Launch of the Third Plenum
...and China leads renewables construction, America’s fentanyl crisis has Chinese characteristics
Yesterday in the People’s Republic of China (PRC) marked the launch of the much-anticipated Third Plenum, a significant meeting held by the Central Committee of the Chinese Communist Party (CCP) which takes place every five years. Historically, it has been a platform which has introduced sweeping economic and political reforms, such as Deng Xiaoping’s reform and opening-up policies (改革开放) with the Third Plenum in 1978. Expectations are different for this Third Plenum: Xi Jinping’s focus will be on consolidating past achievements through incremental changes, achieving technological supremacy and ‘common prosperity’, strengthening the Marxist party, and maintaining political and social stability amid fierce international competition — particularly with the United States (US).
Analysts have tempered expectations about the measures proposed to address enduring issues between the party-state and the market, State Owned Enterprises, financial arrangements between the central and local governments, labour mobility, and health-care. Will the CCP’s reform solutions be as much of a flop as England’s performance in the European football championship? Only time will tell as the CCP continues its march towards socialist modernisation.
1.1 Third Plenum: Prescribing solutions to China’s domestic issues
The CCP is convening its Third Plenum this week to tackle a wide range of economic challenges, including slowing growth, a property sector crisis, high local government debt, unemployment and flagging consumer demand. Observers expect to see reforms to boost technological self-reliance and stabilise local finances.
1.2 The PRC is spearheading global wind and solar projects
The PRC’s construction of wind and solar projects accounts for nearly two-thirds of the global total, reaching 339 gigawatts and exceeding its own targets by six years. Yet, the PRC’s ongoing dependency on coal and the need for improved energy storage and grid flexibility pose challenges to its green energy goals.
1.3 PRC and Russia launch joint naval exercises
On 14th July, the PRC and Russia commenced ‘Maritime Cooperation - 2024’ joint naval exercises in Guangdong. This comes days after the North Atlantic Treaty Organisation (NATO) labelled the PRC as a ‘decisive enabler’ of Russia’s full-scale invasion of Ukraine. The drills feature anti-missile exercises, sea strikes, and air defence manoeuvres.
1.4 The PRC’s economic growth slows in third quarter
On 15th July, the Central Committee of the CCP announced that the Chinese economy grew by 4.7% in the second quarter of 2024, compared to the previous year. This figure fell short of economists’ expectations of a 5.1% rise and followed a 5.3% growth in the first quarter of 2024. The Chinese economy has been struggling with weak consumer demand and a prolonged property slowdown, while Beijing has set a full-year economic growth target of about 5%.
1.5 Chinese cottage fentanyl industry sustains America’s crisis
The fentanyl crisis in the US is partly cooked up in China. Hundreds of thousands of small chemical plants in the PRC synthesise the fentanyl precursor chemicals which are then transported to drug cartels in Mexico via money laundering networks. Despite efforts to control fentanyl production, the PRC’s complex mix of regulatory challenges and profit motives within its chemical and pharmaceutical industries have complicated efforts to address the crisis effectively.
1.6 PRC weaponises archaeology to justify claims over Xinjiang
The PRC is using archaeological discoveries to justify historical claims over the region and support its policies. Experts dispute these claims, arguing that ancient dynasties’ control over Xinjiang was sporadic, and that the region’s Buddhist history reflects broader cultural exchanges along the Silk Road rather than Chinese dominance. The government is systematically removing Islamic cultural symbols in Xinjiang and transforming archaeological sites into tourist attractions which emphasise a Han-centric view of history.
1.7 Chinese food safety scandal sparks government scandal
Public outrage has erupted in the PRC after it was revealed that state-owned company Sinograin and private conglomerate Hopefull Grain and Oil Group transported cooking oil in the same tankers used for fuel, without cleaning in between. In response to the scandal, the Chinese government has launched an investigation and pledged severe punishments for those responsible for any malpractice.
2.1 A report by Lowy Institute argues that AUKUS is essential for enhancing Australia’s deterrence capabilities and responding to rising threats from China’s military expansion through nuclear-powered submarines (SSNs).
2.2 A report by the European Council on Foreign Relations argues that the European Union (EU) must transition from a narrowly focused, risk-averse economic security strategy to a more proactive framework that can effectively navigate the rising geoeconomic challenges from the US, China, and Russia. This involves enhancing intelligence capabilities, streamlining policy coordination, and forming comprehensive techno-industrial alliances to strengthen its global competitive edge.
3.1 Keir Starmer remarked on the ‘challenge of China’ at NATO Summit
On 11th July 2024, at the NATO Summit in Washington, Keir Starmer, Prime Minister, reaffirmed the UK’s unwavering commitment to NATO, Ukraine, and collective security amidst rising global threats, including the ‘challenge’ posed by the PRC.
3.2 Strategic Defence Review to address ‘deadly quartet of nations’ including China
Today, on 16th July, the government announced its plans for the next Strategic Defence Review to guide the UK in 'a more dangerous and volatile world'. The review will be led by former NATO Secretary General Lord Robertson, along with Fiona Hill, former US presidential advisor, and Gen. Sir Richard Barrons, former Commander of the Joint Forces. Speaking about the threats facing the UK, Lord Robertson warned of the 'deadly quartet of nations increasingly working together', in reference to China, Russia, Iran and North Korea.
3.3 Solar farm linked to Uyghur forced labour to be constructed in the UK
Last week, Ed Miliband MP, Secretary of State for Energy and Net Zero, approved a 2,105-acre solar plant on the Rutland and Lincolnshire border, to be developed by Canadian solar. Canadian Solar has widespread and well documented links to Uyghur forced labour, with its primary suppliers Longi Green Energy Technology Co Ltd., Hongyuan New Material (Baotou) Co. LTC and Tongwei Solar Co. Ltd all having exposure to either the Xinjiang Production and Construction Corps (XPCC) or state sponsored ‘poverty alleviation’ initiatives linked to allegations of detainment and forced labour of the Uyghur minority group.
4.1 On 12th July, the CCP responded to the NATO Washington Summit Declaration, in which Beijing’s deepening strategic partnership with Russia - including economic and political support for Russia’s war efforts, cyber activities and rapid expansion of its nuclear arsenal – were denounced. As predicted, the response didn’t indicate any signs that the PRC would accept accountability.
Lin Jian, Chinese Foreign Ministry spokesperson, stated:
We firmly reject NATO’s vilification and blame-shifting against China. NATO should not use China to justify its insertion into the Asia-Pacific and attempt to disrupt regional dynamics. China is a force for world peace, a contributor to global development and a defender of international order. Our objective and just position and constructive role on the Ukraine crisis and international and regional hotspot issues are widely recognized by the international community. We urge NATO to form the right perception of China, get rid of its Cold War mentality and zero-sum approach, stop scaremongering on security and making imaginary enemies, stop forming exclusive clubs in the name of collective defence, and play a constructive role for global peace, stability and development.We firmly reject NATO’s vilification and blame-shifting against China. NATO should not use China to justify its insertion into the Asia-Pacific and attempt to disrupt regional dynamics…We urge NATO to form the right perception of China, get rid of its Cold War mentality and zero-sum approach, stop scaremongering on security and making imaginary enemies, stop forming exclusive clubs in the name of collective defence, and play a constructive role for global peace, stability and development.
4.2 The PRC claims that the Philippines is destabilising the South China Sea by misusing an outdated and invalid arbitration award to mask its own territorial infringements and provocations. The arbitration in question refers to the case initiated by the Philippines in 2013 against the PRC under the United Nations Convention on the Law of the Sea (UNCLOS), with the Hague Permanent Court of Arbitration ruling in 2016 that the PRC’s claims over the South China Sea have no legal basis. According to People’s Daily, the South China Sea arbitration case was ‘a pure political drama staged in the name of the law with the United States pulling strings behind the scenes.’
The Philippines is warned to ‘proceed cautiously and choose the right path instead of continuing in the wrong direction.’
Gray Sergeant, Research Fellow on the Indo-Pacific at the Council on Geostrategy, writes:
Last weekend, honour guards performed their final handover ceremony in front of the large bronze statue of Chiang Kai-shek, at his memorial hall in central Taipei. Going forward, the service will be performed down the steps from the hall, on Democracy Boulevard.
The move, Taiwan’s Ministry of Culture has explained, is part of ‘removing the cult of personality’ around the country’s former dictator and ‘ending [the] veneration of authoritarianism’.
Taiwan has long had to grapple with the legacy of its former president and the martial law, ‘White Terror’, he ushered in. Many readers will, no doubt, be familiar with the Cihu Park in Taoyuan which has become home to hundreds of Chiang statues which have been removed from public spaces. Yet the names of places, roads and buildings still bear the mark of the Generalissimo.
Of course, in Taiwan, like elsewhere, the past is contested. For all those who oppose such changes, there are others who wish the process was faster. Indeed Tsai Ing-wen frequently faced calls to deal with the memorial hall – suggestions ranged from removing the Chiang statue to demolishing the hall altogether. These calls went unanswered.
With the relocation of the honour guard, her successor has made a notable, albeit small, step towards meeting the demands of those calling for transitional justice. Whether the Lai Administration will dare to go further remains to be seen.
Avid China-watchers will know there has been a tonne of US-China news over the past week. Some of you may have seen these T-shirts featuring Donald Trump raising his fist and shouting ‘fight!’ after his assassination attempt, as they sprung up on Chinese e-commerce platforms Taobao and JD.com over the weekend for the equivalent of a couple of pounds each. Iconic.
You may ask, how has the CCP responded to Trump’s brush with death? What about Biden’s recent moves to negotiate agreements about the future of Tibet? Well, you’ll have to wait for Thursday’s newsletter. Please check back in then!
- Liddy
If you would like to explore any of the Council on Geostrategy’s PRC-focused research papers, click here to visit the China Observatory.