Adding to the internal problems are trade restrictions imposed by the European Union and the United States to protect their markets from cheap Chinese products, which they say represent unfair competition.
In this context, the Communist Party of China (CPC) is holding the third plenary session of the Central Committee from Monday to Thursday, a meeting chaired by Xi Jinping that was initially scheduled for last October.
This meeting of the Central Committee is intended to define the country’s main economic orientations for the next five years.
The tradition dates back to 1978, when the then leader Deng Xiaoping introduced the reforms during the third plenary session of his mandate that would allow China’s meteoric economic growth in the following decades.
Analysts expect measures to support economic activity from next week’s plenary session.
Xi Jinping said last week that the CCP was planning “major” reforms, although the word “reform” under his rule has typically referred to adjustments rather than major policy shifts.
Reform, not rupture
“The Chinese government has struggled to implement a successful economic strategy since the end of the pandemic,” said Andrew Batson, an analyst at Gavekal Dragonomics.
“There is therefore a lot of hope that this third plenary session will bring progress,” he added.
But there is no reason to expect a “break” with the path forged so far by Xi, who has prioritized national security over economic growth, he said.
“Reform is not about changing direction,” the People’s Daily, the CCP’s official newspaper, said on Monday.
The start of the meeting is expected to coincide with the publication of China’s second-quarter growth data.
A group of experts surveyed by AFP estimates an average year-on-year increase in GDP between April and June of 5.3%, which would be in line with the 5% target set this year by the Chinese government.
While this is an enviable performance in many countries, it is far from the double-digit growth that made China the world’s second-largest economy.
“Common prosperity”
Economic activity continues to be hampered by the over-indebtedness of the real estate sector, a traditional pillar of growth that represented a quarter of the country’s wealth.
Short-term support measures are “absolutely necessary” to revive a “faltering economy,” said analyst Ting Lu of the Japanese bank Nomura.
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