Top officials from China's ruling Communist Party gathered in Beijing for the third plenum, a meeting that takes place every five years to announce key economic reforms and policy directives. The outcomes of the plenum are expected to have significant implications for China's domestic and international policies, as well as its role in the global economy and foreign investors' willingness to do business in the country [03cd5570].
Craig Allen, president of the U.S.-China Business Council, expressed optimism about the economic policies emerging from the third plenary session of the 20th Central Committee of the Communist Party of China (CPC) held in August 2024. He noted measures aimed at expanding domestic market demand, improving market exit mechanisms, and promoting technological innovation. Allen highlighted the plenum's focus on consumption and domestic demand as crucial for economic growth [218afd12].
China's Communist Party has published a communique after its third plenum, outlining broad reform packages over the medium and longer term. Investment banks view the readout as largely in line regarding long-term reform direction, but slightly more positive in terms of near-term macro policy stance. They believe more demand-side easing measures are necessary to secure the full-year 'around 5 percent' real GDP growth target. The communique's emphasis on 'opening up as a distinctive feature of China's modernization' is worth noting, and the government is expected to prioritize reforms that will facilitate foreign investments. Moody's Analytics expects China to publish a comprehensive document outlining the decisions in the coming weeks [dde65f8c].
Allen also mentioned that despite challenges like low profitability, China's manufacturing exports are thriving, and the plenum discussed revising bankruptcy laws to aid poorly performing companies. He emphasized the significance of research and development (R&D) investment, which currently stands at 2.6% of China's GDP. U.S. companies are eager to collaborate with China in sectors such as health care, climate change, and finance. Allen cited IMF data predicting that China will contribute about 30% of global GDP growth in 2024, expressing confidence in the long-term development of the Chinese market and the commitment of U.S. companies to invest in China [218afd12].
Representatives of Western firms in China have expressed disappointment over Beijing's lack of specific measures to improve the business climate after the third plenum. Overseas enterprises will remain in a holding pattern before increasing investments in China. A group of heavyweight U.S. executives, including representatives from Goldman Sachs, Starbucks, Nike, and Qualcomm, will head to Beijing next week to meet with Chinese officials and obtain firsthand insights following the conclusion of China's third plenum. The visit is arranged by the U.S.-China Business Council (USCBC) and will be led by council president Craig Allen and board chair Raj Subramaniam, CEO of FedEx Corporation. The executives hope to meet with top Chinese leaders, such as foreign minister Wang Yi and the minister of commerce, Wang Wentao [ddb7c7c3].
A delegation of the board of directors of the USCBC, including executives from Boeing Global and United Family Healthcare, met with Chinese officials following the third plenary session of the 20th Communist Party of China Central Committee. The visit demonstrates the high interest of the U.S. business community in strengthening cooperation with China and highlights the intertwined nature of bilateral economic ties. China emphasized its commitment to opening up and promoting reform through opening up. Chinese Commerce Minister Wang Wentao and Chinese Vice Premier He Lifeng met with the delegation, discussing China-U.S. economic and trade relations and the development of U.S. enterprises in China [51b0e310].
China's Third Plenary Session of the 20th CPC Central Committee's Communiqué emphasizes openness, modernization, innovation, and economic globalization through structural reforms. It rejects Western notions of decoupling, delinking, and China's collapse theories. China has completed a Comprehensive Agreement on Investment with the European Union and applied to join the CPTPP and DEPA, showcasing its desire for further opening-up. China's economy grew by 5% in the first half of the year, with investments in high-tech manufacturing and services experiencing double-digit growth. International organizations have raised their forecasts for China's economic growth. The resolution of the plenum includes plans for fiscal and financial reforms, affordable housing, employment policies, and improving the standard of living. China aims to tap into the potential of its economy through technological innovation and institutional reforms [8c8f55a5].
US experts have lauded China's third plenary session of the 20th Central Committee of the Communist Party of China, which emphasized reform and modernization. Guoguang Wu, a senior fellow on Chinese politics at the Asia Society Policy Institute's Center for China Analysis, said the Party is sending a 'very strong signal to Chinese people and the international society that we will have reform'. Lizzi Lee, a fellow on Chinese economy at the ASPI's Center for China Analysis, noted that the emphasis of the third plenary session was on 'Chinese-style modernization', including emphasis on technology innovation and the 'new quality productive forces'. The plenary session also highlighted challenges such as income inequality, trade tensions, and fiscal issues and noted strategies to address those issues through supply chain policies, market roles, and financial reforms [b2f57976].
China's Politburo, the Chinese Communist Party’s top decision-making body led by President Xi Jinping, has pledged to step up macro policies and stabilize market confidence to achieve the full-year economic growth goal. The leadership signaled more support for emerging sectors, vowed to unleash more domestic demand, and warned against 'vicious competition' among local companies. The country aims to keep economic growth at around 5% after official data showed the recovery momentum slowing in the second quarter [c5e878ac].