The Sixth Plenum: China’s leadership adopts new historical resolution for only the third time in 100 years

This Policy Insights article is written by Hill+Knowlton Strategies (H+K), a public relations and integrated communications agency with 85 offices around the globe.

• At the Sixth Plenum, the 19^th CPC Central Committee adopted a rare historical resolution on the “major achievements and historical experience” of the CPC in the century since its founding as well as its “future directions.”
• The Sixth Plenum was particularly important as it took place at a critical historic juncture in the CPC’s plans to achieve “national rejuvenation” through two centennial goals – the building of a “moderately prosperous society” by 2021 and transforming China into a “great modern socialist country” by 2049.
• In the “new era,” Chinese authorities can be expected to further intensify efforts to build a more self-reliant, sustainable, and inclusive economy at home, while pursuing an increasingly assertive foreign policy abroad.
• Going forward, businesses should be aware that the concept of achieving “common prosperity” will be at the heart of the official economic agenda.

Last week, the Chinese leadership gathered for the sixth plenary session of the 19^th Party Congress from the 8th-11th November. Commonly known as the Sixth Plenum, the four-day meetings saw the Central Committee, comprised of more than 300 top party members, adopt a rare resolution on the “major achievements and historical experience” of the Communist Party of China (CPC) in the 100 years since its founding as well as its “future directions.”

The Central Committee also passed a resolution to hold the 20^th Party Congress in the second half of 2022, as China’s latest political cycle comes to a close. This will see a significant shakeup in the Chinese leadership, as some senior officials retire and others move up in the hierarchy.

Historic juncture on China’s road to achieving “national rejuvenation”

Over the course of its five-year terms, the Central Committee holds seven plenary sessions, meeting at least annually to assess China’s political and socio-economic development. The sixth plenums are often notable for unveiling significant planned changes in China’s future course of development – closing the page on one chapter and opening another. They usually focus on ideology and CPC affairs.

However, this year’s conclave was even more important than usual, as it took place at a critical historic juncture in the CPC’s plans to achieve “national rejuvenation” through two centennial goals. After President Xi announced in July that the first goal of building a “moderately prosperous society” had been completed, China has now embarked on its official journey towards realising the second goal of becoming a “great modern socialist country” by 2049, the 100^th anniversary of the founding of the PRC.

A landmark new resolution further strengthens President Xi’s legacy

As only the third such document enacted by the world’s largest political organisation, the new resolution elevated President Xi’s status in the CPC’s history and laid the groundwork for him to secure a landmark third term in office next year.  The first two proclamations were passed in 1945 and 1981 under Mao Zedong and Deng Xiaoping.

President Xi is now enshrined as a crucial historical figure on par with the two former paramount leaders, providing an important boost to his legacy. Notably, the communique adopted at the Sixth Plenum credited President Xi for the first time in an official document as the “principal founder” of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era.

The communique underscored how China has “achieved the tremendous transformation from standing up and growing prosperous to becoming strong”.  Looking ahead, the country will forge ahead on the “new journey that lies before us in the new era” and fulfil the second centenary goal by 2049, according to the document. This new era has been highlighted by the Chinese leadership for years, but the resolution appears to mark its official commencement.

Navigating a shifting business landscape in China’s new era

For companies, the Sixth Plenum holds important implications for China’s future trade and investment policies and continued integration with the global economy. However, the focus was on reiterating the broad rhetorical brushstrokes charting China’s future course rather than unveiling detailed policies; those will come later.

The communique began by highlighting how the Chinese leadership “unanimously agreed that the external environment has grown increasingly complex and grave over the past year” as a result of the “combined impact of worldwide changes of a scale unseen in a century and the global coronavirus pandemic”, while noting that China has contended with keeping COVID-19 under control domestically and advancing its socio-economic development. The emphasis on the increasingly complicated global environment appears to be an indirect reference to its intensifying competition with the US and others.

In the “new era,” Chinese authorities can be expected to further intensify efforts to build a more self-reliant, sustainable, and inclusive economy at home, while pursuing an increasingly assertive and muscular foreign policy abroad. The communique called for the CPC to “apply the new development philosophy, foster a new pattern of development, and promote high-quality development” and emphasised that authorities should “deepen reform and opening up across the board, promote common prosperity for all, and build up our country’s strength in science and technology.”

Going forward, the dramatic overhaul of China’s business landscape that has been unfolding since last year – with a series of regulatory interventions targeting the technology, private education, and real-estate sectors – will continue to reverberate across the economy. In particular, achieving “common prosperity” will be at the heart of the official economic agenda. After decades of rapid growth led to widening socioeconomic divides, the government has been increasingly focused on creating a more even distribution of wealth and income. This will almost certainly see heightened intervention continue in areas of the economy viewed as being part of the problem rather than the solution.

Discussing “common prosperity” at a concluding press conference on the Sixth Plenum’s guiding principles, a senior official stressed that, “enterprises must operate legally and honestly, treat employees kindly and create wealth, which is the right way for business.” It will be critical for companies to demonstrate their support for the national movement towards “common prosperity” and not be perceived as a hindrance to it. Otherwise, they could face serious risks to their future business prospects in China.

Hill+Knowlton Strategies (H+K) is a public relations and integrated communications agency with 85 offices around the globe. In China, our Government & Public Affairs Practice provides bespoke policy and political expertise. As local and global policy experts, we know that politics doesn’t operate in a vacuum and that public affairs can’t either. More than ever before, it is vital that businesses understand and adapt not only to the changing political and regulatory environment, but also to the cultural and societal expectations impacting their futures.

At H+K China, we see the whole picture. We partner with our clients to find solutions. We help them successfully engage with their policy and regulatory stakeholders, to pre-empt and respond to the fundamental policy challenges facing their businesses. We focus on outcomes rather than processes and enable our clients to move with and shape public opinion. For further information, please contact Philippe.Healey@hkstrategies.com and Benjamin.Cooper@hkstrategies.com.