Stephen Roach Discusses the Issues With China’s Economy, Solutions for the Big Problems

The delay of the 2023 plenum raises questions about China's economic trajectory and its ability to enact impactful policies.

China’s anticipated “Third Plenum” meeting, scheduled for the fall of 2023, did not occur, and its postponement has raised significant concerns among experts about the country’s ability to address its complex challenges.

Stephen Roach, a senior fellow at Yale Law School, highlighted the significance of this delay, suggesting it might signal China’s struggle to devise effective solutions to its pressing issues.

Historically, Chinese President Xi Jinping has utilized these plenary sessions to introduce reforms, indicating the country’s future trajectory.

However, the absence of such a pivotal gathering during a time of profound challenges is concerning, according to Roach.

Stephan Roach (Credits: Jin Lee/Getty Images)

The country’s property market turmoil, coupled with an economic slowdown, deflationary pressures, and sluggish stock market performance, has prompted apprehension among investors regarding China’s economic prospects.

Additionally, China faces demographic challenges, including an aging population and productivity concerns. Roach emphasized the necessity for concrete strategies to boost productivity growth and address demographic shifts.

Despite Xi Jinping’s rhetoric about innovation and new production models, the absence of a Third Plenum session to outline specific plans is troubling, Roach noted.

While Chinese authorities have implemented some measures, such as reducing the benchmark loan rate, observers argue that these actions may not be sufficient to address the broader economic issues.

China currently grapples with various issues, notably economic setbacks following the COVID-19 pandemic.

The Third Plenum meetings traditionally convene senior party officials to focus on economic matters, offering insights into the government’s priorities and future directions.

As China’s annual parliamentary meetings, known as the “Two Sessions,” commence, investors eagerly await signals regarding potential economic stimulus measures.

In an unusual departure from Chinese political norms, Premier Li Qiang will not hold a press conference during this year’s parliamentary meeting, a decision that underscores the significance of China’s current political and economic outlook.

Jessica Smith
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