After several postponements, China is set to hold its third plenary session of the 20th Central Committee next month. This meeting is known for its major economic reforms or policy announcements. The delay in the Third Plenum in 2023 raised concerns about potential divisions within the Chinese Communist Party under President Xi Jinping, particularly following the lackluster performance of the Chinese economy after the lifting of Xi’s “Zero Covid” policy in late 2022.
As the meeting approaches, conflicting narratives about China’s economy have emerged in international media. On one hand, some focus on structural issues and policy failures during Xi’s tenure, highlighting low economic growth, high unemployment, weak consumption, demographic challenges, and a sense of uncertainty about the future. On the other hand, others emphasize China’s successes in manufacturing, particularly in new energy sectors like solar and electric vehicles achieved through state-led development and industrial policy.
One issue that plays a significant role in both narratives is overcapacity and export gluts. With a focus on export-led manufacturing due to sluggish domestic consumption, economic policies in China are closely tied to these factors. While these two media narratives may seem polarized, they are actually interdependent; each sheds light on different aspects of China’s political economy.
With this meeting approaching, it will be interesting to see how China navigates these complex issues and what announcements it will make regarding its future economic direction.
