China has a chance to kick-start its economic reforms, but will Xi Jinping push ahead at key meeting?

China’s Communist Party elite convene this week to discuss ‘modernisation’ of state governance at the fourth plenary session of the 19th Central Committee

Momentum for deregulation and market opening up is building after growth slowed to record low, but Xi Jinping seen unlikely to give up control of the economy

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The last plenary session of the 19th Central Committee of the Communist Party of China, which will this year be attended by around 400 delegates including top leaders, local governors and military top brass, took place in February 2019. Illustration: Henry Wong

Published: 11:00am, 28 Oct 2019Updated: 11:15am, 29 Oct 2019

An annual gathering of hundreds of top Chinese leaders this week could provide new impetus to the country’s largely halted market-oriented reform process as Beijing is in need of serious structural changes to move its debt-ridden economy forward, analysts said.

However, Chinese President Xi Jinping is not expected to relinquish any significant control over how the country is run during the meeting of high-ranking officials, even if he does agree to some economic reforms.

The fourth plenary session of the 19th Central Committee of the ruling Communist Party will take place at a critical time for Xi as obstacles to China’s economic growth – from the trade war with the United States to a rise in labour and other costs – are increasing, potentially threatening a key source of the ruling party’s legitimacy: delivering economic prosperity.

The closed-door meeting, which will last four days from Monday, will offer Xi the chance to respond to concerns that he is scaling back the pragmatic approach to governance that was one of the most important legacies of China’s late paramount leader, Deng Xiaoping.

Xi will use the session, which will be attended by around 400 delegates including top leaders, local governors and military top brass, to tell the country and the world his vision for the direction of the Chinese economy. This is set to focus on if China will follow an increasingly state-led model with frequent government interventions or will be a more open economy with a restrained state role that allows private and foreign businesses to thrive.

Wu Jinglian, one of the key thought-leaders behind the idea that China can embrace a vibrant free market system that does not challenge the Communist Party’s grip on power, published a 12,000-word article earlier this month that reviewed China’s economic history over the past seven decades.

It urged the country’s leaders to embrace market-oriented reforms and a rule of law economic system, with the 89-year-old economist and renowned government adviser writing that Beijing must honour its commitment made in a blueprint published at the end of 2013 when the government promised to let the market played a “decisive” role in economic activities.

Wu wrote, in the article published by Caixin magazine, that the 2013 document had already put an end to the debate whether China should embrace a rule-based mature market economy or go back to the old days of a full “command economy”.