Why China’s plenum on its five-year plan matters for the global economy
Global investors and corporate leaders will parse any public statements for signs of a shift in economic strategy
[BEIJING] The most important meeting of China’s 2025 political calendar is just around the corner. The so-called fourth plenum, scheduled to take place from Oct 20 to 23, will gather hundreds of top officials from the ruling Chinese Communist Party, including President Xi Jinping.
During this closed-door huddle, they will review the country’s 15th Five-Year Plan, a blueprint for China’s economic and social development from 2026 to 2030.
Global investors and corporate leaders will parse any public statements for signs of a shift in economic strategy. There is a particular focus this year on whether the Chinese government will heed calls to pivot towards growth driven by domestic consumption, rather than an investment and export-led model.
The outcome of the conclave will not only set the course for the world’s second-largest economy for the rest of the decade, but is likely to reverberate globally, too. It could affect China’s ties with its trading partners. Tensions have been growing over cut-price Chinese exports, drowning out local competition and exacerbated by US tariffs, pushing China towards other markets.
What is the fourth plenum?
A plenum is a full meeting of the Communist Party’s Central Committee, which has around 370 members. A much smaller group of elites led by Xi makes decisions ahead of the plenary session, and these policies are then formally ratified and announced at the plenum.
The Central Committee typically convenes seven times during its five-year term. Traditionally, the fourth plenum is centred around ideological issues, including party-building and governance, while the fifth plenum is dedicated to the country’s five-year plan.
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The change in sequence to review the 2060 to 2030 road map now is likely due to the third plenum, which took place last year, being delayed by several months.
Where does the fourth plenum take place and who is invited?
Like most important party and state conferences, the plenum is usually held at the Jingxi Hotel in the west of Beijing. The low-key, grey complex is trusted for its security, as it is directly managed by the Central Military Commission, which runs the armed forces.
Attendees of the plenum include the 200 full members of the Central Committee, and about 170 alternate members who do not have voting power. They hold key posts not only in the party, but also across the provincial, municipal and central governments, as well as the military and state-owned enterprises.
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Leaders from the party’s anti-corruption agency and other departments, academic representatives and delegates to the national party congress may also be invited.
What has been the outcome of past fourth plenums?
For decades, the primary focus of the fourth plenum has been about strengthening the party’s discipline and its governance capacity. Xi has used two such gatherings to improve the country’s governance system; for example, by stiffening penalties for corruption, with a focus on strengthening the party’s control and ensuring political stability.
In 1999, party elites agreed to roll out plans to reform China’s inefficient and heavily indebted state-owned companies, to spur competition and reduce the fiscal burden. Large firms, especially in strategic industries, were restructured, while smaller ones were privatised, merged or shut down. That paved the way for the rise of powerful state-owned conglomerates later on, but also led to mass layoffs.
Ten years before that, the Central Committee convened a plenum weeks after a deadly crackdown on student protests in Tiananmen Square. Some 550 senior officials, including 184 party veterans, decided to oust the then party chief Zhao Ziyang on the accusation that he sought to “split the party”; he had opposed using force against the protesters. The meeting also installed Jiang Zemin as China’s next leader.
What is on the agenda for this year’s fourth plenum?
The primary focus of the four-day meeting is to deliberate on and approve a proposal from the top leadership on China’s next five-year plan.
The draft has been at least months in the making. Contributors include Xi himself, who in April convened a seminar in Shanghai with provincial governors to seek input, according to state media. The central government also invited the public to submit suggestions through a website.
The party’s top decision-making body, the Politburo, announced the plenum dates on Sep 29, when it vowed to grow the economy by developing so-called “new productive forces” that focus on scientific and technological innovation, deepen reform efforts and expand the opening up of the country’s markets. The Politburo also pledged to make sure “more benefits of modernisation are shared more widely and fairly”.
The five-year plan is the central instrument of China’s economic management, outlining national priorities and development goals. While detailed targets will not be released until an annual legislative session in March, this plenum will reveal the leadership’s overarching vision.
The central government is considering a new version of Xi’s “Made in 2025” campaign that focused on making China a leader in high-end technological goods, Bloomberg reported in May.
The key question for investors is how China’s government will balance this state-led industrial push against pressures to stimulate household spending and create a more robust domestic market in the face of persistent deflation, manufacturing overcapacity and growing protectionism among trading partners.
What other issues could be discussed?
Tea-leaf readers of China’s elite politics will also be watching for any announcements on personnel changes. It is no secret that Xi’s sweeping anti-corruption campaign has reached the Communist Party’s top echelons at an unprecedented scale since his third term as general secretary started in 2022.
At least nine out of the current 205 Central Committee members have been officially ousted. All of them, except former foreign minister Qin Gang, faced disciplinary probes.
The fate of about another dozen members, who have been absent from public events amid probe rumours, has yet to be formally disclosed. This cohort includes Politburo member He Weidong, along with other generals in the military and senior party diplomat Liu Jianchao. Together, they account for around 10 per cent of full members of the Central Committee.
It is not yet clear whether Xi will formally kick them out at the upcoming plenum. Doing so could trigger a round of promotions and horse-trading as factions position themselves for the next party congress in 2027, offering a glimpse into China’s future leadership line-up. BLOOMBERG
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