China's Fourth Plenum Convenes Amid Deepening Economic Challenges

The Chinese Communist Party's (CCP) Fourth Plenum of the 20th Central Committee is currently underway in Beijing, from October 20 to October 23, 2025. This crucial four-day gathering sees top officials deliberating on the draft proposals for the nation's 15th Five-Year Plan (2026-2030), a blueprint intended to guide China's economic and social development for the latter half of the decade. The plenum's discussions are taking place against a backdrop of a worsening economic downturn, characterized by a persistent real estate crisis, faltering exports, and subdued domestic demand. Security has been notably tightened around the Jingxi Hotel, the venue for the closed-door sessions.

Economic Headwinds Dominate Agenda

China's economy is facing considerable challenges, with recent data highlighting a significant slowdown. The nation's GDP grew by 4.8% in the third quarter of 2025, a decrease from 5.2% in the previous quarter and marking its slowest pace in a year. This figure aligns with projections from the World Bank and the ASEAN+3 Macroeconomic Research Office (AMRO), both forecasting China's 2025 GDP growth at 4.8%.

The real estate sector remains a major drag on the economy. A prolonged slump, exacerbated by issues such as the bankruptcy of Evergrande, has eroded household wealth, dampened consumer confidence, and strained local government finances. Property investment plunged by nearly 14% in the most recent quarter, with new home prices continuing their decline in September and residential property transactions falling by 12.5%.

Exports, traditionally a key growth driver, are also under pressure. While China has diversified its export markets, shipments to the United States fell by a notable 27% in September due to ongoing trade tensions. Domestically, weak consumer spending persists, linked to low business and household confidence, high youth unemployment, and a limited social safety net. Retail sales growth slowed to 3.5% in September, further indicating muted demand. Additionally, industrial overcapacity, particularly in high-tech sectors like electric vehicles and green technologies, is contributing to deflationary pressures and exacerbating trade tensions.

Policy Focus and Future Direction

President Xi Jinping delivered a work report outlining the party leadership's proposals for the 15th Five-Year Plan. The plenum is expected to prioritize several key areas to address the economic challenges:

• Technological Self-Reliance and Innovation: Significant investment in high-tech sectors, including artificial intelligence, is anticipated to bolster China's economic security against external restrictions.
• Boosting Domestic Consumption: Policies aimed at strengthening the social safety net and easing restrictions on consumer credit are expected to stimulate internal demand.
• High-Standard Opening-Up: The plan is likely to emphasize further integration of China's economy into the global system, adhering to international rules and standards.

The discussion of the Five-Year Plan at the Fourth Plenum is an unusual move, as this agenda item typically falls to the Fifth Plenum, a shift possibly influenced by the delayed Third Plenum in August 2024. Beyond economic policy, the plenum is also a focal point for speculation regarding a large-scale personnel reshuffle, including recent military purges, which adds a political dimension to the proceedings.

Outlook

As the Fourth Plenum concludes, the focus will shift to the communiqué summarizing its outcomes, which is expected to provide initial insights into the 15th Five-Year Plan. The full details of the plan will likely be unveiled at the National People's Congress in March 2026. The decisions made during this plenum are critical for charting China's economic course amidst significant domestic and international headwinds, aiming to balance growth with stability and strategic independence.