China’s Third Plenum Is Long Overdue. That’s a Red Flag.

Recent Features

Features | Politics | East Asia

China’s Third Plenum Is Long Overdue. That’s a Red Flag.

The absence of the Third Plenum is consequential and dangerous for China; it both reflects a notable divide within the CCP and causes greater political instability.

China’s Third Plenum Is Long Overdue. That’s a Red Flag.

Delegates attend the closing ceremony of the 20th National Congress of China’s ruling Communist Party at the Great Hall of the People in Beijing, Oct. 22, 2022.

Credit: AP Photo/Ng Han Guan

For observers of Chinese politics, the most significant development in the second half of 2023 was not what occurred, but rather what failed to happen: The 20th Central Committee’s Third Plenum, which typically takes place in late October or early November the year after the National Congress of the Chinese Communist Party (CCP), was notably absent. 

The CCP is a party of rhythm, adhering to routines and cycles in its organizational processes. It usually follows a five-year cycle for National Party Congresses. Since the Cultural Revolution, the CCP has hosted Party Congresses in years ending with 7 and 2. 

These congresses represent the most prominent gatherings for the CCP, where representatives of all party members convene in Beijing. The general secretary – currently Xi Jinping – initiates the proceedings with a Party Work Report, summarizing the achievements of the past five years. Subsequently, party representatives participate in the election of the new Central Committee and Central Committee of Discipline Inspection, even though the list is likely predetermined. Following this, party representatives vote on amendments to the Party Constitution. 

Immediately following the National Party Congress, the CCP convenes the First Plenum of the new Central Committee, tasked with electing crucial party positions, including the general secretary, members of the Politburo, and its Standing Committee. Additionally, Politburo Standing Committee members nominate officials for the Secretariat of the Chinese Communist Party and the Central Military Commission. 

The Second Plenum takes place in the spring following the first plenum, just before the Two Sessions. During this session, the CCP nominates officials for the new government, the National People’s Congress, and the Chinese People’s Political Consultative Conference. These nominations encompass positions such as premier, State Council members, and ministers. 

The Third Plenum, typically occurring in the fall of the same year, is dedicated to promoting new national and party-wide reform agendas. The Fourth Plenum focuses on essential party-building, state governance, and political-legal issues. The Fifth Plenum centers on the economy and approves Five-Year Plans. The Sixth Plenum addresses critical party ideological matters. The Seventh Plenum, occurring just before the next National Party Congress, is dedicated to preparing for the upcoming congress, which leads to the start of a new five-year cycle. 

To provide a concrete example, the previous Central Committee (the 19th) was appointed at the National Party Congress in October 2017. It held its First Plenum in October 2017, its Second Plenum in January 2018, its Third Plenum in February 2018, its Fourth Plenum in October 2019, its Fifth Plenum in October 2020, its Sixth Plenum in November 2021, and the Seventh Plenum in October 2022.

The CCP strategically utilizes the Third Plenum to champion its reform agenda, designating it as the party’s top priority for the next five years. Among these, the 11th Central Committee’ Third Plenum in 1978 stands out as particularly consequential, marking Deng Xiaoping’s announcement of his groundbreaking economic reform plan. In recent decades, the Third Plenum has also served as a signal for the direction the CCP intends to take during the term of each Central Committee. 

The 16th Central Committee’s Third Plenum in 2002 played a crucial role in passing measures to further liberalize the domestic economy, following China’s entry into the World Trade Organization the previous year. Similarly, the 17th Central Committee’s Third Plenum in 2008 focused on rural policy reform, aiming to accelerate the implementation of the Socialist New Village policy – a trademark initiative of Hu Jintao designed to address urban-rural inequality. The 18th Central Committee’s Third Plenum in 2013 unveiled newly appointed General Secretary Xi Jinping’s ambitious plan for comprehensive reform, encompassing areas such as deepening the market economy, reforming state-owned enterprises, and restructuring the fiscal system. 

The 19th Central Committee’s Third Plenum in 2018 deviated from the usual fall schedule, occurring in the spring immediately before the Two Sessions. This particular plenum outlined government institutional reforms in critical areas, including environmental protection, agriculture, and market regulation.

The Plenum Process

Each plenum serves as a forum for consensus, with the report reflecting unanimous support from the entire party leadership after months of careful deliberation. The party leader wields the authority to determine the topic for the upcoming plenum, a decision that involves extensive contemplation over an extended period. 

As an illustration, Xi Jinping initiated considerations for the 19th Central Committee’s Fourth Plenum’s topic immediately after the Third Plenum, nearly a year before the actual drafting process commenced. Generally, the drafting process for the plenum report initiates in the spring, at least six months before the scheduled plenum. 

Once Xi announces the topic in a Politburo meeting, the CCP selects a drafting committee, headed by Xi and comprising top party leaders and experts. Xi actively engages in the drafting process, establishing the thematic framework for the final report. Following the first meeting, the drafting committee dispatches research teams nationwide for fieldwork. Simultaneously, CCP leadership instructs lower party organs to deliberate on the plenum topic and provide feedback. Inclusionary measures involve inviting selected non-party members to offer their perspectives, with recent initiatives even incorporating internet polls to gather opinions from a broader audience. 

Over the next few months, the drafting committee incorporates feedback from lower party organs and fieldwork into the initial draft, with Xi playing a central role in editing alongside committee members. Following the completion of the first draft, the Politburo Standing Committee provides comments during its meetings. After Standing Committee approval, the entire Politburo reviews and endorses the draft. Subsequently, Xi announces the draft during a study session for provincial and ministerial leaders, gathering their insights and comments. 

At this stage, the draft transforms into a commenting draft, primed to receive input from a broader CCP audience. Following approval from the party’s central leaders, the committee disseminates the commenting draft to various government agencies and heads of China’s military regions, allowing Xi to gather comments from local officials and the military. Notably, party seniors also offer feedback and endorse the draft during the summer Beidaihe meeting. Extending the consultation process beyond party members, Xi conducts meetings with representatives from the CCP’s satellite parties, people’s organizations, and non-party experts, seeking their valuable opinions.

After assimilating the feedback from the commenting draft, both the Politburo Standing Committee and the full Politburo engage in the process, providing comments and ultimately approving the final draft. The culmination of this meticulous process results in the official announcement of the final draft during the plenum. (For an example of the National Party Congress/plenum report drafting process, please see here.)

Where Is the Third Plenum?

Given this background, we can conclude that the delay in holding the Third Plenum – which is now over five months late, based on recent precedent – is a sign of a notable divide within the CCP, particularly among its top leaders. 

Xi Jinping sees the Third Plenum as an opportunity to chart the direction for China, especially after securing his historic third term in the 20th Party Congress. Based on Xi’s “dual circulation” and “common prosperity” initiatives, one can conclude that Xi’s preferred agenda for the Third Plenum involves wealth redistribution, self-reliance, and technology development to transition the economy to a domestic consumption model based on innovation.   

However, since the 20th Party Congress, Xi has confronted significant challenges related to the conclusion of the zero-COVID Policy, economic recovery, and China’s complex relationship with the United States. In addition, Xi’s attempt to regulate the real estate and the tech sectors are the direct cause of the current economic difficulties. This confluence of issues has prevented the party from reaching a consensus on how to navigate these challenges. 

Reports from Nikkei indicate that during the Beidaihe meeting in the summer of 2023, a faction of party seniors, led by former Politburo Standing Committee member Zeng Qinghong, expressed dissatisfaction with Xi Jinping. This group reprimanded Xi and demanded effective countermeasures to address the economic, social, and political turmoil in China. 

The lack of agreement within the CCP’s top leadership has likely contributed to the postponement of the Third Plenum, as divergent perspectives on crucial issues need to be reconciled before a unified direction can be set for the country.

The Implications

The absence of the Third Plenum is consequential and dangerous for China; it causes political instability due to confusion among officials. 

Since 2023, Chinese governments at all levels have initiated policies to create a more favorable investment and business environment. At the central level, the government dismantled barriers to market entry and eliminated unfair procurement practices. In addition, various local governments compete to attract investments by offering competitive terms such as tax breaks and discounted land; localities even brought back targets for investment attractions. As a result, some local party secretaries spent more time traveling around China to meet with business executives than working in the office. 

However, local officials are still unsure about the center’s policy direction. One official said that even though governments are working on attracting investments, they don’t know how long the policy will continue. They are afraid that a new directive from Beijing will waste all their efforts. 

In addition, despite harboring enthusiasm to attract investments, local governments are reluctant to initiate new growth policies, particularly as their reliance on the old land-based approach reaches an impasse. Fearful of aligning themselves against the political tide, especially since the current politics emphasizes loyalty over competence, as evident in Xi’s anti-corruption campaign, cadres hesitate to champion new initiatives.

The business community certainly shares this feeling of uncertainty. Many businesses believe China now is a “buyer’s market” due to government investment support policies. However, despite the positive sentiments, a considerable number of businesses remain hesitant. Businesses want predictability, something they cannot find in China today. 

The uncertainties of recent years have instilled a cautious approach, prompting these businesses to await more definitive signals. Business people fear that a deal made today with local governments might not be implemented due to sudden political change. If that happens, they can only accept the investment as a lost cause, given their lack of protection from the government. In the worst-case scenario, they might find themselves facing heavy-handed regulations like the tech sector crackdown. 

The Communist Party is like a shark; once it stops moving, it dies. Currently, China is not moving; it is finding new directions. People have attempted to decipher the recent Two Sessions and find directions in Premier Li Qiang’s government work report. While Li’s report said the right things, it lacks a clear sense of direction; it reads more like a summary of Xi Jinping’s speeches. 

Consequently, a prevailing sense of uncertainty will persist until an authoritative signal from Beijing, possibly through a party plenum, announces China’s new direction.