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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 had to deal with staggering setbacks. Rather, military purges designed to root out corruption have revealed systemic malaise. that continues to undermine preparedness. Economic expansion collapsed as unemployment, bankruptcies and capital outflows soared. Meanwhile, Moscow and Damascus’ key partners have stumbled or fallen, undermining Beijing’s geostrategic ambitions. Taken together, these and other crises have revealed a China that appears fragile rather than formidable.
If 2024 shatters illusions of China’s unwavering rise, 2025 will lay bare vulnerabilities that Xi can no longer hide.
Faced with growing internal unrest and a soon-to-be ambitious US president, Donald Trump, in Washington, Xi is not betting, however, 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 the symbol of competition constructed by Xi, China’s internal dilemmas remain profound. Declining populations, weakening currencies 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 of which weigh even more. strongly expanding. Xi’s reliance on scarce supply-side stimulus has led to short-lived spikes for sugar, with modest spending increases and short-lived credit expansions. But mounting debt, bad real estate bets and a decade-long inventory market leave Xi with little leverage to revive expansion.
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 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.
In the face of domestic challenges, Xi is turning to chaos overseas to reshape the foreign order in China’s favor. By providing diplomatic canopy and economic for Russia’s war in Ukraine and tacit for disruptive Middle Eastern countries like Iran, Xi is fueling crises that divert, divide, and drain Western resources. For Xi, chaos is not just a tactic; it is a shape of strategic currency, which undermines Western team spirit whilst reinforcing its narrative about China’s resilience and strength. His calculation is bleak: if China’s rise runs out of steam, the foreign architecture that s its rivals will have to also collapse. Seen in this light, disorder overseas is Xi’s lifeline – a strategy calculated to mask his inability to make progress at house or globally.
However, 2025 will test Xi like never before. Washington’s intensified scrutiny — which will add new research on semiconductors, complex generation exports, and higher tariffs — will face growing domestic unrest, adding 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 conscientiously 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 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 for his position shows a glaring paradox: the instability he is fueling to distract the West may backfire if those crises stabilize. In 2025, the end of primary conflicts – whether through Trump’s promised Ukraine deal or Israeli action against Iran’s remaining proxies – could once again focus attention 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 reliance on instability poses its own perils. Rather than treading water, Xi may escalate tensions elsewhere—perhaps in the South China Sea, testing U.S. resolve through confrontation with the Philippines. Yet as much as a chaos-driven strategy intends to distract adversaries and sidestep direct confrontation, it invites miscalculation. More specifically, Xi risks exposing Beijing to the vulnerabilities that have undermined other authoritarian regimes—from Russian President Vladimir Putin’s disastrous gamble of invading Ukraine to Hamas’s ill-fated Oct. 7, 2023, attack on Israel that invited overwhelming retaliation.
Of course, the irony of Xi’s leadership is that a seemingly transformational figure obsessed with progress cannot embrace change. Under his rule, China has become a power both disruptive and constrained, where every effort to tighten control risks tarnishing Beijing’s global standing and undermining the credibility of its great-power ascent. But muddling through isn’t leading, and for someone whose legitimacy hinges on delivering national prestige, mere survival risks falling dangerously short of his own lofty ambitions. Ultimately, whether 2025 becomes a turning point or simply another terrible, horrible, no good year will depend on Xi’s ability to overcome 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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