China’s Fifth Plenum Yields More Questions than Answers

Q1: What was the purpose of the meeting?

A1: The Chinese Communist Party (CCP) just held the Fifth Plenum of the 18th Central Committee. Presided over by General Secretary Xi Jinping, plenums are held at least annually and bring together the CCP's top leadership to discuss and announce policy and personnel decisions. The Third Plenum, held in November 2013, adopted a major decision calling on the country to adopt wide-ranging market reforms. The Fourth Plenum, held a year ago, focused its attention on developing the legal system and rule of law, although in practice, the law serves more to enable CCP rule than provide rights to citizens or make the government more accountable. The gathering placed its focus on adopting a general outline for China's 13th Five-Year Plan, which will guide the economy from 2016 to 2020. It also highlighted the continuing toll of President Xi’s anticorruption drive by announcing the expulsion of several leading CCP members.

Q2: What did the plenum decide about the next five-year plan?

A2: We still only have a glimpse of the plan. The plenum adopted a short summary of it, called a "proposal" (jianyi), but it likely won't be released for another week, and the full plan won't be issued until March. However, based on the plenum's communique, issued last Thursday, we can expect four things out of the plan: 1) The plenum said the plan would attempt to achieve "moderate-to-high growth," which differs from the goal under the current plan to achieve "stable relatively fast" growth; this means the growth target will likely be reduced from 7.0% to 6.5%, a modest admission that the era of turbo growth is over; 2) Although there were repeated mentions of "reform" and "openness," there was not the same emphasis on markets that was in the Third Plenum decision from two years ago. This suggests that the concern about slower growth may be leading the Party to adopt less ambitious policies. For example, there was no mention of state-owned enterprise reform in the communique; 3) The basic idea of creating a prosperous society with a more innovation-driven economy, cleaner environment, and stronger social safety net has not changed, but the leadership will pursue these goals through recently adopted policy initiatives, including "Made in China 2025," the Internet of Things, big data, the expansion of services, domestic regional integration, and development of ties to Southeast Asia, Western Asia and Europe (the "Belt and Road"); and 4) Although there was mention of the importance of keeping China's economy open to foreign business, there was equal stress on China being internationally competitive and playing a larger role in global economic governance.

Q3: How significant was the announcement ending the one-child policy?

A3: The announcement was significant in bringing to a close one of the most controversial policies China had in place for three and a half decades. In the late 1970s, given the rapid rise in population during the Mao era, the policy seemed necessary. But demographers have shown that the fertility rate had already started to decline in the 1970s, and that as Chinese became more wealthy and urban, the fertility rate declined even further, making the policy even less justifiable. The switch to a two-child policy is unlikely to have much effect in slowing the greying of the population or improving the gender imbalance, both of which are likely to generating increasing problems for the country in the coming decades. A more ambitious effort would have been to eliminate family planning altogether, but that would go against the regime's predilection to keep some sort of controls over Chinese society.

Q4: Do the plenum results say anything about Xi Jinping’s political standing and the stability of elite politics in China?

A4: Only that uncertainty reigns. The Plenum made no senior personnel announcements that might clarify the direction of the regime’s high politics. Some possible high-level promotions and reshuffles had been speculated for months, but the black box of CCP leadership wrangling makes it impossible to know whether Xi sought major changes or not. Moreover, compared to some previous CCP plenums, Western and Hong Kong media were surprisingly quiet in the run-up to the conclave regarding possible personnel permutations. Still, the fact remains that the absence of movement represents a missed opportunity to signal to the bureaucracy of a clear political bearing.

Given Xi’s likely belief that controlling personnel assignments in the run-up to the 19th Party Congress in 2017 is critical to the rest of his agenda, stasis on the personnel front may further distract Xi’s attention from pushing forward reform. In fact, the continued inertia could prompt Xi to consider more dramatic moves, such as further takedowns of retired or sitting senior leaders under the anticorruption drive, a more pointed assault on the party bureaucracy, or an effort to stage a bold demonstration of his political power. Such uncertainty, and its possible attendant leadership discord, would only serve to exacerbate doubts in the global community about the leadership’s commitment to prioritizing the economy coming off the turbulence and volatility of recent months.

Christopher K. Johnson holds the Freeman Chair in China Studies at the Center for Strategic and International Studies (CSIS) in Washington, D.C.
Scott Kennedy is deputy director of the Freeman Chair in China Studies and director of the Project on Chinese Business and Political Economy at CSIS.

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Scott Kennedy
Senior Adviser and Trustee Chair in Chinese Business and Economics