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Brookings China Experts Examine Upcoming Chinese Communist Party Congress Plenum

Fred Dews
Fred Dews Managing Editor, New Digital Products - Office of Communications

November 5, 2013

  • 5 min read

UPDATE: Cheng Li and Ryan McElveen say that pessimistic views of the upcoming plenum “fail to capture the leadership’s momentum, sense of urgency, and collective understanding of the need to embark on big, bold and broad reforms to gain public support before it’s too late.”

On October 31, four Brookings China experts from the John L. Thornton China Center discussed what to expect from the upcoming Third Plenum of the 18th Chinese Communist Party Congress scheduled for Nov. 9-12. Many observers will watch this meeting for insights on how President Xi Jinping’s administration will embark on reforms affecting the second biggest economy in the world and beyond.

“Can China simultaneously loosen economically while it attempts to tighten politically?” – Jonathan Pollack

Jonathan Pollack, director of the China Center, opened the session with an overview of the reform process over the last five to 10 years. He posed a couple of key questions for the panel and audience to consider during the 90-minute session:

The third plenary session will herald in a “2.0 version” of China market development, said Cheng Li, director of research for the China Center. Li admitted that cynicism on such development existed, but thought that the current leadership has momentum behind them to make a statement on issues such as economic liberalization, fiscal reform, deregulation, urbanization, land use and the role of state-owned enterprises.

“The stakes of this November meeting for President Xi Jinping and the Chinese leadership are very high, and so are public expectations.” – Cheng Li

This sentiment resonated with Distinguished Fellow Javier Solana, who re-tweeted select remarks after the event.

David Dollar, previously a U.S. Treasury representative in Beijing, takes a more cautious and contrasting approach to the potential of the third plenum. Dollar, now a senior fellow at Brookings, told the audience that while he expected to hear more detail about fiscal and financial reforms, he will also pay attention to how reforms are implemented over the following months.

“I am cautiously optimistic that at the third plenum or shortly afterwards well see some very concrete reforms in the fiscal sector and in fiscal policy.” – David Dollar

Erica Downs, an expert on China government-business relations, focused her remarks on how Chinese companies will react to potential plenum-influenced changes toward a growth model focused on productivity and consumption.

Downs also focused on how these changes will affect U.S. businesses, particularly regarding trade.

Brookings Senior Fellow Kenneth Lieberthal, seated in the audience, asked the panelists if potential trade agreements between the U.S. and China can be a point of leverage for reforms, and if there are potential stumbling blocks if and when the U.S. Congress considers such proposals.

“The United States is likely to remain an increasingly important destination for Chinese companies.” – Erica Downs

Dollar remarked that if the U.S. and China can establish trade agreements with each other, it would be a powerful statement on the status of global affairs and that Congress should understand such implications.

Other highlights from the panel discussion included an exchange on what parts of the plenum would have greater impact: announcing the intent of reforms or actual implementation of reforms. Li argued that if the plenum results in an outline of the direction reforms will take, particularly in regard to economic liberalization, that would be as important a step as implementation would be.

Another theme from the panel was the need for greater openness: economic openness, freedom of movement and freedom of the press are necessary for China to establish an innovation-led economy that can grow.

After the panel, David Dollar (@DavidRDollar) answered questions on Twitter regarding some of the economic reforms mentioned during the discussion:

Event audio is available.

Tina Trenkner compiled this event summary and also managed the Twitter chat. Colleen Lineweaver also contributed to this post.

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