Why China’s Third Plenum Matters for Global Investors

Of the countless meetings that China’s Communist Party holds regularly, the Third Plenum stands out for its potential impact on the world’s second-largest economy. The typically once-in-five-years conclave of top officials usually deals with major economic and political policy changes. Paramount leader Deng Xiaoping famously used the 1978 event to announce China’s opening up and pivot to allow market forces to play a role in what was then a Soviet model of central planning. On July 15, President Xi Jinping will convene the closed-door meeting after a rare delay. Investors will be watching closely for any efforts to restart China’s sputtering economic growth engine.

A plenum is a full meeting of the Communist Party’s Central Committee. This body officially announces the party’s most important policies and personnel rosters, although in reality it rubber-stamps decisions made by a much smaller group of party elites, chief among them Xi.