President Donald Trump will meet with Chinese President Xi Jinping in South Korea later this month, just days after the Chinese Communist Party (CCP) concludes closed-door meetings to discuss the country’s next five-year plan. While Xi is desperately trying to project strength, his recent aggressive moves reveal a regime that is fraying at the seams. Xi is running out of economic cards to play, and he knows it.
Earlier this month, Beijing announced new restrictions on the export of rare earth minerals, adding five more elements to the control list introduced in April. While the new rules apply to all countries, they are aimed squarely at the United States as Beijing looks to strangle U.S. manufacturing capability and undercut the Trump administration’s efforts to boost domestic industrial capacity.
U.S. Trade Representative Jamieson Greer called China’s move “an exercise in economic coercion on every country in the world” designed to “give China control over basically the entire global economy and the technology supply chain.” Greer also revealed that Beijing did not notify his office about its decision and “deferred” his phone call.
Trump had warned earlier this year that further export restrictions could result in retaliatory tariffs of 100 percent or more. True to his word, Trump announced a 100 percent tariff on Chinese goods following Beijing’s unveiling of the new rare earths rules.
These heightened tensions have set the stage for the meeting in South Korea, where both Trump and Xi will jockey for the advantage in ongoing trade talks. It has become an international game of chicken with major implications for the global economy. Whoever blinks first will cede leverage that may be difficult to regain.
But experts I spoke with told me that there are clear signs that Xi is bluffing – while he postures by restricting exports, fundamental measures of economic strength point to a burgeoning crisis. While the United States is facing its own economic problems, the overall U.S. economy has remained resilient in the face of Chinese pressure.
“Arrogant, aggressive, and despicable,” is how lawyer and economist Jung De Ning described Xi’s approach. Jung advised Chinese leader Hu Yaobang, who hoped to become a reformer but died unexpectedly, before defecting to the West prior to the Tiananmen Square massacre. “They are dead wrong, thinking they have all the cards,” Jung said.
Indeed, new waves of quakes appear to be shaking the Chinese economy even as Xi projects strength. The country’s GDP growth in the third quarter of 2025 is projected to be its slowest in a year, with retail sales and industrial output slipping. In August, youth unemployment rose to 18.9 percent from 17.8 percent in July. The real estate market has continued to lag, with housing prices dipping 11 percent since 2021 and new sales expected to drop eight percent from last year.
Nonetheless, most media have uncritically reported the situation from the Chinese Communist Party’s (CCP) perspective, repeating the line that the United States is enforcing a “double standard” by retaliating against Chinese export controls. “The CCP has once again won a battle in its propaganda war, as most media sided with them, portraying the U.S. President as angry and unpredictable, exactly like the Party wanted,” Jung said.
The CCP defectors interviewed for this column assessed that the economic crisis has torn off Xi’s authority within the upper levels of the power pyramid, specifically the CCP Central Committee
In another sign of this mounting distress, the Party’s highest prosecuting authorities announced in September that Yi Huiman, former chairman of the China Securities Regulatory Commission, and Liu Yanchao, head of the Chinese Communist Party’s International Department, which serves as China’s de facto Ministry of Foreign Affairs, were being detained and investigated. Liu and Yi were members of the CCP Central Committee. Both officials were rumored to have criticized Xi’s dismal economic record and his involvement in the war in Ukraine.
Xi has also fired nine of his top generals, including the second highest ranking officer, in a shocking crackdown on the military. The purged leaders are accused of “seriously violating party discipline” and a “total collapse of beliefs” – indicating that they questioned Xi’s leadership.
“Nothing like this has happened since Mao. Xi is insecure and is instilling fear and terror within the Party,” said Yeliu Fu, a former high-ranking official at the Central Commission for Discipline Inspection. “Deng and his successors only allowed former members, his rivals, to be investigated, not the current ones,” Yeliu stated.
A former CCP investigator, who became Christian, told me that he believes that Xi is emulating “the wickedest practices” of the Soviet Union, known as Stalinism. “Stalin scared the party into obedience and bulldozed a culture with atheism, and Xi does the same.” But, he added, “like Stalin, Xi can’t prevent China’s fall into the abyss. He can only deny it is happening.”
Stalin notably waged war on religion within the Soviet Union, encouraging Soviet children to “fight superstitions” and “embrace scientific literacy.” It is precisely in this spirit that children in China are now being brainwashed to demonize Christianity as “an evil cult,” which Xi views as a threat to his dictatorship. Earlier this month, Wang Huning, a member of the CCP Standing Committee, stated that every religion in China must be “sinicized,” meaning that all church doctrines must align with “core socialist values,” including the supremacy of the CCP.
All of these developments point to a regime and a leader in Xi Jinping who is deeply insecure and feels that he is losing his grip on power. The trade clash with Trump is just one more attempt to portray Xi as a warrior ahead of fourth plenary session happening this week.
Xi is in trouble, and so the world should expect more performative shows of force to appease the CCP nomenklatura.
Ben Solis is the pen name of an international affairs journalist, historian, and researcher.
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