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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 had to deal with staggering setbacks. Rather, military purges designed to root out corruption have revealed systemic malaise. That continues to undermine preparedness. The economic expansion collapsed as unemployment, bankruptcies and capital outflows soared. Meanwhile, Moscow and Damascus’ main partners have stumbled or fallen, undermining Beijing’s geostrategic ambitions. Taken together, these and other crises have revealed a China that seems fragile and not formidable.
If 2024 shatters illusions of China’s unwavering rise, 2025 will lay bare vulnerabilities that Xi can no longer hide.
2024 was disastrous for Chinese President Xi Jinping. For all of his rhetoric about “the great rejuvenation of the Chinese nation,” his regime faced staggering setbacks. Military purges intended to root out corruption instead revealed systemic turmoil that continues to undermine readiness. Economic growth cratered as unemployment, bankruptcies, and capital outflows soared. Meanwhile, key partners in Moscow and Damascus stumbled or fell, undermining Beijing’s geostrategic ambitions. Together, these and other crises have revealed a China that looks increasingly fragile, not formidable.
If 2024 shatters the illusions of China’s unwavering rise, 2025 will expose 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.
Still, Xi’s technique carries significant risks. While his willingness to endure hardship would likely prevent him from controlling the force today, it threatens to undermine his aspirations for China’s national rebirth tomorrow.
Contrary to the symbol of competition constructed by Xi, China’s internal dilemmas remain profound. The declining population, weakening currency and declining foreign investment have exposed cracks in Xi’s economic management. They are also undermining the agreement that the Communist Party has made with the Chinese people. : prosperity in exchange for following the rules. China’s crisis of confidence risks becoming a vicious cycle as weak expansion discourages investment, cuts spending, deepens deflation and increases unemployment, all weighing further. strongly expanding. Xi’s reliance on little supply-side stimulus has led to short-lived spikes for sugar, with modest spending increases and short-lived credit expansions. But rising debt, bad real estate bets and a stagnant inventory market for a decade leave Xi with little leverage to revive expansion.
Worse, Xi’s crusade toward perceived weaknesses within the party, the military, and the personal sector has compounded his dilemma. The purges of senior officials such as People’s Liberation Army Navy Admiral Miao Hua, a prominent advocate of Xi’s ideological conformism, accused of “serious violations”. of discipline”, as well as former Defense Minister Li Shangfu underline the rottenness in the ranks. The reported arrest of more than 80 company executives in 2024 alone has stifled innovation and fueled fears of arbitrary state intervention. While such moves can consolidate loyalty and impose control, they also deepen mistrust and erode the competition Xi wants to cope with mounting pressures.
These developing problems have only strengthened Xi’s resolve. He invokes Western “encirclement” and “containment,” accusing the United States of thwarting China’s rise. But he uses this narrative to justify the escalating repression in his country, adding the construction of more than 200 party-run extrajudicial detention centers to enforce the law and crack down on dissent. According to Xi, China’s infighting ultimately stems from a weak ideological camp and inadequate loyalty to his vision. In other words, in Xi’s view, China is not broken; He is disobedient. Their solution? A more potent dose of the same remedy: tighter party control, intensified repression, and a relentless drive to cement his legacy as the architect of China’s historic destiny.
Facing challenges at home, Xi is turning to chaos abroad to reshape the foreign order in China’s favor. By providing diplomatic and economic cover for Russia’s war in Ukraine and tacit cover for disruptive Middle East countries like Iran, Xi is fueling crises that divert, divide and deplete Western resources. For Xi, chaos is not just a tactic; It is a form of strategic currency, undermining Western esprit de corps while reinforcing its narrative about China’s resilience and strength. Their calculation is grim: if China’s rise falters, the foreign architecture that constitutes its rivals will also have to collapse. Viewed from this perspective, disorder abroad is Xi’s lifeline: a calculated strategy to mask his inability to make progress domestically 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 promptly and intensively, targeting the lifeblood of China’s faltering economy: exports. These rates will not only arrive faster; They will cut spending further, with proposed rates of up to 60% in critical sectors such as technology, customer goods and business equipment. Unlike sanctions, which Xi has worked to ease and which took years to fully implement, the price lists take effect overnight, leaving Beijing little time to respond and forcing brands Chinese to absorb crushing losses.
Trump’s tariff threats translate into enormous danger for Xi. China’s dependence on the United States – its largest trading partner – supports millions of manufacturing jobs, but an immediate escalation of price lists could devastate small and medium-sized businesses, leading to factory closures and layoffs. Vulnerable sectors such as electronics and textiles could face serious disruptions, and even the electric vehicle industry – one of China’s few bright spots – is grappling with domestic oversaturation and industrial barriers emerging in Western societies. Meanwhile, bipartisanship in Washington to control foreign investment threatens to stifle vital American capital flows, constraining Beijing’s broader technological ambitions and 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, the fact that Xi is relying on global chaos for his position shows a glaring paradox: the instability he fuels to distract the West may backfire if those crises stabilize. By 2025, the end of major conflicts – whether through Trump’s promised deal with Ukraine or Israeli action against Iran’s remaining proxies – could put the spotlight back on China. For Xi, this is a nightmare scenario. The West’s fragmented orientation has helped mask its vulnerabilities, but resolving those crises can allow the West to confront them head-on.
Xi’s choice is stark: hunker down by embracing a survival strategy or risk further instability by overreaching. Both paths will test his capacity for long-term endurance. Confronted by Trump’s aggressive posturing, Xi is unlikely to pursue outright economic warfare, at least initially, because he recognizes that an escalation would hurt China more than its adversaries. Instead, Xi may adopt calibrated, symbolic responses—like the recently announced rare-earth restrictions—to project strength while preserving room for negotiations. Xi may also leverage retaliatory tariffs or regulatory crackdowns on U.S. firms operating in China to signal defiance without provoking a full-scale confrontation.
Domestically, Xi’s task is how to redefine success. If political stability and ideological discipline now take primacy over economic growth, Xi will have to reframe hardship as proof positive of China’s resilience and moral superiority over the West. If national rejuvenation now takes decades longer than planned, Xi will likely cast the delays as necessary steps in achieving the “Chinese Dream.” Whether the Chinese people will embrace this new narrative—or tire of a perpetually deferred future—remains an open question.
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 restrained power, where any effort to bolster it threatens to tarnish Beijing’s global status and undermine the credibility of its rise as a marvelous power. But getting ahead is not leading, and for someone whose legitimacy rests on national prestige, the mere dangers of survival fall dangerously short of his own lofty ambitions. Ultimately, whether 2025 becomes a turning point or just another terrible, horrible, and not good year will depend on whether Xi can triumph over the greatest 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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