China's 3rd Plenum Calls for 'Reform' 53 Times... Eyes on Solutions

Repeated Mentions of Chinese-Style Modernization and High-Quality Development
Will Specific Measures Emerge at the Politburo Meeting Later This Month?

As the 3rd Plenary Session of the 20th Central Committee of the Communist Party of China (CPC), which determines the economic policy direction of 'Xi Jinping's third term,' concluded leaving only political slogans behind, attention is turning to the Politburo meeting scheduled for the end of this month. It is being closely watched whether concrete solutions related to the core tasks of Chinese-style modernization and resolving economic risks will be presented.

On the final day of the meeting, the 18th, the CPC disclosed the communiqu? of the 3rd Plenary Session of the 20th Central Committee through the state-run Xinhua News Agency, announcing that the "Party Central Committee's decision on further deepening comprehensive reform and promoting Chinese-style modernization" was adopted.

The statement released that day did not present any new economic policy tasks or directions for China. It only mentioned the major tasks of high-quality development and Chinese-style modernization through new quality production, which have been repeatedly advocated. The Central Committee emphasized, "Chinese-style modernization has been continuously promoted during the reform and opening-up process," and stated, "Facing complex domestic and international situations, a new scientific and technological revolution and industrial transformation, and the new expectations of the people, we must consciously place reform in a more important position and deepen comprehensive reform to promote Chinese-style modernization."

The goal of Chinese-style modernization was defined as the complete establishment of a high-level socialist market economy system and a socialist system with Chinese characteristics by 2035. Additionally, it was decided to complete the reform tasks determined at the meeting by 2029, the 80th anniversary of the founding of the People's Republic of China.

Alongside this, the Central Committee emphasized "reform" as a core task, mentioning it 53 times. Terms such as development (43 times), modernization (37 times), mechanisms (28 times), and Chinese-style modernization (22 times) were also frequently cited as key themes. The Hong Kong South China Morning Post (SCMP) explained, "While 'reform' means liberalization in the West, in China today it refers to governance improvement and efficiency."

In addition, the communiqu? outlined guidelines in various areas, including ▲establishing a high-level socialist market economy system ▲completing the mechanism for high-quality economic development ▲building a comprehensive innovation system mechanism ▲perfecting the macroeconomic governance system ▲completing the urban-rural integration development mechanism ▲perfecting the high-quality opening-up mechanism ▲promoting the modernization of the national security system and capabilities ▲continuing to deepen reforms in national defense and the military ▲and improving the Party's leadership level in reform and modernization.

As with typical 3rd Plenary Session statements, no specific solutions or detailed discussions were included. While accurately identifying key economic risks such as real estate, local government debt, and small to medium financial institutions, the statement only explained that "various measures to prevent and resolve risks must be implemented to fulfill the responsibility for safe production."

Ken Cheung, Chief Asia FX Strategist at Mizuho Bank, told Bloomberg that the repeated emphasis on "high-quality development" means there is no expansionary policy to promote growth in quantity. He pointed out, "Instead of surprising measures to stabilize the real estate market, the meeting only addressed tasks related to preventing and resolving risks in the real estate market."

According to usual precedent, after the conclusion of the 3rd Plenary Session, the Party gradually releases detailed content. Specific policies are more likely to be presented at the Politburo meeting scheduled for the end of this month, where the focus will be on economic issues for this year.

This meeting attracted even more market attention as it opened immediately after the release of China's sluggish economic indicators. On the opening day of the 3rd Plenary Session, the 15th, China's National Bureau of Statistics announced that the second-quarter gross domestic product (GDP) increased by 4.7% year-on-year. This figure fell short of both expert forecasts (5.1%) and the previous month's figure (5.3%). On the same day, June retail sales growth in China was only 2.0% year-on-year, significantly below the May figure (3.7%) and the forecast (3.3%).

This content was produced with the assistance of AI translation services.