Steady as Xi Goes? China after the Third Plenum

External observers keenly anticipated the Chinese Communist Party’s (CCP) third plenary session of the twentieth Central Committee. Third plenums—the third plenary meeting of the Central Committee of the CCP elected at the last Party Congress (in this instance in November 2022)—have, in the post-Mao era, traditionally been where the Central Committee issues “authoritative” decisions on the direction of continued “reform and opening” policies.

The July 18 Third Plenum resolutionhowever, was notable for the fact that it introduced little that was substantively new in terms of policy. Instead, it served to reiterate the Party’s commitment to the hallmarks of Xi’s policy agenda: state-led efforts to gird the economy for self-sufficiency and resilience against external shocks, firm ideological control, and the linkage of national security and “development” as interdependent conditions necessary for China’s continued rise.

Herein may lie the plenum’s significance: to signal that Xi remains firmly in the driver’s seat.

Some external observers have suggested that this signals the failure of the “China model” or that Xi has “missed” an opportunity for course correction of the Chinese economy. Yet that misreads the fact that for Xi, it is not an either-or-choice between the economy and politics. Rather, they are inextricably connected as Xi seeks to build a new “China model” that is capable of grappling simultaneously with both China’s economic headwinds and “strategic competition” with the United States.

The plenum resolution thus “unanimously agreed that in the face of a serious and complex international environment,” advancing “reform and development and ensuring stability at home” would be achieved by “promoting high-quality development” and “strengthening full and rigorous (Party) self- governance.”

The emphasis on “high-quality development” spruiked at the plenum had been prefigured by a “study session” of the Politburo Standing Committee (PBSC) in January, which identified the harnessing of “new qualitative productive forces” as central to the achievement of this goal. “New productive forces” are short-hand for the application of innovation to the cutting-edge “frontier” of technology (eg, Artificial Intelligence, quantum computing) that will make China self-reliant in the “fourth industrial revolution,” as well as to traditional manufacturing industries.

This dual emphasis, Evan Feigenbaum suggestsis not only designed to “better insulate China from American strategic pressure” such as the CHIPS Act but also geared to “lock in Chinese dominance of advanced manufacturing and outcompete global rivals in old-fashioned industries like shipbuilding.” Only in this way, the PBSC study session notedcan China succeed in “breaking away from traditional economic growth modes and paths of productive force development.”

That this is not simply tied to “breaking away” from China’s post-1978 growth model but to “strategic competition” was emphasized by the communiqué’s treatment of “national security.”

Although explicitly identified as “a pivotal foundation for ensuring steady and continued progress in Chinese modernization,” “national security” was framed as interdependent with “high-quality development.” “We must,” the resolution stated, “ensure that high-quality development and greater security reinforce each other, so as to safeguard the country’s long-term stability and security.”

There are two salient observations to be made here. First, this is consistent with previous statements by Xi that frame the transition to a new economic model as crucial to both continued development and the attainment of “strategic initiative in international competition.” Second, such framing signals the continued security of major policy areas in the service of the political security of the CCP under Xi’s leadership.

Indeed, Xi’s explanatory note on the plenum’s decision demonstrates both dynamics. The section on “national security” underscores the objective of “modernizing” the “national security system” through the establishment of “a unified national population management system” and improvement in “the overall prevention and control system for public security,” as well as noting that the “integration of development and security” will enable the Party-state to improve “Mechanisms for countering foreign sanctions, interference, and long-arm jurisdiction…” (ie enable it to overcome US-led economic and diplomatic sanctions).

The plenum’s commitment to ensure ideological “self-governance” and discipline within the Party is not surprising. However, the tone and substance of that statement, as well as some lengthier associated official explanations of how the plenum’s resolution was arrived at, providing some indication of the nature of contemporary elite politics and decision-making.

The resolution noted that the Party had to “follow the leadership core,” “keep in alignment with the central Party leadership,” “stay confident in the path, theory, system, and culture of socialism with Chinese characteristics,” and “uphold Comrade Xi Jinping’s core position on the Party Central Committee…and the Central Committee’s authority and its centralized, unified leadership.” This is consistent with major ideology instructions since the 2022 Party Congress that have sought to consolidate Xi’s role as the fountainhead of political and ideological authority.

Xi’s explanatory note, however, struck a tone that suggests some level of dissatisfaction with the progress of this project when it stipulated that the plenum’s decision was, in fact, an opportunity for the Party to make a “redeclaration of what banner to hold and what road to take in the new era.”

With respect to policy, Xi’s note implies that some of China’s current problems are the result of poor implementation rather than poor policy. It notes, for example, the need to improve “the institutional mechanisms for preventing and controlling formalism and bureaucracy,” “the mechanism for investigating and dealing with unhealthy trends and corruption at the same time,” and “methods for preventing and controlling new types of corruption and hidden corruption.”

It appears that China’s former Minister of Defense Li Shangfuhead of the People’s Liberation Army Rocket Force (PLARF) General Li Yuchao, and chief-of-staff of the PLARF, lieutenant-general Sun Jinming—whose expulsions from the CCP were confirmed in the plenum resolution—likely fell afoul of this ongoing quest to ensure both loyalty and probity among top officials.

Finally, as Neil Thomas has highlighted, the official commentary on the “making of the decision of the third plenum” demonstrates that Xi “increasingly discourages internal policy discussions.” Thomas notes that in May, “the plenum drafting team circulated a draft decision to executives, retired leaders, satellite parties, and policy experts,” from which they subsequently received “1,911 suggestions and made 221 revisions,” while “the drafting team for the 2013 decision received 2,564 suggestions and made 539 revisions, meaning this plenum saw a 25 (percent) fall in suggestions and a near-halving of their acceptance rate from 21 (percent) to 12 (percent).”

The third plenum has thus been significant in demonstrating Xi’s continued hold over the Party and its decision-making processes. While that outcome may speak to Xi’s political success in further consolidating his unchallenged position and affirming his preferences across core policy domains, it remains to be seen whether this will help or hinder China’s ability to both solve deep domestic problems and compete with the United States.

Dr. Michael Clarke is a Senior Lecturer in Strategic Studies at the Deakin Center for Future Defense and National Security at the Australian War College (Canberra) and Adjunct Professor at the Australia-China Relations Institute, University of Technology Sydney. Follow him on LinkedIn and X @meclarke114.

Dr. Jade Guan is a Senior Lecturer in Strategic Studies at the Deakin Center for Future Defense and National Security at the Australian War College (Canberra). Follow her on LinkedIn and X @JiaAu.

Image: Mirko Kuzmanovic / Shutterstock.com.