Photo/Illutration The Chinese Communist Party's Central Committee held its third plenum at the Jingxi Hotel in Beijing from July 15 to July 18. (Asahi Shimbun file photo)

No matter how much the word “reform” is repeated by the Chinese leadership, if it’s all talk and no action, China’s slowing economy will inevitably stagnate further.

The administration of President Xi Jinping is facing a test. It needs to provide effective leadership to revitalize the economy and improve people’s livelihoods, a key challenge.

The third plenary session of the 20th Central Committee of the Communist Party of China was held July 15-18 in Beijing. On the final day of the session, the Central Committee adopted a communique outlining policies aimed at “Further Deepening Reform Comprehensively to Advance Chinese Modernization.”

The Communist Party selects its leaders at the party congress held every five years. The party then determines party personnel in the new Central Committee’s session, which follows the congress.

It decides on state apparatus personnel in the second session, and it then outlines policy directions in the third plenum.

Several third plenums in the past are remembered for being turning points. They pushed through reforms that shifted China from a planned economy to a market economy.

The 1978 session marked the starting point for reforms and China’s opening-up, a series of economic reforms initiated under then-supreme leader Deng Xiaoping’s leadership. The 1993 plenum launched enhanced efforts to promote the unique “socialist market economy” model, which combines elements of socialism and market capitalism.

This time, the word “reform” appeared 53 times in the approximately 5,000-character communique. However, there is skepticism about how many policies truly worthy of the name will be implemented.

The current top priority should be responding to the economic downturn in China. This was primarily caused by the real estate market slump, which is not just a short-term problem.

A growing number of local governments are facing a fiscal crunch due to shrinking land revenue, a dire situation that requires comprehensive fiscal and tax reforms.

The communique called for measures to prevent and defuse risks in key areas such as real estate, local government debt, and small and midsize financial institutions. However, it did not include proposals for policies that might achieve that.

Moreover, given the rapid aging of the population amid a low birthrate, the administration should also offer a new vision and blueprint for revamping the nation’s social security system.

The system is underdeveloped and not all citizens are adequately covered by it.

On the other hand, the communique said: “The overall objectives of further deepening reform comprehensively are to continue improving and developing the system of socialism with Chinese characteristics and to modernize China’s system and capacity for governance.”

This is almost, as if to say, the crux of the matter is to make the Communist Party’s control even more solid and unshakable.

The third plenum, held in 2013 during the first term of the Xi administration, advocated setting up and following the rules of a market economy, raising hopes domestically and internationally.

But it turned out that most of that session’s proposals for reform were empty promises. The state-owned enterprise sector was strengthened through mergers and other consolidations, while private-sector businesses were often suppressed for the administration’s political purposes.

Since then, the Xi administration has prioritized national security over economic development. We are concerned that this approach will continue in the administration’s third term, following this third plenary session.

Developing a free and dynamic economy so that the nation’s 1.4 billion people can live securely is the direction that truly fits the description of real reform.

--The Asahi Shimbun, July 21

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