Deep, structural economic reform is an important and continuous process. In the face of economic headwinds and geopolitical challenges, China understands that well. Pakistan doesn’t.

It was not, therefore, surprising to see the recent Communist Party of China (CPC) conclave, or the third plenum, set out a blueprint for reforming the country’s economy last week.

The adoption of a reform resolution is actually being seen as the “most important outcome” of this highly anticipated four-day meeting. There, Beijing announced a series of major measures: rebooting growth, tackling existing hurdles — from government debt to a housing slump to dwindling foreign investment — and building a high-standard socialist market economy by 2035.

This implies that Beijing still sees decent economic growth as crucial in the next decade and aims to achieve socialist modernisation to create a fairer and more dynamic market environment.

The country should focus on bringing about extensive structural reforms to navigate through its current economic and geopolitical challenges with innovation

Among other things, the country will foster “new quality productive forces” — the slogan for its economic strategy of science and technology innovation and industrial upgrading — to focus on areas critical to China’s economy, namely technology and advanced manufacturing.

Over the past four decades or so, the Third Plenary Sessions of China’s ruling Communist Party — held roughly every five years — have played a critical role in China’s economic miracle. They focus on mapping out the general direction of the country’s long-term social and economic policies.

Previous meetings jolted the economy by tackling structural issues, says a Reuters report. A similar conclave in 1978 paved the way for foreign businesses to operate in China; another in 1993 ushered in a liberalisation of the Yuan and embraced a socialist market.

The latest gathering will determine whether China will re-establish itself as “investible” in the eyes of capitalists and steer China towards “high-quality development”, whilst simultaneously managing financial imbalances, the Reuters report adds.

The reform tasks in the resolution, released after the conclusion of the plenum, cover a wide range of areas, from the economy and people’s democracy to ecological conservation and national security. The resolution broaches 300 measures involving reforms at the level of systems, mechanisms, and institutions to advance Chinese modernisation, creating a sweeping blueprint that will guide Beijing for years to come.

The reform tasks are critical in shaping China’s economic development and its position on the global stage, says a Global Times report. “The goal of reform is to address long-standing problems and improve systems to remove hurdles for continued economic growth.”

Chinese state media quoted Tang Fangyu, deputy head of the CPC Central Committee Policy Research Office, as saying at a press conference that promoting Chinese modernisation faces many complex issues and necessitates further reforms to better adapt the relations of production to the productive forces, the superstructure to the economic base, and national governance to social development.

While China’s economy has maintained stable growth in recent years despite a global downturn, it faces a growing set of risks and challenges; rising economic protectionism and geopolitical tensions. The reform measures are key in tackling these challenges and ensuring China’s continuous high-quality development, experts advise.

The third plenum not only reaffirmed China’s commitment to reform and opening up but also drew a clear path for China’s continuous high-quality development, which helps boost confidence both at home and abroad.

“China will accelerate efforts to build a high standard market system, which is a major task for the country,” said Han Wenxiu, executive deputy director of the Office of the Central Committee for Financial and Economic Affairs.

“The country will improve the market system and rules for production factors such as labour, capital, land, knowledge, technology, management, and data. The systems underpinning the market economy will be refined, including optimising the systems for property rights protection, information disclosure, market access, bankruptcy exit and credit supervision,” he continued.

The tasks outlined in the meeting would be completed by 2029, the 80th anniversary of the founding of the People’s Republic of China. The meeting also endorsed President Xi Jinping’s repeated calls for “high-quality development”, prioritising technological investment and encouraging companies to upgrade their equipment and knowledge at a time when China faces tightening access restrictions to Western advanced technology, such as leading-edge computer chips and artificial intelligence.

As foreign investors closely monitor the plenum’s signals, the party said it would remain committed to the state policy of “opening to the outside world” and promised to “expand cooperation with other countries”, reassuring foreign businesses and investors. “We will steadily expand institutional opening up, deepen the foreign trade structural reform, and improve management systems for inward and outward investment,” the communiqué said.

For the world, China’s deepening reform and opening up is expected to create greater opportunities amid a global economic downturn and rising economic protectionism. In promoting high-level expansion, China will unilaterally open its doors to the least-developed countries and, to the rest of the world, its goods, services, capital and labour markets in an orderly way, Mr Wenxiu said.

Pakistan must learn from its Chinese friends and borrow their reform blueprint to navigate through its current economic and geopolitical challenges with innovation, opening itself up to the world for investment by streamlining the country’s talent, reforming the state sector, improving economic governance and creating a conducive environment for the private sector to lead growth.

Published in Dawn, The Business and Finance Weekly, July 22nd, 2024