Key takeaways from the Third Plenum, South China Sea tensions, China hosts Palestinian and Ukrainian delegations
+ Beijing's historic central axis awarded UNESCO world heritage status
Welcome back to What’s Happening in China, your weekly update on the latest news and developments from the country.
Whether you are a businessperson, investor, government official, academic, media outlet, or general reader, if you want to stay up-to-date on the latest developments in and related to China, I encourage you to subscribe.
Your engagement helps with the growth and reach of this newsletter. If you find it useful, please like, comment, restack, or share it with friends, family, and colleagues.
Let’s jump into it.
THROUGH THE LENS
IN FOCUS
On reporting from China
The latest by Peter Hessler — great as always.
Today’s China is not Mao’s China, and it’s not Stalin’s Soviet Union. There is no model or precedent: We have never witnessed an authoritarian system that has remained so repressive while experiencing so much material and educational improvement. The current moment is unquestionably dark, but tomorrow may be different. As a teacher, I have faith in the many young people like Serena, who was curious, hard-working, and tough-minded. I’ve also observed that of my former Fuling students, and of the other people I’ve known well since the 1990s, I can’t think of a single one who strikes me as having become more close-minded, more reactionary, and more ignorant over the years. In fact, the trend is precisely the opposite. In that regard, the transformation at the individual level runs directly against the grain of what’s happened with the political system. This is by no means a guarantee of change—systems have a way of overwhelming individual talent and decency. But between these two dynamics is an underlying tension, and within that tension lies hope.
Read: Sideline Sinology
THIRD PLENUM
Third Plenum Hot Takes: Skepticism and Concern
Center for Strategic and International Studies
A key task of the just completed conclave was to consider a draft of the Decision of the CCP Central Committee on Further Comprehensively Deepening Reform to Advance Chinese Modernization (中共中央关于进一步全面深化改革、推进中国式现代化的决定), which lays out the CCP’s most authoritative plans to govern the economy in the coming years. According to a CCP website, the document went through 38 drafts. Right after the conclave ended, the CCP issued a communique (English, Chinese) summarizing the results of the meeting. On Sunday, July 21, the text of the full, far more detailed Decision (English, Chinese) was issued, which provides a stronger foundation for evaluating the meeting’s significance.
Below several experts from CSIS’s China programs weigh in on the Decision and its significance for China’s economy, politics, and foreign relations.
Xi Sets Out 2029 Vision At The Third Plenum
Jamestown
Chinese Communist Party (CCP) General Secretary Xi Jinping has solidified his position as the driving force behind achieving a “high-quality socialist market economy” by 2029. The recent CCP Central Committee Plenum indicated that he would rule until at least 2032.
The Third Plenary Session of the 20th Central Committee of the CCP outlined its economic strategy, focusing on high-tech innovation. Despite ongoing efforts to revitalize the economy in this vein, growth remains sluggish.
Discussions of tax reforms could upset business confidence, as the potential broadening of tax categories comes at a time when many companies are facing audits by local governments meant to force them to pay back years’ worth of taxes.
The plenum hinted at adopting a policy of re-collectivization to address the underutilization of rural land and draw young workers back to agriculture, echoing failed Maoist policies.
The plenum communiqué stressed the need for controlled pro-market reforms and other measures to attract foreign investment, while acknowledging the myriad internal and external risks the system currently faces.
Transcript: Huang Yiping & Tu Xinquan decode Third Plenum
So what I'm saying is the reforms need to go forward, no question, but you only want to do it prudently. And I think the approach the government took, No. 1, was very much in line with what I actually expected; and No. 2, I thought that was a realistic approach. You know, if you have more aggressive ideas, as I said, personally, I would like to recommend some more aggressive measures, but perhaps this is not the best time for us to expect it. That's the first overall approach.
So when you say, well, the market is disappointed. That's probably true, but either because the expectation was just overly too high or No. 2, I think the reason why investors are not very upbeat at the moment is because the macroeconomy is not doing particularly well.
POLITICS & SOCIETY
Younger Chinese fume at call to raise retirement age
Financial Times
The generational divide over the retirement age underlines the challenges for policymakers trying to deal with a growing imbalance between China’s working age and elderly population as the country enters a period of rapid demographic decline.
Chinese retirement ages are low by advanced economy standards: 50 years for female blue-collar workers, 55 for female white-collar employees, and 60 for all males.
Such early retirement threatens to supercharge the rise in the country’s old-age dependency ratio — the number of working age people compared with the elderly.
[…]
Economists said that aside from ensuring the pension system was fully funded in the future, the government faced a further challenge in trying to make it more equitable. Pensions for civil servants and those formally employed in urban areas are far more generous than those for many migrant workers and people in rural areas. Addressing this imbalance would also require even more money.
[…]
But even though the proposal was broadly in line with previous party statements on the issue, it spooked younger people already worried about record long working hours and poor employment opportunities as China’s economy struggles to recover from a property crisis.
This tension spilled over into anger when rumours spread online that the retirement age would be extended to 65 for those born after 1990.
One online commenter said of the younger generation: “Born when they said there were too many people, grew up when they said there were too few, too old when job hunting, now too young to retire.”
Solutions to China’s birth rate problem don’t lie in Japan’s playbook
SCMP
After the fiasco of the selective two-child policy, the universal two-child policy and the three-child policy, China introduced new policies at the third plenum of the Communist Party’s 20th Central Committee to address population ageing and the country’s declining birth rate.
These policies include lowering the cost of childbirth, parenting and education, providing couples with children with childbirth subsidies, tax breaks, affordable childcare and possibly longer parental leave.
In fact, the Japanese government has already done what China’s government intends to do. Japan’s approach has proved expensive and inefficient, temporarily boosting the total fertility rate – the number of births expected in a woman’s reproductive lifetime – from 1.26 births per woman in 2005 to 1.45 in 2015 before it slid back down to 1.2 in 2023. China, which is getting old before it gets rich, does not have the financial resources to fully follow Japan’s path.
The decline in the fertility rate is inevitable, like a giant rock rolling down a hill. The one-child policy accelerated the process, and now the giant rock is at the foot of the hill. It will be very difficult to move it back uphill.
China rolls out strict new measures for government sector to protect state secrets
SCMP
Under the regulations, heads of government departments with the authority to determine state secrets will be responsible for defining them. Those officials are required to draw up a “list of state secrets” within their respective areas of responsibility and receive special training on how to identify and protect secrets.
All central Communist Party organs and governmental bodies must also set up an office responsible for securing secrets, to be staffed by officials exclusively tasked with overseeing state secrets.
Government departments are also required to identify “positions involved with secrets” and screen officials before they begin work in these positions, as well as regularly conduct confidentiality training during their work.
Employees who handle state secrets will be banned from travelling abroad without prior permission under the state secrets law. The restrictions remain in effect even after the employee leaves their job, and in some cases may be permanent.
The revised regulations also specify how top-level state secrets must be handled, including appointing specialised personnel to receive and send items containing the secrets. At least two people must be present when carrying such items, which can only be opened, read or used in designated places, and cannot be copied or downloaded, according to the new regulations.
The regulations, which will go into effect in September, also urge manufacturers to “innovate security and secrecy products and confidential technical equipment using new technologies, methods and processes”.
A top Chinese university fires a professor after a student accused him of sexual harassment
AP
A top Chinese university fired a professor on Monday, a day after a graduate student accused him of sexual harassment on social media in a rare public allegation and posted recordings as evidence, drawing widespread support.
The woman, who identified herself as Wang Di, said she is studying in a doctoral program at Renmin University of China’s School of Liberal Arts. She posted a 59-minute video on Sunday on the Weibo social media platform in which she said her supervisor, an ex-vice dean and former Communist Party representative at the school in Beijing, physically and verbally abused her
Keep reading with a 7-day free trial
Subscribe to What's Happening in China to keep reading this post and get 7 days of free access to the full post archives.