Disappointment With Third Plenum Is Premature
Image Credit: REUTERS/Carlos Barria

Disappointment With Third Plenum Is Premature


As my colleague Ankit Panda noted yesterday, the general sentiment seems to be that China’s Third Plenum was a major disappointment.

The Wall Street Journal captured this feeling with a headline proclaiming “After Long Wind-Up, Xi Delivers Anticlimax.” Over at Bloomberg View, William Pesek wrote that the meeting was a “flop.” He notes that he’s not alone, pointing out that “disappointed investors pushed Asian stocks down today.” U.S.-China Report agreed, saying “Third Plenum Disappoints.”

In my modest opinion, these views are at least premature and quite possibly mistaken. The Third Plenum communiqué appears to have served its purpose, and there is ample reason to be slightly more optimistic about reform now, as when the Third Plenum began.

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Most of the disappointment over the Third Plenum is over the lack of specifics contained in the Third Plenum’s communiqué (English translation here, courtesy of China Copyright and Media). For example, the Wall Street Journal article cited above notes of the communiqué, “the details [about how China will reform] were almost completely missing, even though the document ticked off many of the items that appear on standard lists of reform objectives for China.”

But this opinion, which has been widespread since the Plenum ended, seems to have a mistaken view of what the purpose of the communiqué is. Many observers were evidently hoping for somewhat concrete details on how the Party intended to enact the reforms that top leaders like Premier Li Keqiang and President Xi Jinping have touted since taking over the leadership of the CCP a year ago. Not surprisingly, these observers were disappointed by the communiqué.

But Third Plenum communiqué are not intended to provide these details. Instead, they are meant to outline the broad, long-term, strategic objectives of the new leadership for Party, domestic, and international audiences. As state media explained, “the communiqué, as expected, was long on goals and short on details,” but “it clearly reiterates a progressive stance for further reforms.”

The concrete details of how the Party intends to achieve these objectives will gradually come out in the weeks, months and yes, years ahead. The first such document that is expected to be released in the coming weeks will be a resolution containing the decisions that were reached at the Third Plenum. This resolution is likely being sent to local Party officials now, to give them time to internalize it before it gets revealed to the general public. Then, next month, the Party will convene the Central Economic Work Conference and Central Rural Work Conference in Beijing to further outline how to implement the decisions reached at the Third Plenum. More moves and decisions will follow.

The general point is that once placed in its proper context, the communiqué seems to do a good job of laying the groundwork for reform. As even the document’s detractors acknowledge, the CCP hit all the right notes rhetorically in naming the areas that must be reformed, and in many cases the broad directions reform must take. This is all the document is supposed to do.

But, in some cases, it seems to go further by beginning to lay the institutional groundwork the central leadership will need to ensure their reforms are implemented without threatening the Party’s rule.

The two most widely cited examples of this were setting up a central leading group for comprehensively deepening reform, and establishing a national security council. These are clearly intended to empower the central leadership to push through all the reforms that need to be implemented. This is important given the lack of reform under Hu Jintao is generally attributed to his weak central leadership. The CCP clearly have recognized that Xi needs more power if he is to successfully reform the system, and these institutions are clearly aimed at giving it to him (whether directly or via another Politburo Standing Committee member).

The state security committee, in my view, is particularly important in signaling the Party’s intentions toward reform. Much of the talk outside of China has been about how it may affect China’s foreign and military policy. Based on what’s been said about it in the communiqué and in state media, it seems to me that this body will be at least primarily tasked with upholding domestic stability (although I think Chinese leaders see the line between external and internal security becoming increasing less clear).

To begin with, the body is called state security committee, not national security council, at least in the English-language Chinese state press. Moreover, military policy was covered in a different paragraph entirely. It’s also worth remembering that the head of the Central Politics and Law Commission is no longer a Politburo Standing Committee member.

For all these reasons, the state security committee, in my estimation, is probably meant primarily to ensure stability as the reforms progress. Part of reforms the CCP is contemplating entail loosening restrictions on foreign investors and foreign influences in the country. The state security committee was likely created in part to assuage conservatives’ concerns that these reforms will set in motion forces that will ultimately undermine the Party’s grip on power. This would be in line with other recent events such as the infamous Document 9, the rumor campaign on social media and the crackdown on foreign media. Thus, I think the creation of this body—while likely boding poorly for human rights in China—signals the CCP’s serious intent to advance reforms.

Finally, there were some indications in the communiqué that the CCP is laying more of the groundwork for how it will overcome local officials’ opposition to reforms. Along with the central leading group and state security committee, the communiqué hinted at the importance of removing local government influence over local courts. Additionally, Li spent Wednesday keeping up the pressure on local governments to implement the reforms the Central Committee and/or State Council has already ordered.

It’s worth concluding by noting that none of this is to mean that the CCP will successfully push through reforms. I’m only suggesting that the communiqué should leave people slightly more optimistic than beforehand, albeit while appreciating the great uncertainties that await.

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