Party Central Committee's third plenum raises reform expectations

Next month's third plenum promises to be a milestone in China's political history, given the significance of previous such meetings since 1978

PUBLISHED : Monday, 14 October, 2013, 12:00am
UPDATED : Monday, 14 October, 2013, 6:13am

The drama and intrigue of politics has been China's focus for much of the past 12 months, from the 10-yearly leadership transition to the biggest political scandal in decades, replete with merciless internal fighting.

But with the gripping trial of Bo Xilai over and the former Chongqing party chief sentenced to life in prison, the Communist Party's new leadership has switched its attention to the country's future as it prepares for a keynote meeting next month that will set the policy agenda.

The third plenum of the Central Committee, the Communist Party's decision-making body, may sound mundane, but previous third plenums have marked major turning points in the political history of modern China. And there are hopes that this one will mark another milestone.

How did the third plenum come to be so significant? Historians point to the conclave of 1978. Two years after Mao Zedong's death, the party and the nation were on a knife-edge, poised between the rival philosophies of vice-premier Deng Xiaoping and the conservative faction headed by Hua Guofeng, the party chairman, who remained staunchly faithful to the "great helmsman".

With the victory of the Deng credo - "practice is the only test of truth" - over Hua's "two whatevers" (support whatever policy decisions Chairman Mao made and follow whatever instructions Chairman Mao gave), the meeting marked a step away from the mantra of socialist revolution towards economic development.

China has since prioritised a modernisation that is ruthlessly pragmatic and non-ideological, and historians see the events of the plenum as the catalyst for the transformation of what was an economic backwater into the world's second-largest economy.

Today, analysts say China is at as critical juncture as it was 35 years ago and that the new leadership under Xi Jinping faces a make-or-break choice at the plenum.

China is suffering bottlenecks in economic and political development, and a looming crisis is closing in from all sides. Its political system has grown inadequate for dealing with the complicated and sometimes contradictory needs of the mainland's economy and society. "The upcoming third plenum will give the first strong indication of how successfully Xi can impose his mark on the party's policy agenda," said Deng Yewen, a former deputy editor of the Study Times, a key publication run by the Central Party School.

Xi has ignited expectations through a series of initiatives to change the way officials work and step up the war on graft since he took power in November. However, as the son of a revolutionary leader he has also cast himself as a resolute defender of absolute Communist Party rule, leaving many China watchers and even insiders increasingly puzzled about what direction he will push for at a time even he describes as a crossroads for the nation.

Most analysts remain cautious about the possibility of a breakthrough in political reform at next month's conclave despite the increasingly contentious and delicate social environment.

"Whatever they do, Xi Jinping and [Premier] Li Keqiang must come up with answers to a series of imperative questions facing the nation," said Zhang Lifan, a political affairs analyst formerly with Chinese Academy of Social sciences.

For how they might go about that, it may be useful to look to third plenums since the 1978 meeting, which analysts say was also ultimately responsible for the 10-year political cycle under which a new generation of leaders is appointed once a decade.

Under the system, which is becoming increasingly established and institutionalised, the party holds a national congress every five years. The congress is responsible for electing the Central Committee, which adopts the number of the congress that elected it; the 18th Central Committee is in office now.

Between congresses, the Central Committee meets for plenums or plenary sessions. While these usually take place annually, in the first year two such meetings are held to discuss personnel matters for the government and party leadership.

By the time of the third plenum, the new leaders have typically consolidated power and reached consensus on their major economic policies and direction.

Xu Ping, a professor with the Central Party School's department of party literature and history, said that a study of the themes of the third plenary sessions in the past three decades showed that each leadership used the meeting to steadily push forward economic reform.

In his study, Chang Xiuze, an economist with the Macroeconomic Research Institute of the National Development and Reform Commission, said the third plenary sessions of the 11th, 12th, 14th and 16th Central Committees all played a significant role in structural economic reforms. They mark what he called the four stages of structural reform: the start-up stage, the implementation stage, construction of the framework of a socialist market economy, and full implementation of the socialist market economy.

After the 1978 meeting, China began to ride on a wave of reform and changes. By the time the 12th Central Committee held its third plenum in 1984, the party leadership under reformist general secretary Hu Yaobang had made the historic decision to abandon the long-held communist concept of a planned economy and begin what was called the urban economic reform.

Before that year, China's reform was largely limited to experiments in rural areas, allowing farmers to take contracts for the land they worked. The same year, Beijing also began to allow companies to issue stocks.

At the third plenum of the 14th Central Committee in 1993, the leadership under Jiang Zemin approved Deng's concept of building a "socialist market economy", based on ideas that Deng put forward in his high-profile "southern tour" earlier that year.

At the third plenum of the 16th Central Committee in 2003, Hu Jintao put his distinct stamp on policy when the party conclave approved his "scientific concept of development", which, according to Joseph Fewsmith, director of the East Asian Studies Programme with Boston University, indicated "a greater concern with balanced growth and the social dimensions of economic development".

Party historians agree that the historic nature of the meetings in 1978 and 1984 may have been no more than a coincidence. But since the 14th national party congress formalised the system of having leaders serve two five-year terms, it has become routine practice for the third plenum to involve the announcement of a major reform package.

"The party's 10-year political cycles have made the plenary session in the second year of a new leadership a crucial one. We have good reason to expect the upcoming third plenum will be another significant event in party history," said historian Xu.

"The third plenum is where we can learn what the new leaders stand for," said Xigen Li, associate professor with the department of media and communication at the City University of Hong Kong. Li says the world will closely watch what happens when the 205 full members and 171 alternate members of the Central Committee gather in a guest house in Beijing's western suburbs next month.

But Li said there was another lesson to be drawn from previous third plenums: expect disappointment on political reform.

"What did not happen in these significant plenary sessions proved to be as important as what did, if not more so," Li said.

Lu Ting, chief China economist with Bank of America Merrill Lynch, also warned that hopes for reform might dim after the party conference.

"It's true there were a couple of important third plenary sessions in history, but it does not mean the once-in-every-five-years third plenum should always be significant," Lu said in his research report on the event.

Dali Yang, a professor of political science with the University of Chicago, said: "Since 1978, the third plenums have been occasions for national leaders to set forth their reform agendas.

"They have had a nice but short honeymoon but to need to demonstrate their initiative and commitment to genuine reform. If done well, the coming plenum could help build new momentum for reform and development at time of slowing economic growth."

Yang, also faculty director of the University of Chicago's centre in Beijing, added: "If they disappoint, it could potentially accentuate the already sharp social divisions in China."


What past third plenums decided

1978: 11th Central Committee under Hua Guofeng (launched by Deng Xiaoping): begins China's reform era

1984: 12th Central Committee under Hu Yaobang: reform moves from the countryside to the cities

1988: 13th Central Committee under Zhao Ziyang: price and wage reform

1993: 14th Central Committee under Jiang Zemin: plan for systemic market reform

1998: 15th Central Committee under Jiang Zemin: build a socialist new countryside

2003: 16th Central Committee under Hu Jintao: scientific concept of development.

2008: 17th Central Committee under Hu Jintao: further rural reform.

2013: 18th Central Committee under Xi Jinping: ?