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The 5th Plenary Session of the 19th CCP Central Committee: China's New Strategic Position

Updated: Jan 22, 2021

Great Hall of the People, Tiananmen © CEphoto, Uwe Aranas / CC BY-SA-3.0 / Wikimedia Commons

The Fifth Plenum of the 19th Central Committee of the Communist Party of China (CCCPC) was held last week from October 26 to October 29, 2020. Taking place at the Great Hall of the People overlooking Tiananmen Square, this four-day discussion focused on the economic and social policy goals for the coming years, with the Committee outlining the 14th Five-Year Plan (FYP) and a long-term vision for 2035. So what does this mean and how will it affect Europe?

What is a Plenary Session and what Role does the 5th Plenum Play?

A plenum, or a plenary session, is a closed-door meeting reserved for the leading representatives of the Central Committee of the Communist Party of China (CCCPC) and represents the most important event in the Chinese political calendar. The CCCPC is the organ of highest authority within the party structure, first formed in 1927, with members elected once every five years by the National Party Congress (NPC). The Political Bureau (or Politburo) of each Central Committee leads several plenary sessions during their five-year mandate. There are typically seven plenary sessions, characterized by a fixed schedule of topics.

The last plenary session was the fifth held by the 19th CCCPC, elected in 2017. The 5th Plenum played an important role because it presented the path China intends to take in the coming years. The country promised to develop measures aiming to affirm its self-sufficiency and economic stability. The 14th FYP whose publication is scheduled for March 2021 was also discussed and approved .

In the course of Chinese history, Five-Year Plans set out China’s future economic growth implementing long-term development guidelines. Despite the “long-term vision” of the 14th FYP, the economic policies introduced and the decisions made were largely determined by the geopolitical tension with the United States, as well as the ongoing global pandemic which exposed highlighted Beijing’s reliance on foreign markets.

Key events before the 5th Plenum

Xi Jinping’s visit to China’s Guangdong Province: in October 2020 President Xi visited Guangdong Province for the third time since the 18th National Congress of the CCP. Xi gave a speech at a celebration of the 40th anniversary of the creation of the Shenzhen Special Economic Zone, an event in which his father, Xi Zhongxun, played a significant role. This visit was made in the name of “self-reliance”. He underlined the development of indigenous companies, identifying independent innovation as the key to the growth of Chinese enterprises.

China’s new export control law: during a session started on October 13, 2020, the Standing Committee of the National People’s Congress deliberated on a new export control law, expected to come into effect in 2021, in order to safeguard national security by imposing restrictions on the exporting of sensitive technologies.

China’s GDP growth: despite the pandemic and thanks to the boom in consumption registered during the Golden Week holiday period, China currently has a GDP growth of 4.9%. China’s consumption boom indicates that the economy has almost completely recovered from the effect of the global pandemic.

The Discussion

China and the Dual Circulation Strategy

Against this background, China is experiencing positive economic growth and, now more than ever, it is eager to boost resilience and self-sufficiency, and to strengthen scrutiny on its global tech market access. In other words, China aims to reduce its dependence on foreign markets, making domestic demand its main driver. The shift from a globalisation-driven economic model to one of domestic-led growth was already underlined by the Chinese economist Wang Jian before the 5th Plenum. He stated that it is time for China to “rely on itself for future development”, playing the role of a global manufacturing hub by importing components and then exporting finished goods to the world’s wealthiest economies.

In light of this consideration, China presented a new economic strategy as a part of the 14th FYP, by introducing the key concept of Dual Circulation: internal and external. The first component focuses on domestic production and consumption, with the second concerning the trade relationship between China and other countries. China's purpose is not to disrupt relations with foreign countries, but rather to reduce its dependence on them. The Chinese trade reliance on foreign markets was previously exposed during the global financial crisis in 2008. Therefore, the theme of economic self-sufficiency is already familiar to the Party.

A gradual increase in the level of internal consumption will only be possible through growth in incomes: without the elimination of inequalities, domestic demand will not be able to grow.

Goals Achieved during the 13th FYP Period (2016-2020)

The communique released at the end of the 5th Plenum highlighted not only future goals and proposals, but also the results achieved in the last five years, particularly in terms of stable economic growth, the trend of the absolute poverty index towards zero, the stabilisation of annual grain output, the strong improvements in the social security system (medical and basic old-age insurance), the meaningful employment growth in urban China, and the effective coordination and control work to contain the spread of Covid-19.

Additionally, the CCP stressed how these goals has been achieved thanks to a comprehensive and strict Governance system, under the banner of socialism with Chinese characteristics (中国特色社会主义).

New Reforms: Scenario and Key Contents

China has approved development goals not only for 2025, but for the next decade. Therefore, the communique refers also to the long-range objectives to be reached by 2035: the year in which China is supposed to achieve socialist modernisation (社会主义现代化). Achieving this condition was previously an aim for 2049, the year of the 100th anniversary of the People’s Republic of China.

Bringing this goal forward may be related to Xi Jinping’s next mandate. His life-long presidency (suggested by the removal of the two-term limit on the presidency) would enable him to personally implement the reforms discussed, and to achieve the status of Modern Socialist Country by 2035.

As expected, the CCP presented the goals to achieve in a scenario characterised by strategic opportunities for China, a scientific and technological revolution, the ongoing industrial transformation, and the complexity and instability of the international environment. Analysing the content of the communique, the keywords related to the proposals approved are industrialisation, computerisation, urbanisation, and modernisation.

2035 Long-Term Objectives

The proposals expressed by the CCP focused mainly on innovation and self-sufficiency in technology and science, as well as the development of strategic emerging industries. Key objectives include becoming a leader in innovative technology (semiconductors, AI, big data, microchips), promoting green and low carbon development (greenhouse gas emission reduction by 2025), prioritizing agricultural and national security modernisation, building a modern industrial system, improving Chinese cultural soft power, pursuing international cooperation, developing strategies to address the aging population, and encouraging a “peaceful reunification” with Hong Kong and Macao. Whether China will actually be able to achieve these goals within the allotted time remains to be seen, although past results such as the ones achieved during the last FYP certainly bode well.

What are the Implications for Europe?

The Chinese decision to boost domestic demand by reducing its international dependence will inevitably have consequences for Europe. Nonetheless, opportunities for collaboration will remain, mainly related to climate and sustainability, as well as openness and internationalism .

Regarding the former, since the environment has been emphasized both in the European Deal and in the 14th FYP, the two countries can intensify their cooperation related to eco-civilization. China and Europe can build a strong environmental recovery in the name of sustainable investment, protection of natural habitats and safeguard of biodiversity.

In terms of internationalism, China is aiming for increased openness in order to attract foreign investment in high-end manufacturing industry and to strengthen the security of its supply chains. The opening of the Chinese market and the exploration of new opportunities for ‘win-win’ cooperation represents a major opportunity for European investors. Of course these opportunities will depend on the measures to further open the Chinese market : technological investments, business support, economic stimulus, etc.

However, there are also potential risks for European countries, especially major exporters such as Germany. Although the creation of Chinese distribution, production, and consumption chains is already the cause of rising concern at both the European and global levels, it is expected to take place in the long-term and will probably have limited effects on production in the near-future. Although it is too early to draw conclusions on the future of Sino-European relations, China's next moves and the European response will certainly offer a more complete view.

To sum up, in the aftermath of the 5th Plenum, China perceives itself as a country aware and proud of its achievements, and establishes innovation as the driving force for the country’s modernisation. Perfecting the new Dual Circulation Strategy, presented as an opportunity to boost domestic consumption and to promote international cooperation, will be the real challenge for the country in the next several years.

Irene Sacco is a graduate of International Science and China Studies. She is passionate about Chinese culture, international trade, and intercultural communication. Irene is a freelance writer open to collaboration in writing and producing online content for Editorial Agencies, E-Journals, and Organisations focused on China.

The opinions expressed here are those of the author and do not represent the views of European Guanxi.

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