China Confirms 4th Plenum for October With Growth Constraints Front of Mind
With weak household demand and strained local finances, China’s long-term growth strategy faces mounting structural pressure ahead of the 15th Five-Year Plan.
The Communist Party of China will convene the fourth plenary session of its 20th Central Committee in October, state media confirmed Wednesday, with preparations underway to lay out the next Five-Year plan for national development. The session will include a work report from the Politburo and begin formal deliberations on the 15th Five-Year Plan, which will guide China’s economic and social priorities through 2030.
This agenda marks a notable departure from recent precedent. Historically, fourth plenums have focused on internal Party governance and political reform: the 18th Central Committee’s 2014 plenum centered on Rule of Law, while the 19th in 2019 addressed the modernization of China’s governance system. Earlier plenums emphasized Party-building and strengthening leadership capacity. This year’s focus on long-term economic planning instead suggests a shifting urgency within the Party’s priorities, away from institutional refinement and toward economic course correction.
General Secretary Xi Jinping chaired the Politburo meeting that set the agenda, which also included an assessment of the country’s economic trajectory heading into the second half of the year.
Official language described the upcoming plan as a “crucial phase” for consolidating gains and advancing socialist modernization, echoing previous cycles. But the backdrop this time is different. China's leadership now faces a more complex set of conditions than at any point since the aftermath of the global financial crisis in the early 2010s: weak household demand, structural property malaise, and growing pressure on local finances are colliding with the country’s longstanding reliance on investment and export-led growth.
While the Politburo’s statement emphasized China’s “strong resilience” and “great potential,” recent figures tell a more cautious story. Land-sale revenue — long the fiscal lifeblood of local governments — dropped 11.9% year-on-year in the first five months of 2025. That decline has left municipal budgets under strain and narrowed the public spending base that once drove rapid GDP expansion.
As we’ve previously noted at The Asia Cable, “China’s model sits in a feedback loop: a property slump hollows out local coffers, shrinking investment, which in turn suppresses incomes and confidence, making it even harder for households to power the economy on their own.” Household consumption accounted for just 39% of GDP in 2024, according to World Bank estimates, a figure nearly 20 points below the OECD median.
The same challenges have cast doubt on Premier Li Qiang’s promise of “relatively rapid” growth during his June 25 remarks at the Summer Davos Forum in Tianjin. While retail sales have rebounded modestly, service-sector PMI readings have remained in contraction territory for much of 2025. Youth unemployment continues to hover around 15%, and household savings exceed 40% of GDP.
State media has framed the 15th Five-Year Plan as an opportunity to “consolidate the foundation” for long-term growth, but past pledges to rebalance toward consumption have rarely translated into lasting structural shifts. As noted, fiscal decentralization, limited social transfers, and capital bias toward state-owned and industrial sectors have left households sidelined.
Complicating matters further is the rise in trade friction as China’s industrial output continues to outpace domestic demand. With various sectors producing far beyond what the local market can absorb, surplus goods have increasingly been redirected abroad, prompting backlash from key trading partners. The European Union has opened investigations into subsidized Chinese exports, while the United States has signaled tighter controls on high-tech imports. These developments threaten to close off external pressure valves that once helped absorb China’s excess capacity, forcing greater urgency in addressing domestic imbalances.
Internally, the Party faces the growing challenge of aligning its economic priorities with the incentives that underpin cadre promotion and local governance. Infrastructure and industrial expansion remain the clearest path to political capital for provincial officials, while consumer-led growth requires a redistribution of both fiscal power and policy focus. Without meaningful shifts in how local officials are rewarded and how resources are allocated between the state and household sectors, even a well-intentioned Five-Year Plan will struggle to move beyond policy signaling.
October’s plenum may offer clues to how Beijing plans to stabilize growth without falling back on large-scale stimulus or renewed overcapacity. But the Party will need to confront deeper questions around income distribution, local fiscal resilience, and the social safety net before consumption can begin to meet the ambitions placed upon it. Certainly, Beijing’s decision to center this fourth plenum on economic planning makes it clear that growth optimization now stands as the Party’s most pressing domestic priority.
The views and information contained in this article are the author’s own and do not necessarily represent those of The Asia Cable.