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The year 2024 has been disastrous for Chinese President Xi Jinping. For all his rhetoric about the “great rejuvenation of the Chinese nation,” his regime has faced staggering setbacks. Military purges aimed at rooting out corruption have, instead, exposed a systemic malaise that continues to undermine preparedness. The economic expansion collapsed as unemployment, bankruptcies and capital outflows soared. Meanwhile, its key partners, Moscow and Damascus, have stumbled or fallen, undermining Beijing’s geostrategic ambitions. Taken together, these and other crises have revealed a China that seems fragile, not formidable.
If 2024 shattered illusions of China’s unyielding ascent, 2025 promises to lay bare the vulnerabilities that Xi can no longer conceal.
The year 2024 has been disastrous for Chinese President Xi Jinping. For all his rhetoric about the “great rejuvenation of the Chinese nation,” his regime has faced staggering setbacks. Military purges aimed at rooting out corruption have, instead, exposed a systemic malaise that continues to undermine preparedness. The economic expansion collapsed as unemployment, bankruptcies and capital outflows soared. Meanwhile, its key partners, Moscow and Damascus, have stumbled or fallen, undermining Beijing’s geostrategic ambitions. Taken together, these and other crises have revealed a China that seems fragile, not formidable.
If the year 2024 shatters the illusions of China’s unwavering rise, the year 2025 will expose the vulnerabilities that Xi can no longer hide.
However, with internal unrest developing and an soon-to-be ambitious US President Donald Trump in Washington, Xi is not betting on radical changes or ambitious reforms. Instead, it pursues a policy of perseverance: muddle through economic stagnation, avoid open confrontation with Washington, redouble ideological discipline, and foment chaos to distract its adversaries and buy time to stabilize its precarious position.
However, Xi’s technique carries significant risks. Although his willingness to go through hardship would possibly prevent him from controlling the force today, it threatens to undermine his aspirations for a national revival of China tomorrow.
Contrary to Xi’s carefully constructed image of competence, China’s domestic dilemmas remain profound. A shrinking population, a weakening currency, and dwindling foreign investment have exposed cracks in Xi’s economic stewardship. They also undermine the Communist Party’s bargain with the Chinese people: prosperity in exchange for compliance. China’s crisis of confidence risks spiraling into a vicious cycle as weak growth deters investment, shrinks spending, deepens deflation, and raises unemployment—all of which drag growth even lower. Xi’s reliance on meager supply-side stimulus has delivered fleeting sugar highs, with modest spending upticks and short-lived credit expansions. But ballooning debt, bad real estate bets, and a stock market that has been flat for a decade leave Xi with few levers to reignite growth.
Worse still, Xi’s crusade toward perceived weaknesses within the party, military and personal sector has deepened his dilemma. The purges of senior officials such as People’s Liberation Army Navy Admiral Miao Hua, a prominent supporter of Xi’s ideological conformity accused of “serious violations on the ground,” as well as former Defense Minister Li Shangfu highlight highlighted the rot in the ranks. The alleged arrest of more than 80 business executives in 2024 alone has stifled innovation and fueled fears of arbitrary state intervention. While such moves can cement loyalty and impose control, they also deepen distrust and erode the competence Xi wants to confront developing pressures.
These widening woes have only steeled Xi’s resolve. He routinely invokes Western “encirclement” and “containment,” blaming the United States for thwarting China’s rise. But he uses this narrative to justify ever-expanding repression at home, including constructing more than 200 party-run, extrajudicial detention facilities to enforce discipline and root out dissent. In Xi’s view, China’s domestic struggles ultimately stem from weak ideological discipline and insufficient loyalty to his vision. Put differently, in Xi’s mind, China isn’t broken; it’s disobedient. His solution? A stronger dose of the same medicine: tighter party control, intensified repression, and an unrelenting drive to cement his legacy as the architect of China’s historical destiny.
Amid internal challenges, Xi is turning to chaos abroad to reshape the international order in China’s favor. By offering diplomatic cover and economic support for Russia’s war in Ukraine and tacit backing for Middle Eastern disruptors such as Iran, Xi is fueling crises that distract, divide, and drain Western resources. For Xi, chaos is not merely a tactic; it’s a form of strategic currency, undermining Western cohesion while bolstering his narrative of Chinese resilience and strength. His calculation is stark: If China’s ascent is faltering, the international architecture sustaining its rivals must falter, too. Seen in this light, disorder abroad is Xi’s lifeline—a calculated gambit to obscure his inability to deliver progress at home or globally.
However, 2025 will test Xi like never before. Intensified scrutiny from Washington (which will add new research into semiconductors, complex generation exports and higher tariffs) will meet growing domestic unrest, adding to measures of hard work and online dissent. At the same time, the emergence of an anti-authoritarian alignment – marked through greater transatlantic coordination in relation to China and the new trilateral framework between the United States, Japan and South Korea – will accentuate tension. These converging forces will challenge Xi with tactics he cannot even predict, exposing the fragility of his centralized force and testing the limits of his carefully constructed narrative of inevitability.
Xi’s biggest X-factor will be Trump, whose return promises unpredictability. During his first term, Trump waited 15 months to impose price lists on Chinese products. This time, the price lists will be implemented without delay and intensively, targeting the soul of China’s faltering economy: exports. These rates will not only come faster; They will reduce their spending even further, with rates presented as high as 60% in critical sectors such as technology, customer goods and business equipment. Unlike sanctions, which Xi has worked to ease and which have taken years to fully materialize, price lists come into play. effect overnight, leaving Beijing with little time to respond and forcing Chinese brands to absorb crushing losses.
Trump’s tariff threats translate into tremendous peril for Xi. China’s reliance on the United States—its largest trading partner—sustains millions of manufacturing jobs, but a rapid tariff escalation could devastate small and medium enterprises, triggering factory closures and layoffs. 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 grappling with domestic oversaturation and budding Western trade barriers. Meanwhile, bipartisan support in Washington for outbound investment screening threatens to choke off critical U.S. capital flows, stalling Beijing’s technological ambitions and broader economic goals.
Ultimately, such measures could deal a fatal blow to the Chinese economy, whose expansion is almost below Beijing’s official target of 5%. Tellingly, the party threatened to fire economists if they warned of an economic free fall or expressed “inappropriate” perspectives: a characteristically authoritarian move to suppress inconvenient truths. Xi has made increasing domestic consumption his most sensible priority for 2025, but this too is on shaky ground. If Xi trusts the markets even less, it is the Chinese masses, who have shown no desire to get out of their economic quagmire with money. Investors share this skepticism: China’s 10-year bond yield has plummeted to record lows, signaling doubts about the country’s trajectory.
Meanwhile, Xi’s reliance on global chaos to sustain his position reveals a glaring paradox: The instability he is fueling in order to distract the West could backfire if and when those crises stabilize. In 2025, the winding down of major conflicts—whether through Trump’s promised dealmaking over Ukraine or Israeli action against Iran’s last remaining proxies—could put the global spotlight back on China. For Xi, this is a nightmare scenario. The West’s fragmented focus has helped mask his vulnerabilities, but resolving these crises could empower the West to confront him head-on.
Xi’s choice is stark: retreat with a survival strategy or threaten further instability by going too far. Both paths will test long-term staying power. Given Trump’s competitive posture, Xi is unlikely to launch an open economic war, at least initially, as he recognizes that an escalation would harm China more than its adversaries. Instead, Xi could simply adopt symbolic and calibrated responses – such as the recently announced restrictions on rare lands – to allocate strength while preserving room for negotiation. Xi can also take advantage of retaliatory price lists or regulatory crackdowns against American corporations operating in China to sign off on a challenge without provoking a full-scale confrontation.
At the national level, Xi’s task is how to redefine success. If political stability and the ideological field now take priority over economic growth, Xi will have to view the difficulties as positive evidence of China’s resilience and ethical superiority over the West. Now taking decades longer than expected, Xi will most likely provide those delays as mandatory steps to realizing the “Chinese dream. ” It remains an open question whether the other Chinese will accept this new narrative or whether they will grow tired of a delayed schedule. future.
On the global stage, Xi’s dependence on instability carries its own dangers. Instead of staying afloat, Xi could simply escalate tensions elsewhere, perhaps in the South China Sea, testing the United States with a confrontation with the Philippines. However, while a chaos-focused strategy aims to distract adversaries and avoid direct confrontation, it invites miscalculations. Specifically, Xi risks exposing Beijing to vulnerabilities that have weakened other authoritarian regimes, from Russian President Vladimir Putin’s disastrous gamble to invade Ukraine to Hamas’s ill-fated attack on Israel on Oct. 7, 2023, a series that sparked major retaliation.
Of course, the irony of Xi’s leadership is that a likely transformative figure, obsessed with progress, cannot accept change. Under his rule, China has become a disruptive and constrained power, where any effort to shore it up threatens to tarnish Beijing’s global status and undermine the credibility of its rise as a wonder power. But getting ahead is not leading, and for someone whose legitimacy is based on national prestige, the mere dangers of survival fall dangerously short of his own noble ambitions. Ultimately, whether 2025 becomes a turning point or just another terrible, horrible, no-good year will depend on whether Xi can triumph over the biggest challenge of all: himself.
Craig Singleton is a senior China researcher at the Foundation for Defense of Democracies and a former US diplomat. X: @CraigMSingleton
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