The Plenum is an annual meeting of the Central Committee of the Communist Party of China – the 376-member grouping that sits atop the pinnacle of state power in China. The Central Committee is further subdivided into key state organs such as the Politburo, Politburo Standing Committee, and the Central Military Commission. Plenums are often less a forum for real debate and more a clearing house for government policy and personnel changes. In the past they have been the stage for the major dramas of modern Chinese history – the fall, and eventual rehabilitation, of major figures of the Revolution and the launching of the reform movement in 1978. This upcoming plenum will be the Fifth Plenum of the 18^th Central Committee, which was assembled in November 2012 and will serve until 2017.

Why is the Fifth Plenum Important?

The Xi administration has thus far been defined by its sweeping crackdown on corruption, executed by the Wang Qishan-headed Central Commission for Discipline Inspection. Thousands of cadres have been arrested and imprisoned since 2013, from the lowly village bureaucrat on the take all the way up to Zhou Yongkang, former member of the Politburo Standing Committee. The crackdown is ongoing, and is pushing into the new frontiers of party discipline and transgressions in the financial sector.

The corruption crackdown stands as a success for President Xi, but it can’t undo his underwhelming performance on the economic front. The Xi administration came into power with a powerful mandate to push ahead with long anticipated reforms, not because of any triumph of liberal ideology, but rather the practical considerations of assuring China’s continued economic growth and deepening its integration, and thus influence, in the world of global finance. When Xi assumed power in 2013, the optimist’s list of necessary reforms might have included: allowing underperforming SOEs to fail, reducing the role of state credit, freeing up private lending for SMEs, dismantling currency controls and allow the yuan to be dictated by market forces, deleveraging local government debt, increasing social spending, and opening up new sectors to foreign competition. Broadly speaking these reforms envision a transition from an export-dependent economy to a consumer spending and services-dependent country ala the United States and, importantly, a consumer-economy that’s open and fair towards foreign companies.