The third plenum has historically been a platform for announcing reform—political and economic. Here’s what you need to know about November’s meeting.

With the Chinese Communist Party’s main event over—last November’s leadership transition—officials and party leaders will meet this November at the CCP Congress’ third plenary session.

While some analysts have said that the leadership could lay out an economic reform agenda at this meeting, no one is sure what will happen this year. But we can look at patterns of policy and political decisions made at past sessions. To that end, the US-China Business Council staff has put together answers to frequently asked questions about the third plenum and its importance in China’s political system.

What is the third plenum? 

A “plenum” is a meeting of the Chinese Communist Party (CCP) leadership. This meeting, to be held in November, is the third plenary session in the five-year cycle of party leadership meetings launched at the high-profile November 2012 CCP Congress.  That meeting—known formally as the first plenum of the 18th CCP Congress—named the party’s leadership for the 2012-17 period. The second plenum was held in February 2013.

How often does this type of meeting occur?

The CCP typically holds one plenary session per year, usually in the fall. The exception to this is the first year of the five-year cycle, which generally includes an additional plenum in early spring prior to the March National People’s Congress meeting to prepare for the government leadership transition that takes place during that meeting.

When is the third plenum scheduled to take place?

Specific dates have not been formally announced, but the CCP Politburo – a 25 member committee of China’s top party leadership—recently stated that the third plenum will take place in November 2013.  Recent third plenums have run approximately four days. For comparison, the last two third plenums occurred October 11-14, 2003 (16th CCP Congress) and October 9-12, 2008 (17th CCP Congress).

Who are the main players?

The third plenum will involve all of the CCP’s top leadership, including General Secretary Xi Jinping and the members of the Politburo and its seven-member Standing Committee. Participants in these meetings will come from the more than 200-member Central Committee elected at the November 2012 CCP Party Congress.

In addition to the official participants, other Chinese officials will play a role in preparing the meeting agenda and reports.  For example, Liu He, head of the CCP’s Finance and Economics Leading Small Group and newly named deputy director of the National Development and Reform Commission, is expected to be involved in preparations for this meeting.

Why is the third plenum significant?

In general, the new leadership has often used the third plenum to unveil its policy plans and priorities and to launch political and economic reforms. The third plenum of the 11th CCP Congress, in December 1978, confirmed the leadership of Deng Xiaoping and marked the beginning of “reform and opening” in China’s economy.  More recently, the third plenum of the 14th CCP Congress in November 1993 formally endorsed China’s “socialist” market economy, laying the foundation for significant economic reforms led by then-Premier Zhu Rongji.

While most analysts expect this year’s third plenum to announce only modest reforms, the plenum represents an important focal point for debates and discussions about reform.

What is supposed to happen at the plenum and what should we be watching for?

The full schedule of discussions has yet to be announced and can vary considerably from plenum to plenum. At the third plenum of the 17th CCP Congress, for example, topics included rural reform and development, financial reform related to agriculture, and the impact of the global financial crisis on China. The highlight of this plenum will likely be a work report from the Politburo, delivered by Xi, that will review the priorities and progress for the CCP’s top leadership made since the last plenary session, as well as goals and plans going forward.

According to Chinese media reports, the party has created seven working groups consisting of government officials and policy advisors to submit reform proposals for discussion on the following topics:

  • Banking and financial sectors
  • Fiscal and tax systems
  • Land use rights
  • Production factor prices
  • Administrative examinations and approvals
  • Social injustice
  • Household registration system (hukou)

Other areas that have previously been discussed under the reform umbrella include the role of state-owned enterprises (SOEs) in the economy, bureaucratic restructuring, and tax reform. Foreign and domestic observers will be watching closely to see what reforms actually occur in these areas, how substantive they may be, and what they may signal about the status—and outcomes—of internal debates about the direction of reform.

For foreign companies, the focus remains on how those reforms may address key foreign company concerns, such as creating a level playing field for both domestic and foreign companies, ending discriminatory licensing and technology policies, and reducing ownership restrictions on foreign companies in China.

[author] Ryan Ong ([email protected]) is director of business advisory services at the US-China Business Council. USCBC is the publisher of the China Business Review. [/author]

(Photo by Jean Wang via Flickr)

Posted by Christina Nelson