Article image

The Great Hall's Reckoning: Xi Jinping's Blueprint for a Fortress Economy

The Mirage of Peace in Gaza's Second Act

Monday, 20 October 2025 08:46

Abstract

A closed-door meeting of China's Communist Party elite is underway in Beijing to finalise the nation's next five-year economic and social blueprint, a document that will govern the period from 2026 to 203025. The session takes place against a backdrop of significant domestic and international turbulence, including a sharp slowdown in economic growth to 4.8% in the third quarter of 20252,7, escalating trade hostilities with the United States17, and a sweeping, high-profile purge of senior military leadership8,14. The new plan is expected to double down on technological self-reliance and national security, signalling a strategic shift toward insulating the world's second-largest economy from external shocks15,24.

Historical Context

Recent Findings

The Closed Doors of the Fourth Plenum

The Fourth Plenary Session of the 20th Communist Party of China (CPC) Central Committee convened in Beijing on Monday, October 20, 202525. The highly anticipated, four-day meeting is being held behind the heavily guarded doors of the Jingxi Hotel10,12. This gathering brings together approximately 200 voting members and 170 alternate members of the Central Committee, the Party’s top decision-making body11,13. The primary purpose of the session is to review and approve the draft proposals for the 15th Five-Year Plan for National Economic and Social Development, which will chart the country’s course from 2026 to 203024,25. Chinese leader Xi Jinping delivered a speech on the opening day, expounding on the Party leadership’s draft proposals10,12. While the full details of the plan will not be formally released until the National People’s Congress convenes in March of the following year, the Plenum sets the definitive political and economic tone for the next half-decade20. The five-year plan system is a unique institution that embodies the Chinese governance model, combining a long-term strategic vision with pragmatic adaptation to global and domestic realities15,25. The 15th Five-Year Plan is considered a crucial step in the three-plan period designed to achieve the goal of ‘basically realising socialist modernisation’ by 203524,25.

The Purge Before the Policy

The political atmosphere surrounding the Plenum was dramatically charged by a sweeping purge of the People’s Liberation Army (PLA) leadership announced just days before the meeting8,16. President Xi Jinping dismissed nine top generals from both the Party and the military8,9,14. Among those expelled was General He Weidong, who held the position of Vice-Chairman of the Central Military Commission (CMC) and was the country’s second-highest-ranking military officer8,9,16,18. General He’s removal is particularly notable as he was considered a close ally of Mr Xi, and his downfall marks the first time in nearly four decades that a sitting CMC Vice-Chairman has been dismissed16,18. The nine senior officials were accused of ‘seriously violating party discipline’ and ‘suspected of grave duty-related crimes, involving exceptionally large sums of money’14,16,18. The scale of the crackdown is considered one of the largest public purges of the armed forces since the era of Mao Zedong9,14,18. Analysts suggest the purge serves a dual purpose: eliminating corruption and consolidating Mr Xi’s absolute control over the military, which is essential for his stated goal of transforming the PLA into a ‘world-class military’ ready for potential action against Taiwan by 20278,14. The removal of key figures, including General Lin Xiangyang, the former commander of the Eastern Theatre Command, which would lead any military strike against Taiwan, highlights the instability and the paramount importance of political loyalty over professional competence in the current command structure14.

The Weight of Economic Headwinds

The economic data released concurrently with the Plenum underscores the urgency of the new five-year plan7. China’s economy expanded at an annual rate of 4.8% in the third quarter (Q3) of 20253,7. This figure, while in line with market expectations, represents a significant loss of momentum, slowing from the 5.2% growth recorded in the second quarter (Q2) of the year2,3. The 4.8% growth rate is the slowest pace recorded in a year2,7. The primary domestic pressures contributing to this slowdown include a prolonged slump in the property market and persistently weak consumer demand2,7. The property sector, historically a major driver of growth, continues to struggle, while efforts to stimulate household consumption have cooled5. Furthermore, fixed asset investment, a key gauge of business spending, unexpectedly shrank by 0.5% in a monthly contraction, marking the first such decline since the initial phase of the COVID-19 pandemic in 20205. Despite the cooling, the year-to-date GDP growth of 5.2% keeps the country largely on track to meet Beijing’s full-year target of around 5%5,7. However, the loss of momentum has prompted economists to suggest that further measures will be required to stabilise growth7. The economic challenges are compounded by external factors, particularly the escalating trade tensions with the United States2,7.

The Trade War's New Front

The economic friction between Beijing and Washington has intensified in the weeks leading up to the Plenum, creating a volatile international environment17,20. The United States recently expanded its trade blacklist, greatly increasing the number of Chinese companies that are restricted from accessing critical US technology products, such as semiconductors and software17. This move is explicitly aimed at preventing the technology from being used by China’s military17. Beijing responded with a significant countermeasure, announcing sweeping restrictions on the export of critical minerals, including rare earths17,19,23. Rare earth minerals are vital components for a wide range of high-tech products, from jet fighters to electric vehicles, and China dominates their global supply17,23. The US administration, led by President Donald Trump, reacted with outrage, threatening to impose an additional 100% tariff on Chinese imports17,23. In a further escalation, both nations have implemented new port fees on ships carrying cargo between them, a tit-for-tat move that threatens to disrupt global freight flows and increase costs for consumers and businesses worldwide19,23,26. This renewed sparring has thrust trade hostilities back into the global spotlight, with the head of the World Trade Organization warning that a decoupling of the world’s two largest economies could reduce global economic output by 7% over the longer term26. High-level diplomatic engagement has resumed, with US Treasury Secretary Scott Bessent confirming direct dialogue with Chinese Vice-Premier He Lifeng, but the underlying structural competition remains19.

Blueprint for a Fortress Economy

The 15th Five-Year Plan (2026-2030) is expected to formalise a strategic pivot in China’s economic model, driven by the need for resilience against the backdrop of trade wars and technological containment6,24. The central theme of the new blueprint is ‘high-quality’ development, which prioritises innovation and sustainability over sheer speed of growth10,25. A key policy concept expected to feature prominently is the development of ‘new quality productive forces’15,24. This concept moves beyond traditional industrial expansion, envisioning an economy powered by technological innovation, green transformation, and intelligent manufacturing15. The plan will likely focus on achieving technological self-reliance in critical areas, including advanced semiconductors, artificial intelligence (AI), new materials, and clean energy6,15. This drive for scientific independence is a direct response to foreign restrictions on technology access10. Economically, the plan is expected to reinforce the ‘dual circulation’ strategy, which seeks a dynamic balance between internal and external economic flows15. The emphasis will be on expanding domestic demand and boosting the role of consumption in economic growth, alongside efforts to diversify trade partners and reduce reliance on critical imports6,24. Furthermore, the plan will set key targets for ecological civilisation, as the end of the 15th Five-Year Plan period coincides with the deadline for China’s first major carbon emissions target: reaching peak carbon emissions by 20306,15. The overall message is a reaffirmation of a steady, pragmatic vision that places national security and technological sovereignty at the core of economic planning24.

Conclusion

The Fourth Plenum of the 20th Central Committee is a moment of profound strategic recalibration for the Chinese leadership. The simultaneous announcement of a sweeping military purge and the finalisation of a new five-year plan underscores the Party’s commitment to consolidating political control and ensuring national security as prerequisites for economic development8,10,24. The 4.8% Q3 2025 growth figure serves as a stark reminder that the traditional engines of China’s economic miracle—property and exports—are faltering under the weight of domestic structural issues and external trade hostilities2,7. The 15th Five-Year Plan is therefore not merely an economic document; it is a political manifesto for a ‘fortress economy’15,24. It signals a determined shift toward technological self-sufficiency and domestic consumption, a strategy designed to make the nation less vulnerable to the escalating pressures from the United States and the volatility of the global market17,23. The success of this blueprint will determine whether Beijing can navigate the current turbulence to achieve its long-term goal of ‘socialist modernisation’ by 2035, a vision that increasingly prioritises resilience and control over unfettered growth24.

References

  1. Current time information in CN.

    Used to verify the current time in China for context.

  2. China GDP Annual Growth Rate - Trading Economics

    Supports the Q3 2025 GDP growth rate of 4.8%, the slowdown from 5.2% in Q2, and the context of trade tensions and property slump.

  3. China's economy grows 4.8% YoY in Q3 2025, as expected - FXStreet

    Confirms the Q3 2025 GDP growth rate of 4.8% and the Q2 rate of 5.2% from official data.

  4. China GDP rises slightly more than expected in Q3, but growth seen cooling - Investing.com

    Provides the year-to-date GDP figure (5.2%), the full-year target (around 5%), and the specific statistic on fixed asset investment shrinking by 0.5%.

  5. China's 15th Five-Year Plan: What We Know So Far

    Details the expected priorities of the 15th Five-Year Plan (2026-2030), including economic resilience, technological capabilities, diversifying trade partners, and the 2030 carbon-peaking target.

  6. China's Economic Growth Slows to 4.8% in Q3 2025 - Weakest Pace in a Year - Times Now

    Confirms the 4.8% Q3 2025 growth is the slowest in a year and links the slowdown to the property slump, weak consumer demand, and US trade tensions.

  7. Purge unlike any other: Nine top Chinese generals expelled — Why Xi Jinping is cleaning house again - The Times of India

    Details the purge of nine top generals, including He Weidong (Vice-Chairman of the CMC), and the timing just before the Fourth Plenum.

  8. Xi Jinping Fires Nine Top Generals in Anti-Corruption Purge

    Confirms the dismissal of nine senior PLA officers, including General He Weidong, and describes it as one of the largest military purges since the era of Mao Zedong.

  9. Chinese leader Xi Jinping outlines 5-year plan at closed-door Communist Party meeting

    Confirms the meeting started on Monday, October 20, 2025, at the Jingxi Hotel, that Xi Jinping delivered a speech, and that the plan focuses on 'high-quality' development, technological innovation, and national security.

  10. Chinese leader Xi Jinping outlines 5-year plan at closed-door Communist Party meeting

    Provides the number of Central Committee members attending (about 200 voting, 170 alternate) and the duration (four-day meeting).

  11. Chinese leader Xi Jinping outlines 5-year plan at closed-door Communist Party meeting

    Confirms the meeting location (Jingxi Hotel) and the date (Monday, Oct. 20, 2025).

  12. Chinese leader Xi Jinping outlines 5-year plan at closed-door Communist Party meeting - ClickOnDetroit

    Confirms the number of Central Committee members (about 200 voting, 170 alternate).

  13. Chinese Communist Party purges nine senior military leaders for corruption

    Details the purge of nine senior military leaders, the charges ('grave duty-related crimes'), the goal of transforming the PLA by 2027, and the removal of General Lin Xiangyang, former commander of the Eastern Theatre Command.

  14. China's 15th Five-Year Plan to chart a path for high-quality, shared development

    Explains the 15th Five-Year Plan's focus on 'new quality productive forces,' technological self-reliance (AI, semiconductors), 'dual circulation' strategy, and ecological civilisation/2030 carbon-peaking goal.

  15. Xi cleans up: Top military officers dismissed for corruption - Table.Briefings

    Confirms General He Weidong's position as CMC Vice-Chairman, the charges ('serious disciplinary violations'), and the fact that his dismissal is the first of a sitting Vice-Chairman in nearly four decades.

  16. Trade tensions between the U.S. and China are escalating ahead of Trump-Xi meeting

    Details the escalation of US-China trade tensions, including US restrictions on technology (semiconductors, software), China's retaliation with critical minerals/rare earth export limits, and Trump's threat of an additional 100% tariff.

  17. China expels nine top generals from party, military in biggest post-Mao era purge

    Confirms General He Weidong's Politburo membership, the charges ('grave duty-related crimes, involving exceptionally large sums of money'), and the purge's status as the biggest since Mao Zedong's rule ended in 1976.

  18. US-China Trade Tensions Pause Brings Market Relief - Discovery Alert

    Details China's rare earth export restrictions, the imposition of port fees by both nations, and the high-level diplomatic re-engagement between US Treasury Secretary Scott Bessent and Chinese Vice-Premier He Lifeng.

  19. What to know about meeting where China's Communist Party maps 5-year goals

    Confirms the Fourth Plenum is a four-day closed-door gathering (Oct 20-23, 2025) and that the full plan details will likely not be released until the National People's Congress in March.

  20. Truce fizzles as U.S.-China trade tensions return to full boil | MPR News

    Details China's new limits on rare earth minerals exports, Trump's threat of an additional 100% tax, and the imposition of new port fees by both sides.

  21. Party plenum to shape next five-year plan - Ecns.cn

    Confirms the Fourth Plenary Session of the 20th CPC Central Committee is being held from Monday to Thursday, will review the 15th Five-Year Plan (2026-2030), and links the plan to the goal of 'basically realize socialist modernization' by 2035. Also mentions 'new quality productive forces' and enhancing economic resilience.

  22. Key Party meeting to shape China's next five-year plan, 'inject certainty to world'

    Confirms the Fourth Plenary Session of the 20th CPC Central Committee is convening from October 20 to 23, 2025, to discuss the 15th Five-Year Plan (2026-2030), and that the plan will prioritise high-quality development fueled by innovation.

  23. Oil prices slip on concerns over US-China trade tensions - The Economic Times

    Supports the fact that both the US and China have imposed additional port fees and includes the WTO warning that decoupling could reduce global economic output by 7%.