Source: South China Morning Post Published: 2024-08-08

Western media analysts often fail to grasp the significance of the reforms initiated at the third plenum of the Communist Party of China, which recently concluded in Beijing.

The Communist Party typically holds seven plenary sessions during each five-year term of its Central Committee, and the third is particularly important as major policy directions and reforms are often introduced.

The 1978 third plenum marked the beginning of China’s reform and opening up, a policy introduced by Deng Xiaoping that transformed China from one of the world’s poorest countries into the second-largest economy, measured by nominal gross domestic product (GDP).

The Communist Party’s third plenum in 2013 further deepened these reforms, ensuring China’s continued economic growth, perhaps setting the stage for it to one day become the world’s largest economy.

On July 18 this year, the third plenum concluded with a proposal for “further comprehensive deepening [of] reform”, a continuation of China’s pragmatic approach to development that Western analysts often underestimate.

Long-term reform is a challenge. In Western democracies, political candidates campaign on promises of change, but after one or two terms, little may actually change. Even if reforms are implemented, there is no guarantee that a successor won’t reverse them. China, however, approaches reform as a relay race, with each generation of leaders passing the baton to the next.

When President Xi Jinping took office as Communist Party general secretary in 2012, China was already the world’s second-largest economy, but significant challenges remain. Over the past 12 years China has dealt with six major areas ‒ poverty, isolation, pollution, corruption, hegemony and crisis prevention ‒ issues often discussed in Chinese political discourse.

First, poverty. By the end of 2020, China announced the eradication of extreme poverty, achieving this milestone a decade ahead of the United Nations’ 2030 Sustainable Development Goals. From 2012 to 2020, tens of millions people were lifted out of extreme poverty.

Secondly, in response to the hi-tech blockades and trade restrictions imposed by the United States, China has focused on achieving technological independence. Between 2012 and 2023, China’s scientific research funding as a percentage of national income reached 2.64 per cent, making it the global leader in research investment. By 2023, there were 465,000 hi-tech enterprises in China, according to the Ministry of Industry and Information Technology. China’s chip self-sufficiency rate has increased to over 40 per cent.

Thirdly, China is leading the world’s largest emissions reduction initiative. In the past decade alone, China’s energy consumption per unit of GDP dropped by 26.8 per cent and carbon dioxide emissions per unit of GDP reportedly fell by more than 34 per cent.

The country’s new energy vehicle sales could surpass 10 million units this year. Meanwhile, China’s solar power industry is also a global leader, with capacity accounting for around 80 per cent of the world’s total.

Fourthly, tackling corruption is crucial for sustainable development. Between 2012 and 2022, China investigated nearly 5 million officials for corruption.

Fifthly, China has consistently opposed hegemonic behaviour, pledging never to use nuclear weapons first and adhering to peaceful development, as enshrined in its constitution. It has proposed the Belt and Road Initiative. Moreover, it is committed to equal cooperation with countries around the world, helping broker the normalisation of ties between Iran and Saudi Arabia, as well as the Palestinian factional unity agreement.

Lastly, to prevent crises, China has introduced and revised more than 20 laws related to national security, addressed property bubbles and cracked down on transnational fraud and cybercrime.

Of course, progress in these six areas cannot conceal the fact that there are still problems. These are precisely the targets for the next phase of national development. Just as the reforms of Deng Xiaoping’s era left issues for future leaders to address, the reforms of the past 12 years have set the groundwork for further comprehensive deepening.

This year’s third plenum passed a 22,000-word key document which outlines more than 300 reforms to be implemented over the next five years. This reflects China’s unwavering commitment to reform and opening up over the past 45 years.

My institution, the Chongyang Institute for Financial Studies, has published a report that provides insight into China’s trajectory over the next five years and beyond, which gives a clearer perspective on China’s future. By 2029, we expect more than 40 per cent of the world’s top 500 companies to be Chinese. China is expected to surpass the United States, potentially becoming the world’s largest economy by 2035.

Average life expectancy in China could reach almost 80 years old while basic medical and pension coverage will exceed 95 per cent. In 2029, the Chongyang Institute expects there will be more than 100 countries that either share mutual visa exemptions or have unilateral visa exemptions and visa-on-arrival arrangements with China.

About one-third of the country’s population ‒ over 400 million people – will have travelled abroad. Environmentally, China is likely to achieve its carbon peak goal ahead of schedule, leading global efforts in emission reductions.

In terms of space and aviation, China will become one of the countries with the most comprehensive space programmes in the world, with plans to send astronauts to the moon.

More importantly, the national governance capacity and system of the Communist Party will take another big step forward. By 2029, China will have hopefully modernised as a socialist country.