China sets mid-July for highly anticipated ‘Third Plenum’ meeting to discuss ‘deepening reform’

NINGBO, China — China’s top leaders will gather from July 15 to 18 for a highly anticipated meeting known as the Third Plenum, state media said Thursday.

“The execution of pledged policies, rather than mapping out a laundry list of policy initiatives alone, would be key to shore up confidence and growth momentum,” said Pang Ming of JLL.

He said his analysis of an annual government meeting in December found the readout had twice as many mentions of policy implementation than the prior year, highlighting its importance.

The Communist Party of China selected a new group of leaders in October 2022 at its 20th National Party Congress. Its third plenary session will run from July 15 to July 18, state media said.

The plenum will discuss “further comprehensively deepening reform and advancing Chinese modernization,” English-language state media said. 

The third plenum carries historical significance, and has previously spurred transformative periods of China’s economic policy. As an example, China under the leadership of Deng Xiaoping in 1978, announced it would kickstart economic reform and opening its economy to private and foreign capital.

This time, the meeting is happening much later than many expected. It is typically held in the fall following the twice-a-decade selection of new party leaders the prior year.

“Most analysts believe the long delay suggests the lack of a consensus over how to address weak domestic demand, a rapidly contracting property sector, worsening trade conflict, and soaring debt,” Michael Pettis, a professor of finance at Peking University’s Guanghua School of Management, said in a June 17 report.

“My best guess is that the Third Plenum will propose measures to address the housing market, the restructuring or re-profiling of local government debt, and weak household consumption,” Pettis said.

“Given the depth of the problems and their intractability — the only way these can be resolved quickly without damaging other parts of the economy is with one-off increases in government debt,” he said, adding: “I don’t think we should be very optimistic about any proposed measures that come out of next month’s meeting.”

— CNBC’s Sonia Heng contributed to this report.