Xi Jinping means business on economy, talks reform with industry captains and academia

Before the crucial third plenum of the Communist Party in July, where the country’s leaders are slated to outline the roadmap for reforms and rejuvenate the struggling economy, President Xi Jinping urged for deeper reforms to tackle the economic issues facing the nation.

“Reform is the driving force for development,” Xi told a symposium in Jinan, in the eastern province of Shandong, where he met with the top brass of state-owned firms, private entrepreneurs and overseas investors.

“We must pursue an approach that is both goal- and problem-oriented to solve problems … focus on deep-seated institutional obstacles and structural issues,” President Xi said according to a South China Morning Post report.

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The world’s second-largest economy is facing myriad problems like a stagnant real estate sector, poor internal demand, rising debt and trade and tariff issues abroad mostly anchored by US.

As reported by Xinhua news agency, those present also shared thoughts on advancing reforms, facilitating favourable conditions for venture capital investments, modernising traditional industries, enhancing corporate governance in private enterprises and refining business environment for foreign companies.

President Xi, who is also general secretary of the Communist Party of China Central Committee and chairman of the Central Military Commission, said that China should take firm steps to remove ideological and institutional barriers standing as an obstacle in the country’s modernisation efforts.

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China needs urgent impetus to regain investor confidence and to keep the morale high of its citizens in general as an overall gloom in the country’s economy is all-pervading.

“China’s economic miracle is ending, leaving President Xi Jinping with a challenge none of his predecessors faced: how to govern after the boom. For four decades, China’s 1.4 billion population experienced unparalleled gains in income and wealth. But recently the blows have just kept coming. Real estate collapse, trade war with the US, a crackdown on entrepreneurs, and extended Covid lockdowns have stalled the prosperity engine,” said a Bloomberg piece.

The Bloomberg piece said that even if the incomes in China are going up, but gains have been slowest under President Xi since the late 1980s. The property sector is in deep red with no signs of revival soon. “A real estate bubble, overcapacity in industries, high debt and a low fertility rate are all major imbalances that China’s current leadership didn’t cause but are now forced to confront,” it said.

Importance of Third Plenum

The Third Plenum of the Communist Party of China (CPC) holds a special place in China’s modern history. Taking place in December 1978, it was a crucial moment in China’s shift toward economic reform and openness. Following chairman Mao Zedong’s death two years earlier, this plenum marked a significant break from the turbulent Cultural Revolution era, signalling a new era under Deng Xiaoping’s leadership.

At this gathering, Deng Xiaoping, then the paramount leader, introduced sweeping economic reforms aimed at modernising China’s economy. These changes included replacing collective farming with individual household contracts in agriculture, as well as opening China to foreign investment and trade. Additionally, the plenum stressed the importance of technological advancement and the development of a socialist market economy.

Throughout history, the Third Plenum of the CPC has been instrumental in introducing major policy changes and reforms that have profoundly impacted China’s development and its global role.

Although delayed by a few months, the Third Plenary in July is an extremely important one for President Xi Jinping as the Chinese economy is desperately looking for ways to recover from the gloomy numbers which is also hurting the president’s image.