Top Chinese officials have convened for the important "Third Plenum" meeting in Beijing to discuss the future direction of the world's second-largest economy. The four-day meeting, led by President Xi Jinping and the ruling party's 205-member Central Committee, comes as China announced lower-than-expected second-quarter growth.

Official statistics reveal that China's economy grew by only 4.7% between April and June, significantly below the 5.1% growth expected by analysts. This marks the slowest expansion rate since the first quarter of 2023, when the country was emerging from its growth-crippling zero-Covid policy. The National Bureau of Statistics acknowledged that the external environment is complex and intertwined, while domestic effective demand remains insufficient.

Experts attribute China's economic slowdown to a combination of internal and external factors, worsened by an aging population with reduced spending power. Tensions with the United States and the European Union, resulting in trade disputes, have also hampered growth. Moreover, the beleaguered real estate market, historically a crucial driver of China's construction boom, has struggled, with leading property firms facing debt and potential liquidation.

During the opening of the Third Plenum, President Xi outlined a draft decision of the Communist Party Central Committee on further comprehensively deepening reform and advancing Chinese modernization. While the party has expressed its plans for major reforms, no specific details were provided. Analysts anticipate that the meeting will focus on longer-term economic goals, with a potential emphasis on expanding high-tech manufacturing and providing support to the housing sector.

However, economists at Moody's Analytics believe that the meeting may result in only modest policy tweaks rather than transformative changes. They anticipate potential expansions in high-tech manufacturing and efforts to support the housing and household sectors. The People's Daily, the Communist Party's official organ, has also tempered expectations, warning that reform is not about changing direction and transformation is not about changing color.

The Third Plenum holds significant importance as it sets the agenda for China's economic policies and reforms moving forward. As the country grapples with various challenges, including weakened domestic demand and trade tensions, the outcomes of this meeting will shape the trajectory of China's economic recovery and future growth.