China’s Communist Party meets to set direction for troubled economy

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After months of unexplained delay, top officials from China’s ruling Communist Party are gathering in Beijing this week to signal the direction forward for the world’s second largest economy as it faces major economic challenges and friction with the West.

Stakes are high for the meeting, which takes place every five years and is known as China’s third plenum. It has historically been a platform for the party’s leadership to announce key economic reforms and policy directives.

China is grappling with a property sector crisis, high local government debt and weak consumer demand — as well as flagging investor confidence and intensifying trade and technology tensions with the United States and Europe.

Those challenges were underscored by its latest economic growth data, which were announced Monday. China’s gross domestic product expanded by 4.7% in the April to June months, compared to the previous year.

That represents a slowdown from the 5.3% growth reported for the first quarter and also missed the expectations of a group of economists polled by Reuters who had predicted 5.1% expansion in the second quarter.

Economic problems on the back of years of stringent pandemic controls have triggered mounting social frustration, as well as questions about the direction of the country under Xi Jinping, its most powerful leader in decades.

Those questions have been underscored by a recent shake-up in the upper echelons of Xi’s government that saw three ministers and a handful of top military officers removed from posts or investigated, a situation that