The Chinese Communist Party (CCP)’s 3rd Plenum (meeting) traditionally has been held at the end of the year (or very early in the next year) following the National Party Congress, and focuses on the economy. Last Autumn, Xi Jinping decided otherwise, and set Sinologists on a quest to understand why.
The Central Committee typically holds seven plenums during its five-year term, although the 8th CC (1956-69) held at least 12, and the .9th just two. The 1st is held immediately after the National Party Congress, and selects its leadership: Secretary General (nee Chairman), Politburo, Military Affairs Commission, and Discipline Inspection Commission. Each of these, in turn, decides on its own top leadership (e.g., the Politburo Standing Committee, the top party organ) … at least, according to organization theory and the party constitution. The second plenum attends to nominations for top state government posts, just prior to the annual Spring meeting of the National People’s Congress.
The Third Plenum is the economic policy one, and typically takes place in the Autumn, a year after the National Party Congress. Xi Jinping seems to have decided it wasn’t necessary to follow the seasonal pattern laid down by Deng. Either that, or he faced serious push-back, which seems unlikely.
Plenum No. 4 and No. 6 have no fixed agenda, but may be an opportunity to reshuffle the party leadership. No. 5 works on the outline of the national Five-Year Plan.
The 7th plenum is now traditionally the one just before a new National Party Congress. It is responsible for setting the agenda and determining candidates for the Central Committee.
70 Years of 3rd Plenums
(*) 7th Central Committee’s 3rd Plenary Session (Jun 1950) – The first CCP CC meeting held in Beijing, focusing on government work. The Korean War broke out two weeks later.
(*) 8th / 3rd (Sep-Oct 1957) – Report on the Anti-Rightist Campaign and outline of the Great Leap Forward.
(*) 9th – there were only two plenums, in April 1969 (immediately following the 9th National Party Congress; and in Aug-Sep 1970, when new provincial party committees were established.
(*) 10th / 3rd (Jul 1977) – Hua Guofeng was ratified as Chairman, Deng Xiaoping was restored to all his previous posts, and the Gang of Four were expelled from the party.
(*) 11th / 3rd (Dec 1978) – Inauguration of the Reform Era. Nine former central committee members from pre-Cultural Revolution days were brought back into the fold. Chairman Hua Guofeng renounced his “Two Whatevers” ideology.
(*) 12th / 3rd (Oct 1984) – Formal party adoption of Deng’s reforms.
(*) 13th / 3rd (Sep 1988) – Wage and price reforms, to control inflation (high inflation helped spark the Tiananmen protests the following year).
(*) 14th / 3rd (Nov 1993 – Decision on establishing the Socialist Market Economy System, i.e., Deng’s re-seizure of power post-Tiananmen and post-Southern Tour.
(*) 15th / 3rd (Oct 1998) – 20 year review of economic reform.
(*) 16th / 3rd (Oct 2003) – Revision of socialist market economy and promotion of private enterprise within the party.
(*) 17th / 3rd (Oct 2008) – Rural reform and development.
(*) 18th / 3rd (Nov 2013) – sweeping re-centralization of the security apparatus as part of a 300-step reform program of the economy, society, armed forces, and party.
(*) 19th / 3rd (Feb 2018) – first major anomaly: state government positions there the main topic.
Another PLA Reorganization
Xi Jinping is once again shaking up China’s armed forces, which suggests that at least in the near term there will be a greater degree of caution in dealing with international affairs. No one wants to fight with an untested order of battle.
The PLA Strategic Support Force (SSF) was established in 2015 with responsibility for intelligence support, technical surveillance, electromagnetic warfare, cyberwarfare, and psychological warfare. Sub unites included the Network Systems Department and Space Systems Department, which ran the Astronauts Corps.
Effective April 19, 2024, the new Information Support Force (ISF) takes over. It is led by Lt General Bi Yi; General Li Wei is the Political Commissar. General Li was SSF Political Commissar, and Lt General Bi was SSF Deputy Commander.
The ISF will operate at the same organization level – reporting directly to the Military Affairs Commission – as the space, cyberspace, and joint logistics support forces. China had not previously acknowledged the existence of the Space Force or Cyberspace Force.
Purge and Revamp
SSF Commander General Ju Qiansheng was purged in July 2023 after two years on the job. He was joined in political purgatory by former National Defense Minister Li Shangfu, Air Force Commander Ding Laihang, Rocket Force Commander Zhou Yaning, and several other senior officers and corporate executives. Among those was Space Systems Department Deputy Commander Shang Hong, who was dropped as a delegate to the 20th National Party Congress without explanation. Shang had been Chief-of-Staff of the General Armaments Department under Li Shangfu.
Among those who appear to have survived (thus far) are Lt General Yang Xiaoxiang (SSF Deputy Political Commissar and Discipline Inspection Commission Secretary), Lt General Ding Xingnong (SSF General Political Department Director and a former Rocket Force Deputy Political Commissar), Space Systems Department Commander General Hao Weizhong, and Lt General Chen Hui, Commander of the Network Systems Department.
US Q-1 ’24 Labor Market Strong
The American labor market remained very strong in the first quarter with job growth of 1.7% in January-March (over the same 2023 period) and a labor force rise at a similar pace. Non-Farm Payroll numbers were up 2.3% in the first semester and 1.9% in March.
The unemployment rate averaged 3.8% in the first three months, and for those over 20 years of age, 3.3%. Employment in the 20-24 year-old age cohort rose 6.9%, whereas 25-54 year old saw an increase of 1.6%. The labor force participation ratio has remained above 70% for 26 straight months.
PRC Law And The Demise of Hong Kong In 2024
Publication: China Brief Volume: 24 Issue: 3
By: Arran Hope, Feb 2, 2024
Executive Summary
- New National Security legislation, which emulates recent PRC laws, and the potential torture of a witness in the ongoing trial of Jimmy Lai, is characteristic of the erosion of legal norms in Hong Kong as it moves towards full unification with the CCP regime.
- Attempts at regularization and institutionalization of the PRC law in the last two decades are undercut by irresolvable tensions at the heart of the system, leading to instability. “Socialist rule of law with Chinese characteristics” is a paradox, where “rule by law” is intended to enhance the regime’s capacity for stability but cannot be reconciled with the “rule by man” personalization of the system under Xi Jinping.
- Hong Kong illustrates the instrumentalization of PRC law, whereby the aim of national unification allows the law to be overcome. The CCP, which frequently operates in an extralegal capacity within its own borders, supervenes in the city to assert its ultimate authority.
- How recent developments unfold, including the liquidation of Evergrande–—especially in light of recent legal attempts at “harmonization” of the two distinct legal regimes through reciprocal decisions—-will expose the political prerogatives that outweigh actual progress in legal system development.
https://jamestown.org/program/prc-law-and-the-demise-of-hong-kong-in-2024
The 2024 US Economy
The American economy grew 2.5% in 2023, well above the previous year’s 2.0% and even with the 2019 and 2017 numbers. 2023 was also a tenth of a point above the pre-covid 10 year average.
Private consumption led the charge (+2.2%),spearheaded by higher volumes of durable goods purchases. Capital investment, however, was a drag on growth, falling 1.2% due to a stunning g 10.7% drop in residential construction. Exports were up 2.7% but imports fell 1.7%.
Remarkably, inflation (as measured by the headline CPI) fell by nearly half (from 8.0% in 2022 to 4.1% last year) while unemployment held steady, at a modest 3.6%. Conventional wisdom holds that inflation and unemployment move in opposite directions.
The final quarter of the year was up 3.1% year-on-year, and 3.3% on a quarter-to-quarter annualized basis. Private consumption ticked up from 2.2% in Q-3 to 2.6% in October-December; capital investment remained in positive territory, at +1.8%.
The broad GDP deflator rose 2.6% in the final period, the slowest pace in 11 quarters. The Fed’s preferred private consumption deflator dropped below 3% (to 2.7%), again for the first time since Q-1 2021.
And, current federal government spending dropped to 23% in the fourth quarter, the lowest share of GDP in four years. Revenue data have yet to be released.
DPP’s Lai wins Taiwan Presidency
Lai Ching-te of Taiwan’s ruling Democratic Progressive Party (DPP) won Saturday’s presidential election with an estimated 40% of the vote, topping the Nationalist Party (Kuomintang, KMT)’s Hou Yu-ih (33.5%) and the Taiwan People’s Party’s Ko Wen-je (26.5%). The win gives the DPP an unprecedented third consecutive term in office.
The vote was largely split between the more populous eastern half of the island (including the cities of Kaohsiung, Taichung, and Tainan) backing Lai and the mountainous west backing Hou. The Legislative Yuan is divided as well, with the two main opposition parties positioned to make life difficult for Lai. The DPP held a majority in the chamber since 2016.
President-elect Lai said the current policy under President Tsai Ing-wen will continue, even though Chinese Communist Party leaders have refused to meet with DPP officials for decades. Lai played down talk of independence, claiming that it is unnecessarily provocative at this time.
Opponents Ko and Hou originally agreed to a unified ticket, but fell out weeks before the election over who would take the top spot.
2023 Labor Wrap Up
The American labor force grew 1.7% in 2023, more than three times as fast as the overall population (+0.5%) and well above the body of people over the age of 19 and not incarcerated or otherwise incapable of work (+1.1%).
The 2.83 million additional workers dwarfs the 138,300 rise in people not in the workforce, and was slightly above the 2.75 million expansion of civilian employment.
Non-farm payroll rose by 3.55 million, or 2.3%. The three-year rolling average increase (+3.2% p.a.) is the highest since 1977-79.
That helped hold the unemployment rate to 3.64% (and for the fussy, U-6 was 6.9%, matching the lowest rate in history, which was 2022).
Mr Xi Cleans House
In late December, China’s National People’s Congress (NPC; the highest legislative body) dismissed from its ranks nine senior military officers. They are largely related to the on-going purge of the Rocket Force (previously known as the Second Artillery Corps) and Equipment Development Department (the old General Armaments Department), but also include the commander of the southern third of the navy.
Unlike in the old days when people disappeared overnight, the process now appears to be much more regulated. Removal from office is documented at each stage of the process.
General Li Yuchao, commander of the PLA Rocket Force was removed from office in July, as was General Ju Qiansheng, who commanded the Strategic Support Force.
General Li Shangfu, a former head of equipment development, was dismissed from his post as Defense Minister in October, the same month in which Foreign Minister Qin Gang and Central Bank of China party secretary Liu Liang were ousted, although it is unclear if these cases were related to any of the others.
Two other high profile personnel changes took place in October: Finance Minister Liu Kun and Science and Technology Minister Wang Zhigang were removed from their posts (as was one of Wang’s vice ministers, Zhang Guangjun).
And, as the NPC dismissals confirm, Air Force Commander General Ding Laihang has been replaced, and like several other top ranking officers dropped from the legislature. The others include former Rocket Force Commander General Zhou Yaning, Deputy Chief-of-Staff Lieutenant General Zhang Zhenzhong, Rocket Force Deputy Commander Lieutenant General Li Chuanguang, and Equipment Development deputy director Lieutenant General Zhang Yulin.
CBO on US Economy to 2025
The Congressional Budget Office periodically updates its economic forecast to ensure that its projections reflect recent economic developments and current law.
CBO will publish its budget and economic projections for 2024 to 2034 early next year in its annual Budget and Economic Outlook. This report provides details about CBO’s most recent projections of the economy through 2025, which reflect economic developments as of December 5, 2023 .
CBO develops its economic projections so that they fall in the middle of the range of likely outcomes under current law. Those projections are highly uncertain, and many factors could lead to different outcomes. In CBO’s latest projections:
- Output growth slows in 2024 and rebounds in 2025. The growth of real gross domestic product (GDP, adjusted to remove the effects of inflation) falls from 2.5percent in 2023 to 1.5 percent in 2024 as consumer spending weakens and investment in private nonresidential structures contracts. In 2025, real GDP growth rises to 2.2 percent, supported by lower interest rates and improved financial conditions. (Unless this report indicates otherwise, annual growth rates are measured from the fourth quarter of one year to the fourth quarter of the next.)
- Labor market conditions soften in 2024. Growth in payroll employment slackens, and the unemployment rate rises from 3.9 percent in the fourth quarter of 2023 to 4.4 percent in the fourth quarter of 2024 and remains close to that level through 2025. The labor force grows at a moderate pace, with an increased contribution to that growth stemming from projected immigration over the next two years.1
- Inflation continues to slow over the next two years and approaches the Federal Reserve’s target rate of 2 percent. As measured by the price index for personal consumption expenditures (PCE), inflation falls from 2.9 percent in 2023 to 2.1 percent in 2024, reflecting softer labor markets and slower increases in rents. In 2025, inflation rises slightly, to 2.2 percent, as downward pressures on inflation in food and energy prices ease and stronger economic activity modestly increases price pressures for some categories of services.
- Interest rates on Treasury securities peak in 2024 and then recede through 2025. The Federal Reserve holds the federal funds rate (the rate that financial institutions charge each other for overnight loans of their monetary reserves) between 5.25 percent and 5.50 percent through the first quarter of 2024 and then reduces it in response to slowing inflation and rising unemployment. The rate on 10-year Treasury notes increases to 4.8 percent in the second half of 2024 and begins to fall in mid-2025.
US Q-3, at first glance
In 2023’s third quarter, US GDP grew at its fastest pace, year-on-year, since Q1 2022. The 2.9% pace was half a point faster than in the second quarter, and when measured quarter-to-quarter on an annualized basis, the +4.9% pace was the best since the COVID bounce-back.
The domestic guns were all firing in this first look at the July-September numbers. Consumption picked up half a point over the April-June period, and investment turned positive for the first time in a year. Both exports and imports faded, compared to a year earlier, but the latter fell faster (-1.4%) than did sales abroad (-0.2%).
The GDP deflator rose 3.2%, up 0.3 points from Q-2, but consumer prices rose a half percent more slowly, at +3.4%.
The economy expanded 2.3% in the first three quarters, over January-September 2022, just one-tenth more slowly than the year earlier period.
David O'Rear's East Asia Politics & Economics Blog 