What is the Chinese Communist Party’s third plenum?

Between July 15th and 18th members of the Central Committee of the Communist Party are meeting for its third plenum, an event that happens roughly every five years. What is this conclave and why does it matter?

Plenums usually happen seven times in the Central Committee’s five-year tenure. But the third plenum usually attracts particular attention: it is sometimes used to give a boost to reforms in the world’s second-largest economy. In 1978 Deng Xiaoping used it to introduce reforms that set a poor and insular China on the path to becoming an economic superpower. In 1993 the third plenum established a framework for building a “socialist market economy”. And in 2013 Xi Jinping used it to set in motion the abandonment of the one-child policy and to encourage private investment in state-owned businesses.

Along with shifts in policy, the meeting can be an occasion for announcing changes in personnel. The defence establishment has been in turmoil for almost a year. Two former defence ministers, Li Shangfu and Wei Fenghe, were expelled from the party last month for corruption. The plenum may discuss their cases and others, including that of a former foreign minister, Qin Gang, who is a member of the Central Committee. His expulsion may be announced at the gathering.

Plenums are held at the military-run Jingxi Hotel in Beijing, a place known for its high security. Attendees will discuss policies in private meetings led by the Politburo—although it is thought that most big decisions are actually made long before. Shortly after the conference ends, a cryptic communiqué on its findings will be issued through state media.

That will be closely scrutinised. This year’s session will focus on “comprehensively deepening reform and advancing Chinese modernisation”, according to Xinhua, a state news agency. Businesspeople will be hoping for suggestions of new fiscal reforms and measures to boost confidence in private companies, which account for 60% of GDP. They will also be keen to see if there is more support for advanced manufacturing, such as solar power, computer chips and electric vehicles.

This third plenum comes at a pivotal moment. A corrosive crisis in the property sector has deepened and spread. In May the government announced a rescue package for the sector, including cheap loans worth 300bn yuan ($41.3bn) to help local governments purchase existing housing projects. But the rescue policy has not worked. On July 15th, the first day of the plenum, official data showed new-home prices fell by 4.5% in June compared with a year earlier—the steepest drop for nine years. That is a blow to local governments, which rely on land sales, and to consumer confidence, which remains near pandemic-level lows. Growing protectionism will hinder the economy, too. The European Union, for example, raised tariffs on Chinese electric vehicles on July 4th.

At a big economic meeting in December senior party members said they were considering a “new round of fiscal and tax reform”. Details of this are unlikely to be unveiled in the communiqué, but may become clearer in the weeks ahead. The party normally publishes a fuller account of the meeting a few days after its conclusion. Whatever is announced, reigniting confidence in China’s ailing economy will not be an easy task. ■