China’s Fourth Plenum Focuses on Industrial Strength Ahead of Xi-Trump Meeting

• Pivot to Asia Asia · Geoeconomics
  by Filippo Fasulo, Guido Alberto Casanova, Paola Morselli and Michele Danesi
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Between October 20 and 23, the 20th Central Committee of the Communist Party of China (CPC) reconvened for the fourth plenary session of the current term, commonly known as the Fourth Plenum. Expectations were high, as the government had announced that it would approve the 15th Five-Year Plan - China's key economic planning document - amid months of ongoing international tensions over US tariffs and their consequences on global trade. Personnel appointments and industrial self-reliance are among the main themes that emerged during the four-day-long meeting. The main outcome in this regard is that Xi Jinping's leadership is still engaged in a struggle for power, while on the economic front, the country will continue to rely strongly on the manufacturing sector. Against this backdrop of political consolidation and external pressure, Xi Jinping is expected to meet with Donald Trump at the upcoming APEC Summit in South Korea, in what could become a pivotal encounter to redefine the tone of US-China relations and continue easing the current spiral of economic confrontation. and continue easing the current spiral of economic confrontation.

Why it matters

1. Stick to the Plan. The 15th Five-Year Plan set out several principles to follow and goals to achieve by 2030. These include pursuing high-quality development, making a "substantial leap" in scientific and technological strength and self-reliance, progressing in the construction of a "Beautiful China", and consolidating the national security shield. The communiqué explicitly emphasized the industrial apparatus: China will continue in the modernisation of its industrial system in an effort to strengthen "the foundation of the real economy", hence reaffirming the need to accelerate development of "high-quality production forces". The importance of stimulating domestic demand and the promotion of consumption also emerged among the main priorities for the next five years - with a focus on improving the well-being of people and moving towards the 2035 goal of achieving the per capita GDP of "moderately developed" countries.
2. Political purges, a new episode. On the eve of the Plenum, several expulsions of high-level figures from the CPC had already been announced, marking yet another episode in the long series of political and military purges that has been taking place since 2023. In total, nine people belonging to the People's Liberation Army (PLA), along with five political figures, were expelled from the Party. Among these, the most prominent figure was General He Weidong, Vice Chairman of the Central Military Commission (CMC), who was just below the CMC Chairman Xi Jinping. Particularly relevant is also the purge of Major General Zhang Fengzhong, Director of the Political Work Department of the PLA Rocket Force, whose name was the only one that had not been announced before the Fourth Plenum. Admiral Miao Hua's post as CMC member remains vacant, while General Zhang Shengmin was promoted as Vice Chairman, filling He's position in the CMC but not his previous post in the Politburo.
3. A Fourth Plenum that sounds like a Fifth. The delay of the Third Plenum - held in September 2024 instead of the Autumn of 2023 - led to a reshuffling of the CPC agenda and of the themes discussed. Indeed, while traditionally the Fourth Plenum is focused on ideological issues, this time the assembly revolved around the Five-Year Plan, a topic usually discussed during the Fifth Plenum of each legislature. This marks an important turning point: the 20th Congress of the CPC is charting a new course of action, breaking with the past political praxis and changing the long-established traditional cycle of plenary meetings and issues discussed. This marks yet another sign of the growing uncertainty that clouds Xi's mandate and his political line.
4. Win-win cooperation is back, and of "high quality". The communiqué also states that China will expand its high-standard opening up in the global arena paving the way for a "new stage of win-win cooperation" through sustained support of the multilateral trade system, investment and cooperation - including those related to what was called "high-quality Belt and Road cooperation" -, in an effort to advance "common development". This remark underlines how China positions itself in the current global economic landscape: a supporter of the multilateral commercial system, integrated into its institutions and ready to make use of its role, values and norms to foster cooperation - with the Global South and beyond.

OUR TAKE

While the Western world is looking at China through the industrial overcapacity lenses, the communiqué of the Fourth Plenum clearly stated that sustaining the development of high-quality manufacturing and strengthening scientific self-reliance remain at the top of China's agenda, in a national effort to reach a sound and innovative industrial base. The 15th Five-Year Plan is thus fully consistent with the current global geoeconomic context, governed by the principle of economic security. The main consequence is that the transition towards increased consumption can wait: the need for fiscal stimulus and higher domestic demand, although acknowledge as a problem and mentioned in the communiqué, should come at a second moment. What seems increasingly evident, however, is a push toward weaponizable dependency and the strategic use of industrial and technological interdependence as a source of leverage in global politics. China is not merely seeking resilience, but also the capacity to influence external actors through its dominance in key supply chains and advanced sectors. In this context, the upcoming Xi-Trump meeting at the APEC Summit could play a crucial role: depending on its outcome, it may either ease the ongoing economic confrontation by consolidating a framework for trade dialogue or further entrench both countries in their respective strategies of economic securitization and controlled interdependence.

SPOTLIGHT: Japan's right-wing turn with Takaichi

Japan has a new Prime Minister and, for the first time, it is a woman. However, Sanae Takaichi is unlikely to be good news for gender equality as she brings a well-known stream of right-wing national conservatism back into power in Tokyo. Takaichi won the leadership of the Liberal Democratic Party early this month and, after a swift realignment of the governing coalition, was elected PM on the 21 October. Her government sets off from a precarious position with an untested coalition ally, the absence of a reliable parliamentary majority, and an economic situation complicated by resurgent inflation. Her strongly conservative views have also provoked some concerns among East Asian countries, particularly South Korea and China: her frequent visits to the controversial Yasukuni Shrine - where some World War II criminals are honored among many other fallen soldiers - and her hawkish views on defence and military affairs open for them the old scars left by Tokyo's imperialist past. At the same time, Takaichi is likely to maintain a close political alliance with the US - despite the tensions provoked by Trump's tariffs - and will encourage deepening ties with Taiwan, which she has long championed.

WHAT AND WHERE

Trump will face Xi at APEC: what future for US-China relations?

When the US Department of Trade announced a new tightening on export control restrictions on Chinese firms on September 30, it triggered a new tit-for-tat escalation in the first half of October - partially undoing the process of trade stabilisation reached since the Xi-Trump phone call on September 19. China responded, first, by announcing limitations on the export of five additional rare earths elements; Beijing later decided to apply an extra port tariff on US ships docking in China, effective the following day. This last measure was meant to mirror a similar US tariff targeted at Chinese ships, which had already been announced by Washington and was going to be enforced starting on October 14. The US were quick to announce a retaliating 100% tariff on imports from the PRC, but the main outcome of a new round of negotiations conducted by He Lifeng and Scott Bessent in Malaysia obtained cancellation of threatened tariffs, an agreement on trade of rare earths and soybeans, in what they called a "framework agreement […] ahead of Trump-Xi meeting", which is going to happen at the APEC Summit in South Korea on Thursday, October 30.

Pakistan's crackdown on terrorism leads to clashes with Afghanistan

A week of military clashes has taken place between Pakistan and Afghanistan, triggered by an airstrike carried out by Islamabad on October 10 in Kabul. Pakistan states that the 30 victims of the attack were afghani soldiers who had been involved in the killing of 11 Pakistani military officials on October 7. The event led to an Afghan attack to Pakistani military posts on the shared border on October 11, and Islamabad's further retaliation with drone airstrikes the following day. The conflict continued until Sunday 19, when a ceasefire was brokered by Qatar and Türkiye. The truce was then extended, with both parties agreeing to meet in Istanbul to discuss further steps towards stabilizing the situation. Pakistan's major concern remains Afghanistan's alleged role in financing and harbouring the terrorist group Tehrik-e-Taliban Pakistan (TTP, also known as Pakistani Taliban), claims that have been confirmed by several sources but denied by the Taliban government. Furthermore, during the last weeks India has been strengthening ties with Afghanistan, constituting another source of concern in Islamabad.

More Chinese involvement and a new chapter in Myanmar's civil war?

The Myanmar military junta carried out a major deadly attack in the early morning of Tuesday, October 7, targeting civilians in Chaung-U Town, in the Sagaing region. Attackers used motor-powered paragliders in two separate strikes to drop artillery and explosives over a crowd, which had gathered the night before in a candlelight vigil in opposition to the military regime, the vigil had been organized in correspondence with the Full Moon night of Myanmar's Thadingyut Festival. Initial reports counted about 20 casualties, but local press sources reported 32 victims and over 50 injured in total. Despite allegations of difficulties for the Myanmar junta to access resources such as fuel, the army has managed to gain back control of some territory in 2025. This renewed strength for the military junta was mainly due to Chinese support, which has increased in the past year - despite Beijing still maintaining relations also with the opposition forces -, especially through the supply of military drones used in counteroffensives in the States of Kachin and Kayin. But China is not the only "powerful friend" that the junta has made: Gen. Min Aung Hlaing recently held talks in Tianjin with Kim Jong Un and Narendra Modi, who were in China for the SCO Summit, and the Indian leader has made public statements about Myanmar being a "vital pillar" for the country, giving signals of a warming relation between the two.

Pyongyang's military parade shows North Korean comeback

On the October 10, North Korea held an important military parade on the streets of Pyongyang to celebrate the 80th anniversary of the foundation of the country's ruling communist Workers' Party of Korea. This was an opportunity for the North Korean leadership to show off its nuclear arsenal developed including the Hwasong-20, which is the most advanced intercontinental ballistic missile with the capacity to strike anywhere on the US mainland. Amid ongoing discussions of a possible new meeting between Donald Trump and Kim Jong Un, the display was likely a reminder to the rest of the world that the nuclear status of North Korea has now become irreversible. However, weapons were not the only thing Pyongyang had to show, as high-level foreign delegations were also present at the parade: former Russian President Dmitry Medvedev, Vietnamese Communist Party leader To Lam, and Chinese PM Li Qiang had all travelled to North Korea to celebrate the anniversary. Particularly relevant was the presence of the Chinese PM, absent from the country since 2009: in Pyongyang, Li vowed that China would continue to work with North Korea to develop the international order in a "more just and equitable direction". His attendance and statements suggest a continued trend of warming relations between China and North Korea after Kim visited Beijing last month and met with Xi Jinping and Putin.

TREND: New capacity (yearly) of Chinese-funded power plants abroad

The bar graph above shows China's commitment to fund energy production offshore. It shows that, as of May 2025, Beijing has committed to investing in building fewer power plants abroad in the next four years, compared with the last decade. By 2029, the additional capacity generated by their investments will potentially shrink to less than 25% of what is currently expected in 2025. A trend to notice is how the share of additional capacity generated by fossil fuels has already been declining - even though coal still represents the biggest share in 2025 - in favour of renewable sources, particularly solar and hydropower. It is also relevant to notice the increase in production of nuclear power, that has characterized Chinese investments in foreign energy plants particularly due to the ongoing construction of the "Hinkley Point C" energy station in the UK, where the Chinese state-owned company CGN is financing about 33% of total construction costs. The external strategy of China mostly reflects its internal approach to energy: even though fossil fuels still occupy a major share of Beijing's energy production - led by coal -, the country is the biggest domestic producer of electricity through renewables sources and is focusing on these energies for the new stations it plans to build in the future.

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