3rd Plenum Pulse: What to Expect (4)

PKU's Yao Yang tempers expectation for "another wave of reforms and major initiatives."

Yao Yang is Professor and Director of the China Center for Economic Research (CCER), National School of Development (NSD), Peking University. The former Dean of NSD just gave a speech on June 23, 2024, in Shanghai, at an event hosted by Zhenghe Island, a network platform for elites, and the last part of his speech was squarely focused on the upcoming Third Plenary Session of the 20th Central Committee of the Communist Party of China.

Yao has agreed to translate his speech by me, but I’ll first share the last part here because I think it perfectly fits my “3rd Plenum Pulse: What to Expect” series. I’ll share his full speech later - perhaps in The East is Read.

The part related to the Third Plenary Session is brief and accessible, so you can just read it by yourself. For those who have skipped the ongoing series, the background is that the Communist Party of China (CPC) has said the upcoming Third Plenary Session of its current 20th Central Committee will focus on “deepening comprehensive reform to advance Chinese modernization.” Officially, the reform agenda will only be unveiled at the Third Plenum. But that doesn’t mean there are zero signals in public before it happens.

Yao’s speech was titled 中国经济的韧劲 The Resilience of China’s Economy. The translation below is sourced from the Chinese speech shared by Zhenghe Island and hasn’t been reviewed by Yao.

新时代的目标是高水平的社会主义

The Goal of the New Era is High-Level Socialism

What is the ultimate goal of the New Era? Everyone is focused on the Third Plenary Session of the [20th] Central Committee. What will be done at this session?

Many people have high expectations for the Third Plenary Session, hoping for another wave of reforms and major initiatives. I want to tell everyone that these are just your assumptions. The significant reforms in China were completed in the 1990s. What we need to do now is not to initiate more reforms, but to consolidate the achievements of the reforms from the 1990s.

What will the Third Plenary Session do? It will announce the 2035 goals, meaning the objectives to be achieved through the adjustments made in the New Era. These goals have already been disclosed, but people haven't paid close attention to the government documents.

The Third Plenary Session aims to build a high-level socialist market economy, emphasizing the term "high-level" socialism.

What is high-level socialism? Firstly, it involves comprehensive modernization. China has the goal of doubling its income per capita by 2035. In my understanding, a crucial aspect of comprehensive modernization is the technological competition with the United States. As I mentioned earlier, the two countries’ ultimate competition is ideological. How does China win this ideological competition? Through technology.

Next is adjusting the income distribution structure, improving the social security system, and integrating urban and rural areas. What do these three points indicate? They all boil down to one thing: pursuing common prosperity. Comrade Deng Xiaoping told us in the 1980s that China should let some people get rich first. The New Era is different; the goal is to achieve common prosperity.

Additionally, there is a high-level openness to the outside world. However, the current openness is led by China itself. China is the victor, so free trade has become a slogan written on China's banner.

So, what is high-level socialism? It is socialism with common prosperity. In a certain sense, high-level socialism means fulfilling the original intention of the Communist Party of China when it founded the country, completing the construction of Chinese socialism.

This is the story of us Chinese, the story of the Chinese era. This is the “is” [as in David Hume’s Is-Ought] that Chinese entrepreneurs must recognize. Recognizing the “is” and the grand goal of building high-level socialism, I believe Chinese entrepreneurs can make the best adjustments and still grow their enterprises larger and stronger, especially in global competition.

Note: The New Era in the Chinese mainland context is understood to be since the 18th National Congress of the Communist Party of China in November 2012, which produced a new leadership headed by General Secretary Xi Jinping.