News / Asia

China's Third Plenum: A Primer

In this file photo dated Sept. 19, 2004, nine senior members of the Standing Committee of the Political Bureau of CPC present at the Fourth Plenum of the 16th CPC Central Committee in Beijing.
In this file photo dated Sept. 19, 2004, nine senior members of the Standing Committee of the Political Bureau of CPC present at the Fourth Plenum of the 16th CPC Central Committee in Beijing.
VOA News
The Third Plenary Session of the 18th CPC Central Committee, commonly referred to as the Third Plenum, is the third party meeting since Xi Jinping was named Communist Party secretary last November. Third plenums are seen as important political gatherings where the new leadership can map out new policy directions, and set the pace for future reforms.

History

In 1978, two years after Mao Zedong's death, Deng Xiaoping announced the "opening up and reform" strategy that introduced principles of capitalistic economy into the Chinese system and allowed foreign investment to enter the Chinese market. In 1993, then premier Zhu Rongji endorsed the concept of "socialist market economy." The meeting created momentum for deeper liberalization of sectors that had previously been firmly in the hands of the state.

Chinese policeman on duty in central Beijing ahead of the 205-member Central Committee's third plenum, Nov. 7, 2013.
Chinese policeman on duty in central Beijing ahead of the 205-member Central Committee's third plenum, Nov. 7, 2013.


Economic reforms

Chinese leaders are working on a combination of reform proposals that will help push China into the next phase of its economic growth: one less reliant on heavy industry, government investment and infrastructure projects. President Xi Jinping has talked about the need to realize China's rejuvenation, and China's dream. Analysts believe that together with financial and economic measures to rein in the power of vested interests within the state-owned sector, Chinese leaders will need to tackle issues of social justice and income inequality.  

Banking sector

The Chinese banking system is monopolized by large state-owned institutions that favor funding state-owned enterprises instead of smaller private businesses. Interest rates are kept low, which limits Chinese savers' options for investment and consumption. To spur more spending from consumers, Chinese leaders have talked about diversifying the banking sector and relaxing restrictions on deposit interest rates.

Fiscal and tax system

The current taxation system in China was reorganized in the 1990s by then premier Zhu Rongji to redistribute tax revenues in favor of the central government. At the time, the move was seen as an attempt to avoid local corruption, but analysts agree that the system has now run its course. Local governments are strapped for cash. In recent years they have resorted to land sales and massive amounts of credit for their operational revenues. Tax reform will attempt to redistribute fiscal revenues to local governments.

Land

Land collectivization in the 1950s took farmers' property rights to the land and transferred them to communes, managed by local party officials. Such a set-up largely still exists in the Chinese countryside, and allows local governments to arbitrarily sell farmers' land. Land reform would grant farmers more protection by allowing them to sell rural land and properties at market value.  

Welfare

Welfare reform includes the creation of a pension system, and the extension of health care and education benefits to rural areas and migrant workers. Improvement of the current welfare system is one of the most immediate demands of China's citizens. Analysts agree that by strengthening China's welfare safety net, the government would also be encouraging Chinese to consume more instead of saving. 

Hukou

Internal migration in China has often been dubbed the largest migration in history. Hundreds of millions decide to leave the countryside to look for jobs in cities every year. But once they leave their hometowns, migrants lose their rights to welfare coverage and are subjected to discriminatory policies, including restrictions on jobs, housing and education. Analysts say that an overhaul of the household registration system - or hukou - which links citizens to their place of origin, is a key step to adjust social inequality.

Economic statistics

National GDP growth in 2012: 7.8%
Per Capita GDP: $6,091 US, ranked 90th in the world (World Bank)
Unemployment: 4%
Social Unrest: Tsinghua Professor Sun Liping estimated 180,000 mass incidents in 2010

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Comment Sorting
Comments
     
by: Cranksy from: USA
November 09, 2013 2:15 PM
Please, Chinese citizens and Chinese emigrants, comment on this article. To me it makes the relationship between the government and economy in China seem organized and thoughtful. Ordinarily to Americans, China is seen to lack freedom.
In Response

by: Don'tBuyMadeInChina from: China
November 21, 2013 3:36 AM
To Cranksy: It's true that there are several US based websites we can access from China, but if they publish anything against China then it gets blocked. I use a VPN though so I can access any site I want.
In Response

by: Cranksy from: USA
November 12, 2013 2:37 AM
To Don'tBuyMadeinChina: I would add to your list of allegations the Chinese workers who commit suicide because of extreme working conditions at their workplace. If you accessed VOA online while in China, isn't that a counterexample to China's suppression of free speech?
In Response

by: chris from: china
November 11, 2013 10:54 PM
please.... people .. don't care about what they said.. but to see what they are going to do ..... everyone can "plan and describe" a good future to you, but only what they do matters our real lives....
In Response

by: Don'tBuyMadeInChina from: China
November 11, 2013 5:21 AM
I have have visited China on several occasions, and now I have been living here for over a year. The understanding we Americans have that China lacks freedom is accurate. If anything, Americans don't understand how severe the problem truly is in China. The Chinese government is known to perform forced abortions, torture Falun Gang members (this includes killing them for organ harvest), suppression of free speech, religious persecution, extreme control over the everyday lives of the people of China, and the occupation and persecution of Tibet. The Chinese have been just a curl to the Tibetans as the Japanese were to the Chinese during WW2. I believe if the American people truly understood how curl Communist China is to their own people, Americans would not buy anything made in China ever again. It's time for Americans to wake up to the truth and stop buying made in China!!!
In Response

by: Cranksy from: USA
November 10, 2013 11:57 PM

Hi Clove, I glad to learn the you are feeling good about the improvement in your country with the implicit hope that the future will be even better. Do you think the VOA article is a good description of China's recent history and current situation? Please ask the people you know to comment about the article. I not sure you should want to be just the same as Americans in all respects.
In Response

by: Clove from: Bejing
November 10, 2013 10:07 AM
Hi, I am from Beijing. I'd glad to see that some people in the US are intereated in China. Yes, it may seem to lack freedom, but not that bad. Things in China are beciming better and better, and everything here is much better than before. I love my country. And I hope people around the world shall have a better understanding about China. We Chinese are just the same as you Americans. Hope you can be in China to see what really going on here.

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