China’s third plenum, a plenary session of around 360 high-ranking Chinese Communist Party (CCP) members focusing, this year, on the economy, concludes today following four days of behind-closed-doors discussions.
The meeting comes as Beijing sifts through a mixed bag of economic indicators.
Government data released Monday showed the Chinese economy grew by 4.7 per cent in the second quarter compared to a year earlier. The figure fell short of most analysts’ forecasts. Tight-fisted consumers and a sagging property sector were mostly responsible for the lower-than-expected growth.
Beijing is also trying to tame a high youth unemployment rate, which stood, officially, at 13.2 per cent in June, although the real number is likely higher. In May, Chinese President Xi Jinping, also general secretary of the CCP, reportedly told the party’s Politburo that “more jobs should be created for [graduates],” suggesting a growing focus on the issue.
No grand stimulus package or policy ‘U-turns’ are expected following this week’s plenary session, but smaller adjustments are possible. Xi hinted at this ‘doubling down’ approach Wednesday in an article in Qiushi, the CCP’s leading theory journal. The theme of Xi’s piece — a patchwork of past quotes and essays — was maintaining “self-confidence and self-reliance,” and quoted Xi as saying that “reversing our course will lead us nowhere.”
His comments indicate Beijing will, indeed, stay the course on trade and industrial policy and embrace “new productive forces,” a state-led, national-scale industrial modernization program introduced at China’s ‘Two Sessions’ meetings in March.
Beijing is targeting GDP growth of “around” five per cent in 2024.
Exports boom, but for how long?
Chinese exports increased 8.6 per cent in June year-over-year, a 15-month high.
For now, exports will help to smooth-over slumps in consumption and investment, but spats with a growing number of trading partners — including Canada, the European Union, India, Indonesia, and the U.S. — could undermine some of that growth over time.
Last week, NATO members, too, signalled their displeasure with Beijing. A joint statement argued China’s “stated ambitions and coercive policies continue to challenge our interests, security and values,” and called the Chinese government “a decisive enabler of Russia’s war against Ukraine,” a charge rejected by Beijing.
Poking the bear
In late June, Canadian Finance Minister Chrystia Freeland announced the launch of policy consultations, concluding August 1, to prevent inexpensive Chinese electric vehicles from flowing into Canada.
In an interview with Bloomberg on Friday, Freeland said that — depending on how conversations go with Canadian businesses and labour groups — the consultation “actually could be broader than that,” implying wider trade restrictions against China. Ottawa will have to weigh trade, security, and industrial considerations in crafting a response to Beijing and prepare for retaliation against, most likely, industries in Western Canada.
Global Affairs Canada’s sweeping ‘State of Trade’ report, released last month, painted a surprising picture of Canada-China trade. In 2023, Canadian goods exports to China increased by C$1.8 billion year-over-year, the largest increase of any Canadian export partner.
That bump was largely attributable to “a significant increase in oilseed exports,” according to GAC. Canadian imports from China in 2023, meanwhile, dropped by C$9.4 billion.
