China's top brass is set to convene in Beijing over October 26-29 for the fifth plenary session – a key four day policy-setting meeting that will be closely watched by investors worldwide. Here are five things you need to know.
What's the fifth plenum?
As the name suggests, the fifth plenum is the fifth out of seven major meetings held by the Communist Party's Central Committee, a political body that is made up of the Party's top leaders. The Central Committee is made up of approximately 376 members and alternates.
How often is it held?
The fifth plenum is held in the third year of the Central Committee's five-year term (the current term began in November 2012), and is typically when a draft of the country's new Five-Year Plan (FYP) is reviewed.
What's at the top of the agenda?
Just that. The 13th FYP, a blueprint about 100 pages long that maps the government's main economic and development initiatives for 2016-2020, will be front and center at the meeting.
The document will contain both qualitative goals, such as "building a moderately prosperous society by 2020" as well as quantitative targets on economic, social and environmental issues. The proposals will be discussed again at the December annual Central Economic Work Conference, with the final draft approved at the annual National People's Congress meeting in March 2016.
Why is this Five Year Plan important?
This FYP is the first to be produced under President Xi Jinping's leadership and covers a period during which China's economic growth is forecast to decelerate further.
"It remains to be seen whether China will suffer a destabilizing 'hard landing' during 2016-2020, undergo stagnation or a protracted period of lower growth, or see a reinvigoration of the economy and rebound in growth after meaningful reforms," Barclays said.
As such, growth, rebalancing, upgrading, liberalization and the environment will be the overriding themes in the 13th FYP as the country tries to achieve a development pattern of 'higher quality, efficiency, equality and sustainability,' the bank said.
What will investors look out for?
Investors will be focused on the government's new annual growth target. It is expected to set an average economic growth target of 6.5 percent in the 13th FYP plan period, down from the 7 percent set out in the 12th FYP and 7.5 percent in the 11th FYP.
"If the growth target is set at 6.5 percent, it means the government will tolerate slower growth to allow more space for structural adjustments. In this case, we expect there will be less stimulus efforts by the government," said Deutsche Bank.
"If the target is set at 7 percent, we believe the government will have to maintain its loose policy stance and do more easing."