China's July Politburo Meeting: Transcript and Readout
Fourth Plenum to be held this October; Anti-Involution; Beijing shifts focus from tariff battles to domestic reforms
The official readout of the July Politburo meeting is out. It announced that the fourth plenum of the 20th Central Committee is to be held this October.
Traditionally, the First and Second Plenums mostly deal with personnel matters, the Third Plenum mostly discusses reform, the Fourth Plenum mostly concerns Party building, the Fifth Plenum mostly involves national economic planning, the Sixth Plenum has no fixed theme, and the Seventh Plenum mainly prepares for the next Party Congress.
However, the previous fourth plenum held in 2019 broke that pattern, adding a focus on advancing the modernization of China's system and capacity for governance, which is regarded as the fifth modernization, in addition to the previous Four Modernizations proposed by Zhou Enlai (modernization of industry, agriculture, national defence, and science and technology). So, I'm not sure which topic this year's fourth plenum will focus on.
Going back to the politburo meeting itself, as is tradition, July's politburo meeting mainly focuses on economic issues. I have some highlights:
Macroeconomic policy
The meeting pointed out that macroeconomic policies should continue to exert force and be strengthened in a timely manner.
Suggest more macro policies to come in Q3 and Q4.
Compared to the April meeting's call to "urgently implement more proactive and effective" macroeconomic policies, July's tone is more moderate, changing to "sustain efforts and intensify them when appropriate." Plus, there's no expression mentioning "trade struggles." This indicates that China's macroeconomic policy focus has shifted from responding to April's tariff impact to focusing on its own long-term development.
This can be interpreted either as China having strengthened its economic resilience through export diversification, thereby reducing the impact of U.S. tariffs on Chinese exports, or as positive signals emerging from negotiations, leading China to take an optimistic view of Sino-U.S. tariff negotiations.
Anti-involution campaign.
It’s been a hot topic recently, since Xi explicitly emphasized it during the sixth meeting of the Central Financial and Economic Commission. We also saw another emphasis at the Politburo meeting.
Govern disorderly competition among enterprises according to law and regulations. Promote capacity governance in key industries.
推动市场竞争秩序持续优化。依法依规治理企业无序竞争。推进重点行业产能治理。
Entrepreneurs should stand at the forefront and win market competition initiative with high-quality products and services.
企业家要勇立潮头，以优质产品和服务赢得市场竞争主动。
“win with high-quality products and services”, I believe the unspoken words here are “not lower price“. This anti-innovation campaign is not limited to the EV industry. A week ago, food delivery giants like Meituan, JD, and Ele.me also got administrative interviews from the State Administration of Market Regulation for "irrational competition."
Also interesting expressions:
Carry out urban renewal with high quality.
高质量开展城市更新
Another indication of no mass urban renewal coming.
Deeply implement special actions to boost consumption, and while expanding commodity consumption, cultivate new growth points for service consumption. Expand consumer demand while ensuring and improving people's livelihoods.
在扩大商品消费的同时，培育服务消费新的增长点。在保障改善民生中扩大消费需求
May suggest the next phase of subsidies may focus on service industries. Also, China started direct subsidies to childbirth, 3600 RMB (500$, 90% comes from the central gov) a year for each child. Although China's social security expenditure as a percentage of GDP remains too low, this policy direction is more important than the subsidy amount itself. I believe this statement reflects that the leadership has recognized that expanding social welfare protections can prevent excessive household savings, thereby stimulating consumption.
Below is the English transcript I made:
Link: https://www.gov.cn/yaowen/liebiao/202507/content_7034454.htm
The Political Bureau of the CPC Central Committee held a meeting on July 30, deciding to convene the Fourth Plenary Session of the 20th Central Committee of the Communist Party of China in Beijing this October. The main agenda items are: the Political Bureau of the CPC Central Committee will report its work to the Central Committee and study proposals for formulating the 15th Five-Year Plan for National Economic and Social Development. The meeting analyzed and studied the current economic situation and deployed economic work for the second half of the year. Xi Jinping, General Secretary of the CPC Central Committee, presided over the meeting.
The meeting pointed out that the "15th Five-Year Plan" period is a critical phase for laying a solid foundation and making comprehensive efforts to basically achieve socialist modernization. China's development environment faces profound and complex changes, with both strategic opportunities and risks and challenges coexisting, and increasing uncertain and unpredictable factors. At the same time, China's economy has a stable foundation, many advantages, strong resilience, and great potential. The supporting conditions and basic trends for long-term improvement remain unchanged. The advantages of the socialist system with Chinese characteristics, the super-large-scale market, the complete industrial system, and abundant human resources are becoming more prominent. It is necessary to maintain strategic determination, enhance confidence in victory, actively identify, respond to, and seek changes, concentrate efforts on doing our own affairs well, win strategic initiative in fierce international competition, and achieve major breakthroughs in strategic tasks concerning the overall situation of Chinese-style modernization.
The meeting emphasized that economic and social development during the "15th Five-Year Plan" period must adhere to Marxism-Leninism, Mao Zedong Thought, Deng Xiaoping Theory, the important thought of "Three Represents," and the Scientific Outlook on Development, fully implement Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, focus on the central task of comprehensively building a modern socialist country and achieving the second centenary goal, comprehensively advance the great rejuvenation of the Chinese nation through Chinese-style modernization, fully, accurately and comprehensively implement the new development philosophy, adhere to the general principle of seeking progress while maintaining stability, coordinate the promotion of the "Five-sphere Integrated Plan," coordinate the advancement of the "Four Comprehensives" strategic layout, accelerate the construction of a new development pattern, coordinate both domestic and international situations, coordinate development and security, promote effective qualitative improvement and reasonable quantitative growth of the economy, promote comprehensive human development and solid steps toward common prosperity for all people, and ensure decisive progress in basically achieving socialist modernization.
The meeting noted that since the beginning of this year, under the strong leadership of the Party Central Committee with Comrade Xi Jinping at its core, all regions and departments have taken active actions and tackled difficulties, accelerating the implementation of more proactive and effective macroeconomic policies. China's economy has been operating steadily with progress, and new results have been achieved in high-quality development. Major economic indicators have performed well, new quality productive forces have actively developed, reform and opening-up have continuously deepened, risks in key areas have been effectively prevented and resolved, and social safety net guarantees have been further strengthened. China's economy has demonstrated strong vitality and resilience.
The meeting pointed out that China's current economic operation still faces many risks and challenges. It is necessary to correctly grasp the situation, enhance awareness of potential dangers, maintain bottom-line thinking, make good use of development opportunities, potential and advantages, and consolidate and expand the momentum of economic recovery and improvement.
The meeting emphasized that in doing economic work for the second half of the year, we must adhere to the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, maintain the general principle of seeking progress while maintaining stability, fully, accurately and comprehensively implement the new development philosophy, accelerate the construction of a new development pattern, maintain policy continuity and stability, enhance flexibility and foresight, focus on stabilizing employment, enterprises, markets, and expectations, effectively promote domestic and international dual circulation, strive to complete the annual economic and social development goals and tasks, and achieve a successful conclusion to the "14th Five-Year Plan."
The meeting pointed out that macroeconomic policies should continue to exert force and be strengthened in a timely manner. More proactive fiscal policies and moderately loose monetary policies should be implemented in detail to fully release policy effects. Accelerate the issuance and use of government bonds and improve the efficiency of fund use. Secure the bottom line of the "three guarantees" at the grassroots level. Monetary policy should maintain ample liquidity and promote the reduction of comprehensive social financing costs. Make good use of various structural monetary policy tools to strengthen support for technological innovation, boost consumption, small and micro enterprises, and stabilize foreign trade. Support major economic provinces in playing a leading role. Strengthen the consistency of macroeconomic policy orientation.
The meeting emphasized the need to effectively release the potential of domestic demand. Deeply implement special actions to boost consumption, and while expanding commodity consumption, cultivate new growth points for service consumption. Expand consumer demand while ensuring and improving people's livelihoods. Promote the construction of the "two major" projects with high quality, stimulate the vitality of private investment, and expand effective investment.
The meeting pointed out the need to unwaveringly deepen reform. Adhere to leading the development of new quality productive forces through technological innovation, accelerate the cultivation of emerging pillar industries with international competitiveness, and promote the deep integration of technological and industrial innovation. Advance the construction of a unified national market in depth and continuously optimize market competition order. Govern disorderly competition among enterprises according to law and regulations. Promote capacity governance in key industries. Standardize local investment promotion behaviors. Adhere to the "two unwaverings" and stimulate the vitality of various business entities.
The meeting emphasized the need to expand high-level opening-up and stabilize the basic foundation of foreign trade and investment. Help foreign trade enterprises that have been severely impacted, strengthen financing support, and promote the integrated development of domestic and foreign trade. Optimize export tax rebate policies and build high-level open platforms such as free trade pilot zones.
The meeting pointed out the need to continuously prevent and resolve risks in key areas. Implement the spirit of the central urban work conference and carry out urban renewal with high quality. Actively and prudently resolve local government debt risks, strictly prohibit new hidden debts, and effectively and orderly promote the liquidation of local financing platforms. Enhance the attractiveness and inclusiveness of domestic capital markets and consolidate the momentum of capital market recovery and improvement.
The meeting emphasized the need to solidly do a good job in ensuring people's livelihoods. Highlight the employment-first policy orientation and promote employment for key groups such as college graduates, veterans, and migrant workers. Implement policies that benefit the people and improve the stratified and classified social assistance system. Consolidate the foundation of agriculture, rural areas, and farmers, and maintain grain and important agricultural product prices at reasonable levels. Consolidate and expand the achievements of poverty alleviation to ensure no large-scale return to poverty. Always put people's lives and safety first, strengthen production safety and food safety supervision, make every effort to do flood control emergency rescue and disaster relief work, and ensure energy and power supply during peak summer periods. Do a good job in formulating the "15th Five-Year Plan."
The meeting pointed out the need to fully mobilize enthusiasm from all parties. Leading cadres should establish and practice correct views on political achievements and do economic work according to the new development philosophy. Entrepreneurs should stand at the forefront and win market competition initiative with high-quality products and services. All regions and departments should fully implement the decisions and deployments of the Party Central Committee, make good use of the learning and education results of thoroughly implementing the spirit of the Eight-point Regulation of the Central Committee, and provide strong momentum for high-quality development.
The meeting also studied other matters.