2024 has been a disastrous year for Chinese President Xi Jinping. For all his rhetoric about the “great rejuvenation of the Chinese nation,” his administration faced stunning setbacks. A military purge aimed at rooting out corruption has instead revealed systemic disarray that continues to undermine preparedness. Unemployment, bankruptcies, and capital flight soared, and economic growth soared. Meanwhile, key partners in Moscow and Damascus have stumbled or fallen, and Beijing’s geopolitical ambitions have suffered. These and other crises have revealed that China is not formidable, but increasingly vulnerable.
If 2024 shatters the illusion of China’s steady rise, 2025 will expose vulnerabilities that Xi Jinping can no longer hide.
2024 has been a disastrous year for Chinese President Xi Jinping. For all his rhetoric about the “great rejuvenation of the Chinese nation,” his administration faced stunning setbacks. A military purge aimed at rooting out corruption has instead revealed systemic disarray that continues to undermine preparedness. Unemployment, bankruptcies, and capital flight soared, and economic growth soared. Meanwhile, key partners in Moscow and Damascus have stumbled or fallen, and Beijing’s geopolitical ambitions have suffered. These and other crises have revealed that China is not formidable, but increasingly vulnerable.
If 2024 shatters the illusion of China’s steady rise, 2025 will expose vulnerabilities that Xi Jinping can no longer hide.
Despite facing mounting problems at home and soon to be emboldened by President Donald Trump in Washington, Mr. Xi does not want dramatic changes or bold reforms. Instead, he is pursuing a policy of patience. That is, to overcome economic stagnation, avoid full-scale confrontation with Washington, strengthen ideological discipline, distract adversaries, and create turmoil abroad to buy time to stabilize precarious positions. It’s about provoking.
However, Mr. Xi’s approach carries significant risks. His will to endure hardship may strengthen his grip on power today, but it threatens to fray his aspirations for China’s national rejuvenation tomorrow.
Despite President Xi’s carefully constructed image of competence, China’s domestic dilemmas remain acute. A shrinking population, weak currency and declining foreign investment are exposing cracks in Mr. Xi’s economic management. They also undermine the Communist Party’s deal with the Chinese people to gain prosperity in exchange for compliance. China’s crisis of confidence risks turning the country into a vicious cycle in which slowing growth stifles investment, reduces spending, deepens deflation, and increases unemployment, all of which further reduce growth. President Xi has relied on modest supply-side stimulus, leading to temporary highs with modest increases in spending and short-term credit expansion. But mounting debt, bad bets on real estate and a decade-long stock market have left Mr. Xi with few tools to reignite growth.
To make matters worse, Mr. Xi’s campaign to root out perceived weaknesses within the party, military, and private sector has compounded his challenges. The purge of senior officials, including PLA Navy Admiral Miao Hua and former Defense Minister Li Shangfu, who are accused of “serious violations of discipline” and are the chief enforcers of Xi’s ideological conformity, highlights corruption within the ranks. I’m doing it. More than 80 business executives have reportedly been detained in 2024 alone, stifling innovation and raising concerns about arbitrary state intervention. While such actions could strengthen loyalty and tighten control, they also deepen mistrust and undermine Mr. Xi’s ability to weather mounting pressure.
These growing predicaments only strengthen Mr. Xi’s resolve. He routinely brings up the “encirclement” and “containment” of the West, blaming the United States for stopping China’s rise. But he has used this story to justify growing repression in the country, including the construction of more than 200 party-run extrajudicial detention facilities to enforce discipline and root out dissent. are. In Mr. Xi’s view, China’s domestic woes are ultimately due to weak ideological discipline and insufficient loyalty to Mr. Xi’s vision. In other words, in Mr. Xi’s mind, China is not collapsing. That is disobedience. His solution? More powerful doses of the same medicine: tightening Party control, tightening repression, and a constant drive to cement his legacy as the architect of China’s historical destiny.
Amid domestic challenges, Mr. Xi is turning to turmoil abroad to reshape the international order in China’s favor. By providing diplomatic cover and economic support for Russia’s war in Ukraine and tacit support for Middle East disruptors such as Iran, Mr. is encouraging. For Mr. Xi, disruption is not just a tactic. It is a kind of strategic currency, one that strengthens his narrative about China’s resilience and strength while undermining Western cohesion. His calculations are harsh. If China’s advancement is wavering, the international structure that supports its rivals must also be shaken. From this perspective, chaos abroad is Mr. Xi’s lifeblood, a calculated ploy to obscure his inability to bring about progress at home and globally.
But 2025 will test Mr. Xi like never before. Increased scrutiny from Washington, including new semiconductor investigations, export restrictions on advanced technology and expanded tariffs, will collide with growing unrest at home, including worker strikes and online protests. At the same time, tensions will further rise due to the strengthening of transatlantic coordination on China and the rise of anti-authoritarian coalitions characterized by the new Japan-U.S.-South Korea trilateral framework. These combined forces will challenge Mr. Xi in ways he cannot control or predict, exposing the fragility of his focus and testing the limits of his carefully constructed narrative of inevitability. It will be.
Mr. Xi’s biggest X-factor will be President Trump, whose return will be unpredictable. Trump waited 15 months during his first term before imposing tariffs on Chinese goods. This time, tariffs are expected to be imposed immediately and strongly, targeting exports, the very lifeblood of China’s economic slump. These tariffs won’t just take effect sooner. The reductions would be even wider, with proposed tax rates reaching up to 60% in key sectors such as technology, consumer goods and industrial equipment. Unlike sanctions, which President Xi has sought to ease and which take years to fully materialize, tariffs take effect overnight, giving Beijing little time to react and leaving Chinese manufacturers to bear devastating losses. are forced to.
President Trump’s tariff threat poses great danger to Mr. Xi. China relies on its largest trading partner, the United States, to maintain millions of manufacturing jobs, but the rapid increase in tariffs will hit small businesses hard, causing factory closures and layoffs. There is a possibility. Vulnerable sectors such as electronics and textiles could face severe disruption, and even the electric vehicle industry, one of China’s few bright spots, is struggling with domestic saturation and new Western trade barriers. There is. Meanwhile, bipartisan support in Washington for a foreign investment review threatens to block vital U.S. capital flows and slow Beijing’s technological ambitions and broader economic goals.
Taken together, these measures could deal a devastating blow to China’s economy, whose growth rate is almost certainly below Beijing’s official goal of 5%. Apparently, the party’s threat to fire economists who warn of economic downturn or express “inappropriate” views is an authoritarian move to suppress inconvenient truths. This is typical. Mr. Xi has made expanding domestic consumption a top priority for 2025, but this is also in an unstable situation. If Mr. Xi doesn’t trust anything more than the market, it’s the Chinese public who has shown no appetite to spend money to get out of Mr. Xi’s economic quagmire. Investors share this skepticism. China’s 10-year bond yield has fallen to a record low, signaling doubts about the country’s trajectory.
Meanwhile, Mr. Xi’s reliance on global turmoil to maintain his position reveals a clear contradiction. The instability Mr. Xi is stirring up to distract the West could backfire once the crisis stabilizes. In 2025, the world’s attention will once again be on China once the major conflicts end, whether it’s through President Trump’s promised deal on Ukraine or Israel’s actions against Iran’s last proxy. may gather. For Mr. Xi, this is a nightmare scenario. The West’s fragmented focus serves to hide his vulnerabilities, but resolving these crises could empower the West to confront him head-on.
Mr. Xi has a tough choice. They can either hunker down and adopt a survival strategy, or go too far and risk further instability. Either path will test his long-term endurance. In the face of President Trump’s aggressive posture, Mr. Xi is unlikely to pursue overt economic warfare, at least initially, as he recognizes that escalation would hurt China more than its adversaries. Instead, Xi Jinping may adopt coordinated symbolic responses, such as the recently announced rare earth regulations, to project strength while leaving room for negotiation. Mr. Xi could also use retaliatory tariffs and regulatory crackdowns on U.S. companies operating in China to signal defiance without provoking a full-scale confrontation.
Domestically, Mr. Xi’s challenge is how to redefine success. If political stability and ideological discipline come to take precedence over economic growth, Mr. Xi will need to reframe challenges as positive evidence of China’s resilience and moral superiority over the West. Dew. If the country’s recovery takes decades longer than planned, Mr. Xi will likely see the delay as a necessary step to achieve the “China Dream.” It remains an open question whether the Chinese people will accept this new narrative or be fed up with a future forever postponed.
On the world stage, Mr. Xi’s reliance on instability poses its own dangers. Rather than stand still, Mr. Xi may raise tensions elsewhere, perhaps in the South China Sea, and test U.S. resolve through a showdown with the Philippines. However, strategies based on confusion, aimed at distracting the enemy and avoiding direct confrontation, lead to miscalculation. More specifically, Mr. Xi has criticized other dictatorships, from Russian President Vladimir Putin’s disastrous bid to invade Ukraine to Hamas’ ill-fated October 7, 2023 attack on Israel, which drew overwhelming retaliation. It risks exposing Beijing to vulnerabilities that have weakened the regime.
The irony of Xi’s leadership, of course, is that a seemingly transformative figure obsessed with progress is unable to embrace change. Under his rule, China became a destructive and constraining power, and any efforts to tighten control risked damaging Beijing’s global standing and undermining the credibility of its great power status. There is. But for someone whose legitimacy depends on conveying a nation’s prestige, for whom chaos and overcoming do not lead to leadership, simply surviving risks falling dangerously short of one’s noble ambitions. be. Ultimately, whether 2025 will be a turning point or just another bad, bad, bad year will depend on Xi Jinping’s ability to overcome his biggest challenge: himself.
