HONG KONG (AP) - One of China's most pivotal meetings is set to commence on Monday, where President Xi Jinping and top Communist Party officials will convene in Beijing for the fourth plenary session. This gathering, lasting four days, aims to finalize China’s five-year plan for 2026-2030, a critical blueprint for the country's economic and political direction.
This closed-door meeting, involving approximately 370 members of the Communist Party's central committee, serves a significant role. It not only aims to unite party officials and the public behind governmental objectives but may also herald personnel changes. Consequently, the details of the meeting, including any shifts in leadership, may not surface for days or even weeks. The complete plan will likely be disclosed during the National People’s Congress's annual session in March.
The current political landscape compels the Chinese leadership to address various challenges, especially amidst escalating trade tensions with the United States under former President Donald Trump. These tensions have intensified significantly since his administration took office. The meeting occurs in advance of a potential summit between Xi and Trump, further underscoring the urgency of these discussions.
Looking ahead to the 2026-2030 five-year plan, economic growth forecasts suggest that China's economy is expected to expand by 4.8% this year, closely aligning with China's official growth target of around 5%. Despite efforts to stimulate consumer spending and investments while addressing excess industrial capacity, the economy faces headwinds from the prolonged trade conflict and ongoing domestic issues.
Among the primary objectives highlighted in the upcoming five-year plan are the acceleration of consumer spending, business investment, and the promotion of technological self-sufficiency. This is particularly pressing as reliance on U.S. computer chips becomes increasingly precarious with tightening American export controls and rising tariffs. Consequently, there may be greater investments aimed at enhancing technological capabilities, especially in areas like artificial intelligence.
Economists, such as Leah Fahy from Capital Economics, speculate there could be vital discussions regarding strategies to boost consumption. The government has previously implemented incremental policies, including subsidies for childcare and consumer incentives for electric vehicles. However, there are indications that significantly bolder measures may be necessary to restore consumer confidence, which has been shaken by a previous property market collapse.
In light of the economic landscape post-COVID-19, China struggles to revive robust growth, exacerbated by a downturn in the property sector that has resulted in widespread layoffs and diminished household spending. Wendy Leutert, an Indiana University economist, emphasizes that investments in essential areas like healthcare, education, and care for the elderly and children are still lacking. Addressing these immediate concerns may be critical for sustainable economic recovery.
As China confronts the dual challenges of increasing international friction, particularly with the U.S., and internal demographic shifts—including a declining and aging population—it faces additional burdens. Current statistics show an unemployment rate of nearly 19% for young workers aged 16-24, limiting their economic contributions.
Aiming to double its economy by 2035, the Chinese leadership recognizes the importance of maintaining a growth rate between 4% to 5% over the next decade. However, experts suggest this goal may be overly ambitious amid these shifting dynamics. Ultimately, the ruling party remains focused on demonstrating its capacity to provide improved living standards, solidifying its legitimacy amidst growing economic pressures.
