CPC plenum aims to consolidate reforms to realize a high-standard socialist market economy

Some foreign observers think the third plenary session of the 20th Central Committee of the Communist Party of China offered little in the way of changed economic policies.

They are wrong.

The plenum built upon the significant changes brought about by policies implemented earlier that were designed to achieve the goal of common prosperity.

READ MORE: CPC charts growth blueprint

It confirmed the direction and continuation of the most significant changes in the Chinese economy since 2008. It endorsed the shift to a digital economy. It continued to build defenses to counter the subversive intent of chip sanctions and trade tariffs. The plenum also reaffirmed unwavering support for the WTO free-trade environment.

The plenum provided support for ongoing efforts being made toward reform and opening-up, which is necessary for common prosperity. The decisions reflect the need to protect the fruits of the reforms and to ensure that the progress made is not stunted or restrained in the future by attempts to hamper China’s growth.

Achieving a high-level socialist market economy and socialist modernization ensures that nobody is left behind by economic development. The first objective, lifting people out of absolute poverty has been achieved. The new objective is common and moderate prosperity, and the plenum policy announcements should be viewed in this context.

Advancing new and high-quality productive forces is one of the key topics to emerge from the plenum. It projects the Chinese economy as becoming a leading light in technology innovation as it builds a modern digital economy.

The new productive forces include further support for development of clean technologies, a key reference in the context of future economic growth. The government aims to expand new foreign trade links in this field, partly in response to recent US and European Union tariffs on green technology.

The plenum recognized that China must “adapt to the new round of scientific and technological revolution and industrial transformation”. The ultimate goal is to make China a champion of innovation by generating disruptive technology and scaling up into high-end manufacturing. This is consistent with the gradual change in economic focus where economic growth and continued prosperity come from the digital economy.

It also reflects a determination to achieve technological self-reliance in order to help China withstand the United States’ strategic technological containment. It is a prudent policy given the possibility of a new Trump administration and its stated intention to further hamper China’s growth.

The push to further deepen reform comprehensively will help consolidate the progress made so far, so that a high-standard socialist market economy can be achieved to advance Chinese modernization. The key features include leveraging the role of the market to foster a fairer market environment to make resource allocation as efficient and productive as possible.

Although the objectives of opening-up are desired by Western businesses, they have a slightly different meaning in the Chinese context. A fairer market environment does not open the door to unfettered rapaciousness. A fair market environment delivers economic benefits more equitably. It is the same principle in regard to resource allocation.

The emphasis is on responsibility and obligations toward improving society. In the West, these are part of environmental, social and governance responsibilities. From the Chinese perspective, it is focus on the social responsibility of business to add to common prosperity rather than provide advantages to elite groups.

Common moderate prosperity is not an empty phrase. The third plenum remained committed to endorsing the social responsibility of business to enhance common prosperity in all fields, including the living environment.

Ecological civilization is now cast as a key feature of China’s modernization, with aim to promote the reduction of carbon and pollution. China is installing renewables so rapidly that it will meet its 2030 target six and a half years early. The climate agenda is supporting green growth and offers new collaborative opportunities for foreign investment.

ALSO READ: Milestone on reform roadmap

Opening-up is a defining feature of Chinese modernization and it brings benefits for foreign companies and the global economy. Essential to success is strong support for free trade in the face of pressure for protectionist tariffs.

It is often assumed that opening-up is an exclusive invitation to Western investment in China. The Global Development Initiative and Global Civilization Initiative all suggest that the opening-up invitation is increasingly being extended to the Global South. The mature markets of the EU and the US remain important, but the Global South is the area of future global economic growth.

The third plenum confirmed that China is committed to changing its growth paradigm, from chasing a nominal growth rate to building a resilient economy driven by digital and technological innovation that thrives despite protracted geopolitical repercussions.

The author is an international financial technical analysis expert and a former national board member of the Australia-China Business Council. 

The views do not necessarily reflect those of China Daily.