Fact of the week – China’s decisive political event is not the National People’s Congress

Those with an interest in international politics will recognize the images in the press each spring; the red “Great Hall of the People” filled with 3,000 of the most powerful Chinese officials holding their ballots up to vote on the country’s policy plans. Journalists from all over the world use the China National People’s Congress, a rare opportunity to obtain insight in China’s policy thinking, to yearly report to their home media in a 10-day feast of ‘breaking news’ – which in turn spurs economic activity. Public affairs professionals directly break down the policy predictions in business decisions for their companies: During this year’s Congress for example, China stocks rose for four days in a row led by financial and energy companies, after several announcements from Premier Li Keqiang about ‘innovative measures’ to keep economic growth on track.

For savvy China public affairs professionals however, the media outburst during the People’s Congress brings not much news. Policy insiders know that the real major yearly political event in China takes place already 6 months before, during the full meeting of the party’s Central Committee, or plenum. Almost 400 state leaders, ministers, military chiefs, provincial bosses and top academics gather in Beijing this week. While the closed-door sessions are harder to follow for outsiders, the plenum typically gives birth to some of the most impacting and controversial policy plans in China’s recent history. Out of the public eye, during the 2013 plenum President Xi Jinping gained broad political support for the economic reform plan which gave way to the recent market-oriented policies in China. Last year’s meeting approved the easing of China’s long-term one-child policy, allowing all Chinese parents to have two children. When these decisions were announced to the world at the National People’s Congress in spring, national and local governments already spent the past 6 months working on implementation – leaving no time for stakeholders to prepare.

So what will the 2016 plenum, taking place this week in China’s capital, bring? The official agenda puts focus on measures consolidating President Xi Jinping’s 4-year anti-corruption campaign, which will require the party elite present to sign off on two documents: A new code of conduct for party officials and institutions, as well as an amendment to the rules of party supervision. Whereas these decisions will prove mainly to be ideological and thus with little economic impact for companies, the proceedings during the plenum will tell us if President Xi manages to solidify his grip on power as party chief towards the elections at next year’s Party Congress – thereby providing important clues on the direction of party policy for the medium- and long term which will prove useful for those with business interests in China. And as President Xi will want to add one more victory to the legacy of this term, we are watching the outcomes closely to witness the big surprise in policy overhaul which will undoubtedly stem from this plenum.