China’s Communist birthday celebrations aim to recreate an ancient financial path: NPR

China’s Communist Party leaders are holding a key meeting on Monday – a chance to outline an ancient financial path forward – but few eyewitnesses are expecting significant breakthroughs to boost the economy.

Ailsa Chang, host:

In China, the most notable coverage conferences in years began recently. This is what the ruling communist birthday celebration shouted at the third plenum, and it may have been unclear for a minute. NPR’s John Ruvich explains what’s at stake.

JOHN RUVITCH, BYLINE: Every five years, China’s ruling Communist Party selects an ancient Central Committee. It is the official policy-making structure of the Party, and it meets on certain occasions during periods of time in secret at a protected military resort in Beijing. The same pace is happening from Monday to Thursday. This flow is the third meeting or third full meeting of the Central Committee.

Judd Blanchett: It’s a very unusual life when, you already know, the total energy of a communist birthday celebration comes together.

RUVITCH: Jude Blanchett is an expert on China-language politics at the Center for Strategic and World Research in Washington.

BLANCHETT: And so the message coming out of this is important to align all of the political finance machines.

Ruvich: All plenums are subject, although third plenums sometimes reshape the economic system. The most important thing used to happen in 1978.

(SOUNDBITE OF ARCHIVED RECORDING)

DENG Xiaoping: (Non-English language spoken).

Ruvich: At that gathering, Paramount Chief Deng Xiaoping officially introduced China’s reform and opening-up force.

(SOUNDBITE OF ARCHIVED RECORDING)

DENG: (non-English language spoken).

Ruvich: In 1993, the Third Plenary Meeting gave impetus to state-owned enterprise reform. And in 2013, the first Third Plan under leader Xi Jinping called for sweeping market reforms. Those plans never came to fruition, and the area has undergone a dozen changes since then. Geopolitics is forcing Chinese leaders to rethink their economic policies. At home, growth is slow, and self-confidence is low.

UNIDENTIFIED PERSON: (Non-English speaking).

UNIDENTIFIED STORE OWNER: (Non-English speaking).

UNIDENTIFIED PERSON: (Non-English speaking).

Ruvich: It’s clear in a little bundle of Beijing wine. Crowds come and go, buying small pieces from time to time, though the owner tells NPR that no one is buying kweicho mutai these days. It is the most famous wine of China.

UNIDENTIFIED STORE OWNER: (Talking in Mandarin).

RUVITCH: She says the price of a bottle has fallen, down more than 10% since the spring.

Robin Xing: The most important problem for China is deflation. And to impact the economic system decisively, they need a stimulus package a mile bigger.

RUVITCH: Robin Xing is a China economist at Morgan Stanley in Hong Kong.

Xing: I think the third plenary session will come with some reforms in the backup intake, including expansion of social welfare coverage. However we need one thing quickly.

Ruvich: They don’t think Plenum will ship it. Situation-controlled information outlets have offered some clues about what’s coming. We all know what the name might be in the final document of the plenum. Senior party leaders reviewed a draft, and it’s a mouthful, of recommendations to the Central Committee of the Communist Party of China on pursuing more comprehensive reform and Chinese language modernization.

Manoj Kewalramani follows these things carefully. He publishes an e-newsletter translating and summarizing articles from the Birthday Celebration’s mouthpiece newspaper, Crowd’s Day-to-Day. He’s no longer expecting a huge surprise.

Manoj Kewalramani: I believe you will see confirmation of the truth that the Communist Party, unlike the Party or private institutions or anyone else, is the main actor who has to take charge of directing fiscal policy.

Ruvich: This suggests a focal point on Xi Jinping’s priorities, such as security as a prerequisite for economic expansion and building, quote, “new quality productive forces” — essentially, applied science and industry that will lead the way. Can become remarkable in future. In return for solid demand-side reforms and stimulus, Kewalramani hopes to emphasize China’s healthy manufacturing base, gearing up for the long term in the face of a challenging external environment.

Kewalramani: There is concern about hollowing out production…

Ruvich: It appears that party leaders will also call for additional openness to international capital and industry. China could probably use it. However, Kewalramani and others say it is difficult to see the party achieving much on that front at this pace, given geopolitical tensions.

John Ruvich, NPR Information, Beijing.

(SOUNDBITE OF J. COLE’S “Forbidden Fruit”)

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