As the Communist Party of China holds the Fourth Plenary Session of the 20th Central Committee from the 20th to the 23rd, investors are focusing on China's future economic model. With industrial supply chains shaken by escalating U.S.-China trade tensions and a flood of low-priced Chinese products, decisions at this plenary session are expected to have a profound impact on the landscape of international trade.
According to Bloomberg on the 9th (local time), ahead of the party's Fourth Plenum, global investors and multinational corporations are turning their attention to Beijing. The meeting will be attended by President Xi Jinping, along with 205 full members and 171 alternate members of the party's Central Committee, China's top power body, and will decide on major national governance directions across politics, the economy, and society, as well as senior appointments in the party, government, and military. Representatives of state-owned corporations, academics, and officials from anti-corruption bodies are also reportedly invited in part.
The plenary session of the Central Committee is the Communist Party's core power organ that elects members of the Politburo Standing Committee, the top leadership group. It is usually held once a year, with each session addressing different issues. The First Plenum decides on party cadres, the Second Plenum approves personnel plans for the state president and premier, the Third Plenum sets major policies to be implemented during the leadership's five-year term, and the Fourth Plenum makes decisions on the party's development direction and personnel.
While Fourth Plenums typically deal with political and ideological themes such as strengthening intra-party discipline and governance capacity, this time the economic agenda has unusually come to the fore because last year's Third Plenum was delayed. In past Fourth Plenums, major political decisions were made, including ▲ intensifying anti-corruption crackdowns ▲ reforming state-owned corporations ▲ expelling Zhao Ziyang and selecting Jiang Zemin after the Tiananmen incident.
Accordingly, the core agenda of this plenary session is expected to be the deliberation and approval of the draft of the 15th Five-Year Plan, a national development blueprint for 2026 to 2030. Earlier in April, Xi held a seminar in Shanghai with provincial governors to gather opinions, and the central government also collected proposals from the public through its website.
When officially announcing the schedule for the session on the 29th of last month, the Politburo, the top organ of the Central Committee, said it would "foster 'new productive forces' centered on scientific and technological innovation, deepen reform, and expand market opening," and added it would "ensure that the achievements of modernization are shared more broadly and fairly."
Investors are watching closely to see whether China will pivot its economic model from "investment- and export-led growth" to "domestic demand-led growth," using this session as a turning point. In the recent process of supply chain realignment, China has taken a direct hit from slowing exports and damage to manufacturing, putting a brake on growth. The United States, through measures such as tariff, is pressuring China to fix its overcapacity in sectors such as steel and electric vehicles and shift from an export-led to a domestic demand-led economy.
However, China is currently grappling with a dual challenge of restructuring the real estate market and sluggish domestic demand. As the value of real estate, which accounts for a significant portion of household assets, has fallen, domestic demand has struggled to recover, and the youth unemployment rate reached 18.9% this August, the highest since December 2023. Against this backdrop, observers say a key point of discussion will be whether China can effectively boost domestic demand while maintaining its state-led industrial policy.
There is also speculation that this session could serve as a starting signal for Xi's power reshuffle. Since Xi's third term began in 2022, anti-corruption investigations have expanded to an unprecedented degree, with more than nine of the 205 Central Committee members dismissed and many senior officials not appearing in public. Experts said that, ahead of the next party congress in 2027, moves toward subsequent personnel changes and power reconfiguration will gather pace depending on how these personnel matters are handled.