Xi Jinping will be desperate not to repeat his mistake of ten years ago.

These new quality productive forces, as he described them, involve advanced productivity freed from traditional models of economic growth.

There is also a plan for a pan-state effort, led by Beijing, to address technological bottlenecks such as advanced computer chips, where the West, and the United States in particular, has a significant lead over China, while overtaking the United States and dominating other key emerging technologies.

China faces a number of issues that the plenum will also have to address.

Xi Jinping's crackdown on real estate developers and big tech companies in 2021 has dealt severe blows to China's private sector and its consumers.

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The real estate sector has entered a downward spiral, with developers collapsing and sales and prices falling steadily, although there have been tentative signs very recently that a series of government policies aimed at stabilizing the sector may be having some effect.

The publicly traded private tech sector has seen its market capitalization shrink by about $3 trillion due to the crackdown.

Due to the crackdown on real estate and technology companies, where private companies accounted for about 55% of the value of all Chinese listed entities in 2021, they were down to about 35% by the end of last year.

This reflects broader trends in the economy.

Private companies, which generated a disproportionate share of China's growth a decade ago (60%), now provide less than half of it, after Beijing poured resources into state-owned or controlled companies as part of strategies to merge the economy with the military industry. The Party has tightened its control over private companies.

While China has said it now wants to treat private entities on an equal footing with state-owned entities, private sector confidence and willingness to invest have been shaken by the events of the past three years.

Foreign investor confidence has also weakened, despite concerted efforts by Chinese leaders to attract foreign investment. Last year, for the first time in a decade, there was a net outflow of foreign investment.

China's deteriorating trade relations with its largest Western markets, the United States and Europe, are not helping and pose a threat to Xi's strategies.

China's focus on expanding manufacturing and exports to offset weak domestic demand has run into trade barriers in the United States and, reportedly, Europe, because of the threat that Chinese factory overcapacity poses to their domestic industries.

The United States and its allies are also restricting China's access to some building blocks of advanced technologies, such as new generations of semiconductors and the machinery needed to make them.

Domestic consumption, perhaps because of the wealth shock created by the implosion of the real estate sector, has remained weak and so far Beijing's efforts to boost it have been modest.

China faces a number of issues that the plenum will have to address.

The real estate sector's woes have also exposed vertical fiscal imbalances in the economy, with Beijing collecting most of the revenue while local governments do most of the spending.

This has made local governments dependent on land sales and high levels of off-balance sheet financing to fund their operations, with the severe real estate downturn leaving many local governments at financial breaking point.

The plenum will inevitably have to do something to reform this imbalance between revenues and expenditures and bail out the most affected local authorities. It could also do more to help restore activity in the real estate sector, a prerequisite for restoring consumer confidence and spending.

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It is unlikely that any particularly bold measures will be announced at this plenary session. Xi Jinping has decided to no longer prioritize growth, but national security and geopolitical dominance.

The plenum is also unlikely to provide many details on its plans to challenge the United States in advanced technologies that will determine future geoeconomic and geopolitical leadership.

It was Xi Jinping's detailed Made in China 2025 plan, published ten years ago, that first alerted the rest of the world to his economic ambition for motivated and incentivized domination of key 21st century technologies and, through this domination, geopolitical leadership.

This triggered a backlash against the export trend towards that dominance, which led to a steady increase in China's trade barriers in the West. He is unlikely to make the same mistake.

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