The long-lost 3rd plenary session has been found. The top-level meeting on economic planning is now due to take place in July – nine months later than expected. Xi announces “reforms”, but from his mouth this could just as easily mean closing the markets and more repression.
China observers have long wondered how the Central Committee functions under Xi Jinping. Normally, the economic plenum should have come before the People’s Congress in March, or even better before the planning conferences in winter. After all, what should the planning guidelines be based on if not economic guidelines? In her analysis, Christiane Kühl explains what lies behind this.
Meetings between China’s President Xi Jinping and Emmanuel Macron always make the German government a little nervous at the moment. France then pursues different interests towards China than Germany. For example: Paris prefers to keep Chinese cars out of its own country and the EU, while Germany wants to avoid a trade conflict. Read Amelie Richter’s analysis to find out what to expect from next week’s meeting in Paris.
The news that everyone was waiting for – but which came as a surprise – broke the day before the May vacations: The Third Plenum of the Central Committee of the Communist Party will take place after all, in July. This was decided by the Politburo on Tuesday, the official news agency Xinhua reported. The Third Plenum, which is so important for the economic course of the next five to ten years, has been overdue since the fall of 2023. Autumn would have been the usual date for the meeting since the 1990s. But nothing happened, not even in February or March before the National People’s Congress.
Xinhua did not name the exact date of the plenum. Instead, the state news agency quoted members of the Politburo with worried tones about the economy. “The complexity, seriousness and uncertainty of the external environment have intensified.” China must push ahead with reforms and gain a strategic advantage over overseas competitors. This sounds as if tough interest politics can be expected from the meeting. It will also be interesting to see whether the Third Plenum sends out signals that the party leadership is shifting its focus away from security policy and towards the economy, as companies and investors hope.
Between the CP’s five-yearly party congresses, the Central Committee meets seven times for such plenums, which are numbered consecutively and each deals with different topics (see diagram below). The Third Plenum is traditionally one of the most important, as the 376 members of the Central Committee, including ministers, provincial leaders and high-ranking academics, negotiate economic policy behind closed doors. China’s economy urgently needs medicine to combat the real estate crisis, weak consumption and growing overcapacity.
But why only now? We can only speculate. In the fall of 2023, there were many indications that the ranks under party leader Xi Jinping were divided on economic policy. On Tuesday, the South China Morning Post quoted Xie Maosong from the National Institute of Strategic Studies at Tsinghua University as saying that the party leadership was taking the upcoming round of reforms “very seriously and therefore did not want to make important decisions hastily”.
Others suspected that the timing in the fall or spring was unfavorable for Xi due to the economic misery and several scandals in the military. Some observers even speculated at the time that Xi no longer wanted such formal plenary sessions as a matter of principle – as he preferred to manage everything himself, for example with his commissions and leadership groups in the CP.
So now there will be a third plenary session after all. What can we expect from it? As a rule, detailed economic policy issues are not discussed at such meetings, but rather guidelines: Do we want more openness and more market, or is control over central sectors more important to us? Do we consider the growing overcapacity to be a necessary evil or a real problem that needs a solution? But it is uncertain whether there will be any real debate or whether Xi will set the line from the outset.
In any case, Xi has increasingly spoken of “reforms” in documents and while traveling through the country, which suggests that there could well be a comprehensive reform agenda. However, it is not clear from the available texts what these reforms might be. At the National People’s Congress, Xi promised: “China’s reforms will not pause, and opening-up will not stop.” To this end, important measures will be planned and implemented.
According to Xinhua, the Third Plenum will discuss the comprehensive deepening of reforms and the advancement of modernization with Chinese characteristics. This is standard Xi party-speak: the name of the first topic literally corresponds to one of the most important decision-making bodies within the CP. The Central Commission for Comprehensively Deepening Reform (CCDR/中央全面深化改革委员会) was initially founded by Xi at the end of 2013 as a small leadership group and upgraded to a commission in 2018 in order to accelerate structural reforms. Xi himself holds the chairmanship. The CCDR acts as a kind of super-ministry that gives instructions to state bodies.
Interestingly, just weeks before the CCDR predecessor was founded, Xi had agreed to a reform program at the Third Plenum in October 2013 that was intended to give the market a “decisive role”. With the new leadership group, Xi evidently wanted to control the reforms himself – in retrospect, a first sign of his enormous claim to power. However, little of these reforms were implemented; over the years, Xi increasingly prioritized security policy over the economy.
Is there now a turnaround? Nobody can clearly predict that. In any case, historically speaking, many Third Plenums have stood for lasting and effective reforms since the end of the 1970s. The Third Plenum in December 1978, for example, initiated China’s economic opening to the world under Deng Xiaoping. At the Third Plenum in November 1993, the then head of state and party leader Jiang Zemin got the stalled market economy reforms back on track with his goal of a “socialist market economy”.
According to the South China Morning Post, a Third Plenum will also be happy to discuss investigations into high-ranking officials. So far, for example, Beijing has not said anything about the reasons for the dismissal of former Foreign Minister Qin Gang, former Defense Minister Li Shangfu and several high-ranking military officers – all of whom were members of the Central Committee until their ouster in 2023. If the plenum speaks about this, it could subsequently provide information on the investigation.
When China’s head of state Xi Jinping meets President Emmanuel Macron in Paris at the beginning of next week to mark the 60th anniversary of diplomatic relations between the two countries, he is unlikely to hide his displeasure at the EU investigation into EV state subsidies. After all, France was the main driver behind Brussels‘ decision: following months of lobbying by the French, EU Commission President Ursula von der Leyen launched the new anti-subsidy investigation in the autumn – much to Berlin’s annoyance.
France, the EU’s second-largest economy, has a very different approach to EVs from the People’s Republic than Germany. Paris promotes EVs, but de facto excludes Chinese models. To this end, Paris has devised an environmental bonus in which manufacturers have had to collect points since the beginning of 2024 in order to qualify for a subsidy: These include the electricity mix in the country of origin (still coal-heavy in China) and the distance to the delivery point in France (China is a long way away). As a result, Chinese manufacturers never achieve the required minimum number of environmental points. “A car manufactured in China using coal-fired electricity will not benefit from the green bonus“, Energy Transition Minister Agnès Pannier-Runacher once said. This gives domestic models a price advantage.
The French government justifies the de facto exclusion of Chinese EVs from subsidies with environmental protection. Hundreds of millions of euros of public money had previously been invested in vehicles with a very poor carbon footprint, said Finance and Economy Minister Bruno Le Maire. This is now a thing of the past. In the future, an electric vehicle should “only have a minor impact on the environment during production and transportation” in order to benefit from the subsidy.
France, home to car manufacturer Renault and a sizable Stellantis workforce, is leading the EU’s efforts to produce more electric cars in Europe and bring them to buyers. All of this benefits Stellantis. The group was created in 2021 from the merger of the Italian-American Fiat-Chrysler and the French Groupe PSA. In October, Stellantis reported a turnover of around €45 billion for the third quarter. The conglomerate’s electric car sales increased by 37 percent, which was mainly due to the Jeep Avenger, Citroën Ami and Peugeot E-208 models.
In the fall of 2023, Macron also presented a new leasing system for electric vehicles for only around €100 per month. The focus is on electric cars from European manufacturers: Models from French manufacturers Renault, Peugeot and Citroën as well as Opel and Fiat were named as examples of electric cars that are eligible for the leasing offer.
The offer was primarily aimed at financially disadvantaged households. The program was temporarily discontinued in February – too many applications had been received, with 50,000 initially being the limit. The program is to be relaunched in 2025. Used electric cars and models converted to electric drive could also be leased under the program. However, the vehicle had to have been registered for the first time at least three and a half years ago.
However, the exclusion of Chinese EVs is not stopping the French from cooperating with China: Stellantis only announced in October that it would acquire around 20 percent of the Chinese manufacturer Leapmotor for around €1.5 billion. The Group also announced the founding of Leapmotor International, a joint venture 51 percent managed by Stellantis. This holds exclusive rights for the manufacture, sale and export of Leapmotor products outside China. According to media reports, two initial Leapmotor models are to be built at Stellantis’ plant in Poland, as reported by Reuters.
German trade expert Nicolas Köhler-Suzuki from the French Jaques Delors Institute is rather skeptical about the feared flood of e-cars in the European markets: “I am not convinced that China’s supply of electric vehicles is covered by sufficient European demand.” This is also shown by the fact that e-vehicles of Chinese brands are increasingly piling up in European ports, as well as the slowdown in European imports of Chinese electric vehicles last year.
“One reason could be consumer ethnocentrism”, suspects Köhler-Suzuki in an interview with Table.Briefings. “Despite decades of deep economic integration, French manufacturers continue to dominate the French market and German manufacturers the German market.” Why this should be any different for Chinese manufacturers is questionable.
Köhler-Suzuki sees the real danger elsewhere: The EV debate is currently contributing to the Franco-German divide. According to him, the differences between the respective car markets naturally play a major role in the attitude of the two EU states: “Cheaper cars such as those from Stellantis probably have a higher risk of competition with Chinese models than higher-priced German cars.” Köhler-Suzuki warns that the Franco-German differences of opinion are damaging a common European position and can be exploited by divide-and-rule tactics by Washington and Beijing.
Sinolytics is a research-based business consultancy entirely focused on China. It advises European companies on their strategic orientation and specific business activities in the People’s Republic.
Snoopy couldn’t talk, but these cute robot dogs would be able to: The so-called Robot Dog BabyAlpha four-legged friends, which are currently being presented as a world first in Nanjing, are equipped with a Large Language Model (LLM) – ChatGPT for artificial dogs, so to speak.
This means that the artificial dogs should obey much more reliably than most of their living counterparts. They should also be able to sing, dance and – for whatever reason – make video calls. Then it’s no longer: “Sit!”, “Down!” or “Heel!”. Instead: “Hang up!”.
The long-lost 3rd plenary session has been found. The top-level meeting on economic planning is now due to take place in July – nine months later than expected. Xi announces “reforms”, but from his mouth this could just as easily mean closing the markets and more repression.
China observers have long wondered how the Central Committee functions under Xi Jinping. Normally, the economic plenum should have come before the People’s Congress in March, or even better before the planning conferences in winter. After all, what should the planning guidelines be based on if not economic guidelines? In her analysis, Christiane Kühl explains what lies behind this.
Meetings between China’s President Xi Jinping and Emmanuel Macron always make the German government a little nervous at the moment. France then pursues different interests towards China than Germany. For example: Paris prefers to keep Chinese cars out of its own country and the EU, while Germany wants to avoid a trade conflict. Read Amelie Richter’s analysis to find out what to expect from next week’s meeting in Paris.
The news that everyone was waiting for – but which came as a surprise – broke the day before the May vacations: The Third Plenum of the Central Committee of the Communist Party will take place after all, in July. This was decided by the Politburo on Tuesday, the official news agency Xinhua reported. The Third Plenum, which is so important for the economic course of the next five to ten years, has been overdue since the fall of 2023. Autumn would have been the usual date for the meeting since the 1990s. But nothing happened, not even in February or March before the National People’s Congress.
Xinhua did not name the exact date of the plenum. Instead, the state news agency quoted members of the Politburo with worried tones about the economy. “The complexity, seriousness and uncertainty of the external environment have intensified.” China must push ahead with reforms and gain a strategic advantage over overseas competitors. This sounds as if tough interest politics can be expected from the meeting. It will also be interesting to see whether the Third Plenum sends out signals that the party leadership is shifting its focus away from security policy and towards the economy, as companies and investors hope.
Between the CP’s five-yearly party congresses, the Central Committee meets seven times for such plenums, which are numbered consecutively and each deals with different topics (see diagram below). The Third Plenum is traditionally one of the most important, as the 376 members of the Central Committee, including ministers, provincial leaders and high-ranking academics, negotiate economic policy behind closed doors. China’s economy urgently needs medicine to combat the real estate crisis, weak consumption and growing overcapacity.
But why only now? We can only speculate. In the fall of 2023, there were many indications that the ranks under party leader Xi Jinping were divided on economic policy. On Tuesday, the South China Morning Post quoted Xie Maosong from the National Institute of Strategic Studies at Tsinghua University as saying that the party leadership was taking the upcoming round of reforms “very seriously and therefore did not want to make important decisions hastily”.
Others suspected that the timing in the fall or spring was unfavorable for Xi due to the economic misery and several scandals in the military. Some observers even speculated at the time that Xi no longer wanted such formal plenary sessions as a matter of principle – as he preferred to manage everything himself, for example with his commissions and leadership groups in the CP.
So now there will be a third plenary session after all. What can we expect from it? As a rule, detailed economic policy issues are not discussed at such meetings, but rather guidelines: Do we want more openness and more market, or is control over central sectors more important to us? Do we consider the growing overcapacity to be a necessary evil or a real problem that needs a solution? But it is uncertain whether there will be any real debate or whether Xi will set the line from the outset.
In any case, Xi has increasingly spoken of “reforms” in documents and while traveling through the country, which suggests that there could well be a comprehensive reform agenda. However, it is not clear from the available texts what these reforms might be. At the National People’s Congress, Xi promised: “China’s reforms will not pause, and opening-up will not stop.” To this end, important measures will be planned and implemented.
According to Xinhua, the Third Plenum will discuss the comprehensive deepening of reforms and the advancement of modernization with Chinese characteristics. This is standard Xi party-speak: the name of the first topic literally corresponds to one of the most important decision-making bodies within the CP. The Central Commission for Comprehensively Deepening Reform (CCDR/中央全面深化改革委员会) was initially founded by Xi at the end of 2013 as a small leadership group and upgraded to a commission in 2018 in order to accelerate structural reforms. Xi himself holds the chairmanship. The CCDR acts as a kind of super-ministry that gives instructions to state bodies.
Interestingly, just weeks before the CCDR predecessor was founded, Xi had agreed to a reform program at the Third Plenum in October 2013 that was intended to give the market a “decisive role”. With the new leadership group, Xi evidently wanted to control the reforms himself – in retrospect, a first sign of his enormous claim to power. However, little of these reforms were implemented; over the years, Xi increasingly prioritized security policy over the economy.
Is there now a turnaround? Nobody can clearly predict that. In any case, historically speaking, many Third Plenums have stood for lasting and effective reforms since the end of the 1970s. The Third Plenum in December 1978, for example, initiated China’s economic opening to the world under Deng Xiaoping. At the Third Plenum in November 1993, the then head of state and party leader Jiang Zemin got the stalled market economy reforms back on track with his goal of a “socialist market economy”.
According to the South China Morning Post, a Third Plenum will also be happy to discuss investigations into high-ranking officials. So far, for example, Beijing has not said anything about the reasons for the dismissal of former Foreign Minister Qin Gang, former Defense Minister Li Shangfu and several high-ranking military officers – all of whom were members of the Central Committee until their ouster in 2023. If the plenum speaks about this, it could subsequently provide information on the investigation.
When China’s head of state Xi Jinping meets President Emmanuel Macron in Paris at the beginning of next week to mark the 60th anniversary of diplomatic relations between the two countries, he is unlikely to hide his displeasure at the EU investigation into EV state subsidies. After all, France was the main driver behind Brussels‘ decision: following months of lobbying by the French, EU Commission President Ursula von der Leyen launched the new anti-subsidy investigation in the autumn – much to Berlin’s annoyance.
France, the EU’s second-largest economy, has a very different approach to EVs from the People’s Republic than Germany. Paris promotes EVs, but de facto excludes Chinese models. To this end, Paris has devised an environmental bonus in which manufacturers have had to collect points since the beginning of 2024 in order to qualify for a subsidy: These include the electricity mix in the country of origin (still coal-heavy in China) and the distance to the delivery point in France (China is a long way away). As a result, Chinese manufacturers never achieve the required minimum number of environmental points. “A car manufactured in China using coal-fired electricity will not benefit from the green bonus“, Energy Transition Minister Agnès Pannier-Runacher once said. This gives domestic models a price advantage.
The French government justifies the de facto exclusion of Chinese EVs from subsidies with environmental protection. Hundreds of millions of euros of public money had previously been invested in vehicles with a very poor carbon footprint, said Finance and Economy Minister Bruno Le Maire. This is now a thing of the past. In the future, an electric vehicle should “only have a minor impact on the environment during production and transportation” in order to benefit from the subsidy.
France, home to car manufacturer Renault and a sizable Stellantis workforce, is leading the EU’s efforts to produce more electric cars in Europe and bring them to buyers. All of this benefits Stellantis. The group was created in 2021 from the merger of the Italian-American Fiat-Chrysler and the French Groupe PSA. In October, Stellantis reported a turnover of around €45 billion for the third quarter. The conglomerate’s electric car sales increased by 37 percent, which was mainly due to the Jeep Avenger, Citroën Ami and Peugeot E-208 models.
In the fall of 2023, Macron also presented a new leasing system for electric vehicles for only around €100 per month. The focus is on electric cars from European manufacturers: Models from French manufacturers Renault, Peugeot and Citroën as well as Opel and Fiat were named as examples of electric cars that are eligible for the leasing offer.
The offer was primarily aimed at financially disadvantaged households. The program was temporarily discontinued in February – too many applications had been received, with 50,000 initially being the limit. The program is to be relaunched in 2025. Used electric cars and models converted to electric drive could also be leased under the program. However, the vehicle had to have been registered for the first time at least three and a half years ago.
However, the exclusion of Chinese EVs is not stopping the French from cooperating with China: Stellantis only announced in October that it would acquire around 20 percent of the Chinese manufacturer Leapmotor for around €1.5 billion. The Group also announced the founding of Leapmotor International, a joint venture 51 percent managed by Stellantis. This holds exclusive rights for the manufacture, sale and export of Leapmotor products outside China. According to media reports, two initial Leapmotor models are to be built at Stellantis’ plant in Poland, as reported by Reuters.
German trade expert Nicolas Köhler-Suzuki from the French Jaques Delors Institute is rather skeptical about the feared flood of e-cars in the European markets: “I am not convinced that China’s supply of electric vehicles is covered by sufficient European demand.” This is also shown by the fact that e-vehicles of Chinese brands are increasingly piling up in European ports, as well as the slowdown in European imports of Chinese electric vehicles last year.
“One reason could be consumer ethnocentrism”, suspects Köhler-Suzuki in an interview with Table.Briefings. “Despite decades of deep economic integration, French manufacturers continue to dominate the French market and German manufacturers the German market.” Why this should be any different for Chinese manufacturers is questionable.
Köhler-Suzuki sees the real danger elsewhere: The EV debate is currently contributing to the Franco-German divide. According to him, the differences between the respective car markets naturally play a major role in the attitude of the two EU states: “Cheaper cars such as those from Stellantis probably have a higher risk of competition with Chinese models than higher-priced German cars.” Köhler-Suzuki warns that the Franco-German differences of opinion are damaging a common European position and can be exploited by divide-and-rule tactics by Washington and Beijing.
Sinolytics is a research-based business consultancy entirely focused on China. It advises European companies on their strategic orientation and specific business activities in the People’s Republic.
Snoopy couldn’t talk, but these cute robot dogs would be able to: The so-called Robot Dog BabyAlpha four-legged friends, which are currently being presented as a world first in Nanjing, are equipped with a Large Language Model (LLM) – ChatGPT for artificial dogs, so to speak.
This means that the artificial dogs should obey much more reliably than most of their living counterparts. They should also be able to sing, dance and – for whatever reason – make video calls. Then it’s no longer: “Sit!”, “Down!” or “Heel!”. Instead: “Hang up!”.
