China's leadership comes together for economic policy consultations
This is the lowest growth rate since early 2023. The "environment" is "tangled and complex," explained the statistics agency. Domestic demand remains insufficient and the basis for a healthy economic recovery must continue to be strengthened. The retail sales growth rate was only up 2% in June according to the agency, down from 3.7% in May.
The world's second largest economy is suffering from a real estate crisis, declining consumption, and an aging population. Adding to these issues are trade disputes with Western countries.
The Third Plenum is being led by State Council Chairman Xi Jinping. He presented a "work report" at the beginning of the four-day meeting, according to the official Xinhua News Agency. Xi also explained a draft resolution of the Central Committee of the Communist Party for further comprehensive deepening of reforms and further advanced modernization of China. The State Council Head had recently announced "significant" reforms.
Observers expect only a "modest" change in policy to boost high-tech production and support housing and households, as Harry Murphy Cruise of Moody's Analytics said. The Communist Party's newspaper warned last week that at the Reforms of the Third Plenum, it's "not about a policy shift." China expert Ting Lu from Nomura expects a discussion of "major, long-term ideas and structural reforms" instead of "short-term political adjustments."
The Third Plenum, being spearheaded by China's leadership in Beijing, is focused on further comprehensive deepening of reforms and advanced modernization, as outlined in Xi Jinping's work report. Bloomberg reported that observers anticipate modest changes in economic policy, primarily aimed at boosting high-tech production and supporting housing and households. However, Ting Lu from Nomura suggests that the discussions will likely revolve around major, long-term ideas and structural reforms, rather than short-term political adjustments, echoing the Communist Party's stance as published in its newspaper. Despite the ongoing challenges facing China's economy, including a real estate crisis and declining consumption, discussions at the Plenum are expected to contribute to strengthening the foundation for a healthy economic recovery.
