out of transformational and strategic economic goals. In reality, there have only been a couple of such Third Plenums, and none since 1993.
Just after Xi Jinping came to power, the 2013 Third Plenum provided an ambitious programme of economic and policy reforms, but much was diluted or ignored. Xi largely paid lip-service to market-related reforms, but was more interested in Party discipline, greater centralisation of political power, and cracking down on dissent and the free spirits of entrepreneurs and private firms.
But last month’s Plenum came at a time when China’s economic bliss had started to wane. In recent months and years, even allowing for Covid, the nation’s economic growth has slowed significantly, productivity growth has stalled, and the country has experienced the adverse effects of rising misallocation of capital, over-investment in infrastructure and housing, and a rising burden of debt. The property market boom, which lasted for a couple of decades, is over , and youth unemployment has dramatically soared . Despite calls from economists, including some in China, for measures to strengthen household income and consumption, the government has preferred to prioritise industrial policy and national security. In short, even as previously successful companies like Huawei, Alibaba, Tencent, and now electric vehicle and battery firms such as BYD and CATL, have risen to global prominence, a macroeconomic malaise has descended over the economy.
Last month’s gathering was, therefore, awaited eagerly. What would the Party say about the trenchant and inter-related issues concerning its faltering economic development model at home, rising trade tensions with the US, the EU and other countries, and the ubiquitous significance of national security and geopolitics?
