China's awaited "Third Plenum" meeting for the fall of 2023 has been delayed, sparking concerns about the country's ability to tackle pressing challenges and the Chinese government's priorities and potential future direction.

The current "Two Sessions," China's annual parliament proceedings, are closely watched for economic stimulus signals from the government. However, this year's legislature meeting will not include a news conference by Premier Li Qiang. This departure, coupled with the absence of such conferences for the next three years, adds an air of mystery to China's political and economic landscape.

Analysts widely expect Premier Li to unveil an ambitious growth target, hovering around 5%, emphasizing the sustained focus on economic growth amidst mounting challenges. According to CNN, market observers are closely watching the market's response to announcements during the assembly, with skepticism about whether confidence projections and measures will be sufficient to revive optimism.

Nevertheless, any potential lack of market response is unlikely to diminish Chinese President Xi Jinping's influence. While economic challenges erode public trust in the leadership's ability to deliver heightened growth and improved living standards, Xi's political stronghold remains resilient.

Unconstrained by electoral considerations, Xi Jinping's primary focus is elite control rather than mass approval, considering the current Chinese economic situation is far from a collapse that could overwhelm the party's intricate repression apparatus.

(Photo : GREG BAKER/AFP via Getty Images)  China's President Xi Jinping leaves following the opening ceremony of the Chinese People's Political Consultative Conference (CPPCC) at the Great Hall of the People in Beijing on March 4, 2024   

Expert: China is Struggling to Address Challenges

Stephen Roach, a senior fellow at Yale Law School, suggests the failure to schedule the plenary session may indicate a struggle to find innovative solutions to China's complex issues. These plenum meetings, traditionally a platform for President Xi Jinping to unveil reforms, serve as a statement about the nation's future.

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In a CNBC report, Roach expressed his concerns, emphasizing the gravity of the situation given China's serious challenges, including economic struggles post-COVID-19. Moreover, the property market, characterized by unfinished projects and financially strapped developers, exacerbates economic difficulties. Recent data signals an economic slowdown, deflation, and a sluggish stock market, raising doubts among investors about China's economic outlook.

Roach additionally highlights challenges such as China's aging population and productivity issues, stressing the need for significant productivity growth to counteract the declining workforce. While President Xi Jinping has discussed new production models, the lack of specificity during the delayed "Third Plenum" raises concerns.

Not Enough Efforts

In an earlier report by VC Post, China is drafting a new law to bolster the private sector, addressing concerns like property rights, entrepreneur protection, and payment issues for SMEs. This legislative move aligns with broader economic goals, seeking to enhance productivity and confidence amid deflationary pressures and a sluggish real estate market. Its inclusion in the national parliament's legislative plan underscores its priority for the government.  

Despite recent measures by Chinese authorities to boost the economy, including cuts to the benchmark five-year loan rate, observers argue these are not comprehensive enough. The "Third Plenum" meetings, a cornerstone of China's political system, typically occurring about a year after new leadership assumes office, concentrate on specific themes, with the third plenum heavily focusing on economic issues.

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