Predictions 2025: Will China's Tipping Point Finally Arrive?

In last year's prediction article, I used the following title: "Predictions 2024: In the Year of the Dragon Will China See a Slow Decay or Sudden Collapse?" I concluded, "While some believe China's 'crumbling without collapsing' state will persist for many years, others think that a 'brittle fracture' or an avalanche-like sudden collapse in such a massive system is always possible."

A year has passed, and looking back at China in 2024, although "crumbling without collapsing" remains the main theme, a "brittle fracture" did not occur. However, "soft fractures" have undoubtedly taken place, and these "soft fractures" could very likely lead to the dramatic collapse of the vast Communist machinery in 2025.

Political Surprises and Shifts in 2024

Reflecting on 2024, we witnessed unexpected changes in China's political landscape. These included an overall economic downturn, rapid deterioration of social order, and a tightening of the international situation.

Politically, the unexpected change was the rumor in July about Xi Jinping suffering a stroke, which was later debunked. However, subtle yet possibly significant changes might have already occurred in Chinese politics.

Initially, these changes were only evident in nuanced shifts in media reporting, but by the end of 2024, more blatant signs emerged one after another. These included the downfall of Miao Hua, a member of the Central Military Commission and Director of the Political Work Department, seen as a close ally of Xi.

The unusual circumstances surrounding his fall, along with articles in the PLA Daily and Ministry of Defense explicitly calling for adherence to democratic centralism, and a widespread open letter demanding Xi's resignation, all indicate that Xi's once unshakeable power has been significantly weakened and fragmented, especially his control over the military.

*President Xi Jinping inspects the Chinese military's intelligence support unit on December 4. (©Xinhua via Kyodo)*

Potential Political Shifts and Outcomes

Based on this, the outcome of the "life or death" internal strife currently concealed by the CCP might surface in 2025. If Xi Jinping indeed steps down as the rumors suggest, the future direction of Chinese society will depend on the thoughts and actions of whoever or whatever faction replaces him.

If such changes do not occur, and Xi Jinping continues to govern while following the current path, there can only be two outcomes. Either he successfully transforms China into a larger version of North Korea, maintaining CCP rule through extreme suppression, or those within the CCP or the general populace, become unable to bear it any longer. They successfully rebel, overthrowing Xi's dynasty, and possibly even ending CCP rule.

Economic Collapse and Deterioration

Economically, various indicators throughout 2024 have led nearly everyone to lose faith in recovery. China's economy has completely lost its growth points and momentum. Citizens are reluctant to consume, the government survives on debt, fines, and even seizing private enterprises' assets. Bad news was constantly emerging, especially the trillion-scale local and central government debt.

This has forced the central bank to start an "unbacked money printing" mode since August. Economists calculate that, given the scale of China's debt, this mode can only be sustained until late 2026 or early 2027 before a complete collapse. At that point, the credibility of the RMB might disintegrate, turning it into worthless paper.

Unless there is a dramatic political change, China's economy in 2025 will certainly accelerate its decline with no possibility of improvement.

Breaking Point: Rising Acts of Social Retaliation

In 2024, one of the most noticeable changes in Chinese society was the increase in various acts of "revenge against society" due to economic downturn and loss of social justice. (See the incomplete yet lengthy list here). In some incidents, perpetrators drove into crowds, causing dozens of deaths in one go.

Apart from indiscriminate attacks on innocent civilians, retaliatory attacks against officials at all levels have also increased. Workers seeking unpaid wages no longer resort to kneeling or threatening collective suicides but instead choose to burn factories to vent their frustrations.

All this suggests that the Communist Party's governance capacity in China is rapidly deteriorating, and the public's tolerance for judicial injustice and economic hardship has reached a critical point.

*Chinese security authorities patrol near the site where a driver rammed his car into a crowd in Zhuhai City, Guangdong Province, China. Photo taken on November 12, 2024. (©Kyodo)*

A Turning Tide: How Shifting Global Dynamics and U.S. Policy Threaten the CCP

Another significant change is in international affairs. The CCP planned the so-called "ignition strategy" to create chaos globally and distract the United States. However, the Russia-Ukraine war and conflicts in the Middle East did not unfold as they had hoped.

It is anticipated that with Trump's inauguration, both the international situation and US-China relations will shift in a direction highly unfavorable to the CCP. The Russia-Ukraine war might end soon, and Trump could even improve relations with Russia, thus isolating China further.

Although Trump hasn't fully articulated his strategy or thoughts on China, the predominantly hawkish figures in his proposed cabinet suggest a hardline stance against China.

To fulfill his promise to "Make America Great Again" and usher in a golden age for the US, Trump must staunchly defend American interests and positions. Consequently, methods the Chinese Communist Party (CCP) previously used to develop will face strong. These include technology theft or forced technology transfers, state subsidies, and dumping to capture foreign markets for trade surpluses.

Goldman Sachs previously predicted that if Trump implements a 60% tariff on Chinese goods, this alone could reduce China's GDP by 2 percentage points. It would be a blow the Chinese economy, already potentially at negative growth, could hardly bear.

Approaching the Boiling Point for China's Entire System

As I stated in last year's prediction, China's "crumbling without collapsing" state has lasted for decades. Some say they wouldn't be surprised if it continues for several more decades. Yet, if it were to collapse tomorrow, they wouldn't find that unexpected either.

However, much like the metaphor of a frog being boiled slowly, no matter how gradually the water temperature rises, it must eventually boil when it reaches 100 degrees. Similarly, I believe that every aspect of the current system under the CCP has reached its limits and is nearing the point of being unsustainable.

Therefore, I wish to make a bold prediction: 2025 might be the year when the "tipping point" finally comes to China. The most likely event will be Xi Jinping stepping down. As for whether his departure will lead to the disintegration and total collapse of the CCP regime, I would say the likelihood of "yes" outweighs that of "no."

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