China’s Economic Reforms in the Spotlight: Navigating Concerns and Opportunities Amidst Global Competition

Xi prioritizes more than just growing China’s economy

The third plenary session of the 20th Central Committee of China is set to take place next month, after facing delays earlier in the year. This meeting is typically known for major economic reforms or policy announcements, and as such, it has raised concerns about potential divisions within the Chinese Communist Party under President Xi Jinping. However, conflicting narratives about the Chinese economy have emerged in the international media as the meeting approaches.

On one hand, some focus on structural issues and policy failures during Xi’s tenure, highlighting low economic growth, high unemployment, weak consumption, demographic challenges, and a sense of uncertainty about the future. On the other hand, others emphasize China’s successes in manufacturing and new energy sectors like solar and electric vehicles achieved through state-led development and industrial policy. Despite these differences in perspective, both narratives underscore China’s rapid advancements in areas like artificial intelligence, semiconductors, and aviation which pose a threat to capitalist economies.

The issue of overcapacity and export gluts plays a significant role in both narratives. With a focus on export-led manufacturing due to sluggish domestic consumption, economic policies in China are closely tied to these factors. While these two media narratives may seem polarized at first glance, they are actually interdependent. Each sheds light on different aspects of China’s political economy. As such, it will be interesting to see how this meeting will address these complex issues within China’s economy.

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