STEVE INSKEEP, HOST:
When an NPR team visited China last spring, people spoke with us with gloom about the economy. Today, some data confirm what they were feeling. The government reports much lower-than-expected GDP growth in the second quarter - also very weak retail sales. This week, China's leaders are meeting in Beijing and have a fresh chance to make some adjustments, if they would like, for the world's second-largest economy, which bears on U.S. economic health, as well. NPR's John Ruwitch is in Beijing. Hey there, John.
JOHN RUWITCH, BYLINE: Good morning.
INSKEEP: What is this meeting?
RUWITCH: So this is a meeting of the Central Committee of the Communist Party of China. This is basically the top 200 or so officials in China. They meet in secret roughly once a year to chart out the direction of policy, and so this is the third full meeting of this Central Committee that was selected in 2022, and it's a big deal here. The security in Beijing is really tight. Plenums like this are an opportunity for the party elite to put their sort of stamp of approval on blueprints of all manner of policy - like personnel, party building, to, of course, the economy - and it's about political framing and signaling. Really, they're going to be telegraphing to the bureaucracy what the policy priorities are for the coming five years.
INSKEEP: OK, so they're getting the message out.
RUWITCH: Yes.
INSKEEP: Are they going to be suggesting changes to their approach to the economy?
RUWITCH: There's a lot of hope they will because of those economic stats that you referred to up top. I mean, we don't know. We won't know until it's over on Thursday exactly what they do. Nobody I've talked to about this ahead of time, though, expects anything like what happened in 1978, which is when the Third Plenum of that Central Committee basically made the reform an opening to drive official policy, completely altering China's trajectory, but the economy is clearly facing some of its biggest challenges in years. Growth's slow. There's a real estate crisis. Local governments are hobbled by debt. That all seems likely to be addressed, at least rhetorically, by the Plenum. There's not a lot of info or consensus on what it'll add up to, and observers who've been trying to read the tea leaves - some think the Central Committee is going to effectively green light strong policies to tackle the key issues, and one of them is Li Daokui. He's an economist at Tsinghua University here in Beijing.
LI DAOKUI: I do see signs, before the Third Plenum, in the past few weeks, that Chinese top policymakers indicate that this round of reform will start with the most urgent and the burning issues, rather than only general principles.
RUWITCH: Others don't see it that way. Robin Xing is with Morgan Stanley in Hong Kong. He says if there were going to be big, bold moves to stimulate the economy or address deflation, the party probably would have been signaling that.
ROBIN XING: The short answer is, I don't think that July's Third Plenum can decisively reflate the economy any time soon, no.
INSKEEP: John, you mentioned reading the tea leaves. I know that analysts and experts will read the state media. What are they saying there, and even if it's not the whole truth, what does it imply? That sort of thing. So when you read the tea leaves, what are some of the - well, some of the key leaves?
RUWITCH: You know, state media say this meeting's about, quote, "comprehensively deepening reform," but the meaning of reform has changed a lot in the 10-plus years that Xi's been in power. It's not so much about freeing up markets anymore, but it's rather about having a strong Communist Party in command, reforming the economy to be more self-sufficient, more competitive, and that's particularly in advanced manufacturing and cutting-edge tech sectors. This is what Xi Jinping calls the new quality productive forces, which is a term we're going to be hearing a lot. A big driver of this approach is what Beijing sees as an increasingly dangerous external environment and including hostility from the United States. They're certainly watching what happens in the U.S, in the U.S. presidential campaign, too. You know, Xi was very quick to express sympathies to former President Trump after that attempted assassination, but the election, and even the U.S, are probably unlikely to be mentioned explicitly in the policy platform that emerges.
INSKEEP: NPR's John Ruwitch. Thanks so much.
RUWITCH: You're welcome.
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