The recently held four-day Third Plenum of the Communist Party of China (CPA) ended, not with a bang as was being internationally anticipated, but with the usual statement about “further deepening reform comprehensively to advance Chinese modernization”.

The full resolution passed by the Plenum, suddenly declared that it has set a new goal of completing its reform effort by 2029.

The year chosen for the completion of reform coincides with the 80th anniversary of the founding of the People’s Republic of China.

Despite expectations of China announcing policy initiatives to stem the decline in the economy and particularly, the property sector, Xi Jinping has chosen to make declaratory statements that indicate that he is more concerned about political continuity than economic development for China.

While it could be said that the language of the Resolution reflects standard Chinese verbiage it means little in terms of actual action on the ground to set right the precarious economic situation in China.

The phrase “Chinese modernization” is meant to reflect the nation’s growth as a superpower with the objective of playing catch up and perhaps even overtaking the United States.

What is clear however, is that is China is certainly preparing for Xi Jinping’s rule beyond 2027 amidst a possible Trump presidency, with the latter accelerating decoupling with China.

A reading of the text of the Resolution shows that apart from mention of the 2029 milepost and that the Plenum announced over 300 reform proposals, there was no explanation about what China would look like when they reached the target.

The 2029 goalpost is undoubtedly a political one, as it marks the 80th anniversary of the founding of “a new China,” or the PRC.

It is expected that a grand military parade will be held on 1 October to celebrate National Day.

The Chinese State currently faces unprecedented difficulties.

Domestically, political pressure is mounting due to the country’s economic woes.

On the foreign policy front, China does visualise tensions with the US increasing if Donald Trump is re-elected as President.

There is also the decoupling dynamic as well as tensions in South China Sea.

If Xi is to take China past 2027, he will have to be in a position to show a slew of achievements to the National Congress which takes place that year.

The political focus of the Third Plenum’s final resolution comes from a counting of how many times the name of Xi Jinping appeared, which in this case is mentioned only six times in the original Chinese version of the communique, while “Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era,” is mentioned only once.

A look at the Chinese version released after the Second Plenum in 2023 shows that Xi’s name appeared nine times and his ideology was mentioned four times.

The decline in the number of times Xi’s full name is mentioned is only an indicative but signals that China’s current economic situation is dire.

Perhaps the most important aspect of the Resolution (flowing from Xi’s focus on technological innovation) is the identification of Science and Technology as one of the primary bases of Chinese modernization.

Historically, no Chinese leader has ever admitted to making a mistake as far as economic policy is concerned.

Xi Jinping is not going to do so either even though he is to blame for the current crisis.

There is already internal criticism of Xi Jinping and admission by Xi will only rock the boat of stability.

The 2029 goal allows Xi Jinping to remain China’s leader.

The political undertones of the Third Plenum this year will be clear when Xi extends his tenure beyond 2027.

This will allow the CPC General Secretary to announce the completion of the reform process two years later.

Xi Jinping is certain to be around for the 2027 congress, short of a black swan event.

Pertinently, the full text of the latest resolution includes “2035,” the original goalpost for “basically realizing socialist modernization.”

The phrase “Chinese modernization” is meant to reflect the nation’s growth as a superpower with the objective of playing catch up and perhaps even overtaking the United States.

Prior to focusing on the political aspects of the Plenum and beyond, a careful reading of the Resolution informs us of the following areas that China wants attention to be given to domestically.

The first aspect relates to continuity in decisions at Third Plenum building on decisions made at other political events recently with one notable exception.

The phrase “public ownership remains mainstay,” is missing from the Resolution hinting possibly at stronger government support for the private sector.

The Resolution does reiterate the goal of “building a high-standard socialist market economy,” and stresses the need to ensure a balanced relationship between the public and private sectors.

While reaffirming the goal of making State-Owned Enterprises (SOEs) “bigger, better and stronger,” the Third Plenum’s final Resolution also details a series of measures to boost the private economy.

There is clearly some recognition by the CPC of the funds crisis faced by local governments as the Resolution proposes to transfer more power from the central government to local governments.

This measure will include permitting local governments to retain a larger share of fiscal revenues, as well as regulate their local property markets.

Thus while Xi will remain in power, the underlying conditions that exist in economic terms will persist creating some ripples across the Chinese lake.

The next point of note is the Third Plenum’s resolve to increase domestic demand, which has largely stagnated this year.

This aspect is an unstated challenge that has persisted for the last decade or so and while surplus production capacity is exported through the BRI, domestic demand has stagnated.

This is a complex process involving several factors and a mere statement of intent is unlikely to solve the problem.

Perhaps the most important aspect of the Resolution (flowing from Xi’s focus on technological innovation) is the identification of Science and Technology as one of the primary bases of Chinese modernization.

Towards this objective, the Resolution emphasizes the need for breakthroughs in “industries of the future” and “strategic industries.”

Interestingly, the Chinese state calls on support not just from state entities but also private enterprises, to achieve this goal, again giving filip to the idea that private industry will get more space.

Related to this is the importance given to S&T in domestic education by the Third Plenum.

The external dimension of Xi’s Third Plenum gambit finds mention when it says that China “will move faster to build industrial and supply chains that are self-supporting and risk-controllable.”

The document also claims that China will improve the institutions and mechanisms for bolstering key industrial chains.

Forecasting the situation in 2029 is a little tricky, but the current situation indicates a persistence of economic tensions, both domestically and internationally.

The confidence of the CPC in catching up and overtaking the US will probably continue and the gap may be closer than before.

However, the property crisis and the slow economic recovery could remain in place, even if the CPC did introduce new measures to revive the economy.

Thus while Xi will remain in power, the underlying conditions that exist in economic terms will persist creating some ripples across the Chinese lake.

@KH