Xi Jinping ascended to power in 2012. He sees and wants to see a stronger, more dynamic China that stands up firmly and assertively to direct global free trade. That’s why it was a smart move to make Southeast Asia his first international trip after this week’s tariff rollout. This decision shows the power and need for constructing effective regional coalitions. For this reason, too, Xi wants to be seen as a champion of free trade. He is up against major barriers that can derail this big dream.
Chinese manufacturers have developed a competitive advantage over the course of decades. For one, Xi clearly believes that Beijing will be able to endure economic troubles longer than Washington. His confidence is rooted in his conviction that this profound economic crisis might just be the catalyst for some real, needed change. He views this as a way to open up greater, new markets to China. As he stated in 2012, “Only when the country does well and the nation does well can every person do well.” This expansive philosophy forms the basis of the president’s economic planning as he sails through choppy seas.
The current export caps on sensitive high-tech lures to China undercut Xi’s dreams for a leap in technological superiority. He hopes to compete with U.S. tech supremacy through projects such as the chatbot DeepSeek and the electric vehicle maker BYD. And yet, partly in defiance of these challenges, more than 145 countries now export more to China than to the United States. This move underlines Xi’s achievement in making China truly indispensable to the global economy.
In an effort to invigorate a slowing economy, Xi’s government has announced substantial childcare subsidies, increased wages, and enhanced paid leave policies. These steps are intended to boost domestic demand at a time of increasing economic headwinds. Experts remain skeptical about immediate results. Prof. Nie Huihua remarked, “Given the downward pressure on the economy, it is unlikely domestic spending can be significantly expanded in the short term.”
The demographic challenges that Xi’s leadership have laid on China run much deeper. Experts believe nearly 300 million workers between 50–60 will exit the workforce over the next 10 years. The change will be monumental across multiple industries and economic sectors. National
producing to a limited national market. Under Xi’s government, officials stopped releasing youth unemployment numbers starting in August 2023. This lack of transparency has led to speculation that the labor market has fared poorly for younger generations.
Five years ago, Xi’s government implemented measures to limit how much developers could borrow, addressing concerns about an overheated property market. This key decision has had disastrous effects. In fact, reports estimate that China’s entire population would still not be enough to occupy all the vacant units around the country. This oversupply is the biggest hurdle to Xi accomplishing his goals. He needs to ease the downward pressures on the real estate sector even as he is expected to spur economic growth.
Xi is perhaps the most engaged, activist steward of these thorny matters. He understands that the real battlefield is China’s domestic policy changes rather than purely bilateral negotiations. Prof. Zhao Minghao noted, “China does not have high expectations for talks with the Trump administration… The real battleground is in the adjustment of China’s domestic policies, such as boosting domestic demand.”