China Third Plenum 2024

BEIJING — China’s leaders doubled down on boosting domestic technology in a high-level meeting called the Third Plenum that ended Thursday, according to a state media readout.

China must “adapt to the new round of scientific and technological revolution and industrial transformation,” an official English-language communique said. It also said China would “improve the new system for mobilizing resources nationwide to make key technological breakthroughs.”

The readout affirmed Beijing’s commitment to balancing development with ensuring national security, and did not otherwise reveal policy changes.

“This communique [shows China’s leadership] is staying the course in the sense it wants to avoid the worst but it’s not yet convinced the policies the U.S. has used is the best for China,” Liqian Ren, leader of quantitative investment at WisdomTree, said in a phone interview. She was referring to policies such as easy money with lower interest rates.

“That is the government’s calculation, that making progress in technology is the ultimate confidence booster for China, [that the] U.S. couldn’t use those technological bottlenecks to contain China,” she said.

State media said the meeting of the Chinese Communist Party’s Central Committee passed a resolution on “deepening reform” to “advance Chinese modernization.”

Details on the resolution are expected to be released in coming days.

“The outcome is in line with our expectations that the Third Plenum is a continuation of existing policy tweaks,” Tianchen Xu, senior economist, China, at the Economist Intelligence Unit, said in a note.

“I would highlight ‘innovation and managed markets’ as the top two keywords in the Third Plenum,” Xu said. “Innovation and productivity enhancements top all priorities, almost unexpectedly, amid the grand backdrop of US-China rivalry.”

Under the Biden administration, the U.S. has called China a competitor and sought to restrict Beijing’s access to advanced tech such as semiconductors in the name of ensuring national security.

Beijing meanwhile has pushed to develop high-tech domestically and address what it considers risky, overexpansion of the financial sector, especially in real estate.

Regarding the latest plenary meeting, “we think any market-oriented reform will be measured and carried out insofar as it doesn’t compromise national security,” Xu said. “We still hold high expectations for fiscal reform, although the communique was very brief about that topic.”