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China’s Year in Review

Will 2024 be the calm before the storm for Beijing?

Palmer-James-foreign-policy-columnist20
Palmer-James-foreign-policy-columnist20
James Palmer
By , a deputy editor at Foreign Policy.
Commuters walk by office towers under construction during rush hour in Beijing on Oct. 18.
Commuters walk by office towers under construction during rush hour in Beijing on Oct. 18.
Commuters walk by office towers under construction during rush hour in Beijing on Oct. 18. Kevin Frayer/Getty Images

 Welcome to Foreign Policy’s China Brief—the last edition of 2024.

It was a long year in China, with the economic slowdown dominating the news and a gloomy public mood settling in. The country is still in a post-COVID-19 hangover and a political morass. Will 2024 be the calm before the storm for China?

 Welcome to Foreign Policy’s China Brief—the last edition of 2024.

It was a long year in China, with the economic slowdown dominating the news and a gloomy public mood settling in. The country is still in a post-COVID-19 hangover and a political morass. Will 2024 be the calm before the storm for China?

Despite making it clear years ago that he had no intention of giving up power, Chinese President Xi Jinping does not seem to have new ideas, returning to old worries about Western infiltration, corruption, and austerity. His answer to every problem is the same: more power centralized in the Chinese Communist Party (CCP).

Xi’s determination to stay in office has destroyed the career of any possible successor; it seems likely that the only way the leader will leave Zhongnanhai is feet first. Before Xi, government innovation and reforms were tested at the grassroots level. Today, tense and overworked officials only try to work toward what they think the top leadership wants.

But external forces could disrupt this stagnation. U.S. President-elect Donald Trump’s return to power and the prospect of growing clashes with Washington, whether over tariffs or Taiwan, could mean hard times for Beijing. But this shift could also give China’s leaders a sense of battling a shared enemy and allow space for change.

Below are four trends that Foreign Policy watched in 2024.


An Economy in the Doldrums

It looks like China’s official GDP growth figure will come in at around 4.8 percent for the year, undershooting an already modest 5 percent target. In a country that became accustomed to 8-9 percent annual growth in the boom years, the mood remains grim. China’s stock market saw a sudden boom, but it is a minor cog in the country’s economic machine. 

It has been two years since China ended its draconian zero-COVID policies, after surveillance and repression failed to contain either outbreaks or public anger. But a post-pandemic recovery has not followed as hoped. Instead, China’s economy seems stuck in a long and painful slowdown underpinned by a long-running real estate collapse.

For the economy, 2023 was bad, 2024 was bad, and 2025 could be worse. Chinese businesses and households were more over-invested in real estate than Americans were before the 2008 global financial crisis, but the strong role of the government—which has not allowed property prices to fully fall—has caused the crisis to become more of a prolonged illness than a sharp shock.

Xi’s unwillingness to embrace economic stimulus policies on the scale of China’s response to the 2008 financial crisis may make matters worse. Until Beijing tackles the housing issue head-on, the economic news is likely to remain grim.


Electric Vehicles and Price Wars 

In 2024, the rest of the world seemed to discover China’s remarkable surge in electric vehicles, or EVs, with Chinese-made cars easily outclassing Western products in terms of quality for price. That is unmistakably a good thing for the world, since China is now the world’s top carbon emitter.

The United States and the European Union have responded by trying to defend their own nascent EV markets from superior Chinese products. This strategy might fail. But one underrated factor is that the extremely cheap costs of new EVs in China are partly the product of a cutthroat and unsustainable price war.

Continuous discounts have cut profit margins to the razor’s edge, and some cars may be sold at an effective loss. The pressure is so intense that BYD, China’s largest EV manufacturer, is trying to pressure its suppliers to cut costs by 10 percent next year; other manufactures are reporting huge losses.

Chinese firms are going bankrupt left, right, and center, leaving their customers stranded. But the EV struggle may eventually produce clear winners selling better products. Unfortunately, a deflationary spiral—with prices at the factory gate dropping for 26 months straight—and overcapacity problems have locked businesses into a bitter fight for a declining market.


Military Purges

Members of a Chinese People’s Liberation Army honor guard march in Tiananmen Square after the closing session of the Chinese People’s Political Consultative Conference in Beijing on March 10.
Members of a Chinese People’s Liberation Army honor guard march in Tiananmen Square after the closing session of the Chinese People’s Political Consultative Conference in Beijing on March 10.

Members of a Chinese People’s Liberation Army honor guard march in Tiananmen Square after the closing session of the Chinese People’s Political Consultative Conference in Beijing on March 10.Kevin Frayer/Getty Images

China has walked a fine line on Russia’s war in Ukraine, aiding its de facto ally in Moscow while trying to avoid red lines on sanctions, especially for financial institutions. But perhaps the most telling effect has been domestic.

The CCP leadership has long worried that corruption in the Chinese People’s Liberation Army (PLA) could cost it in future wars. But seeing Russia’s experience in Ukraine, where military corruption hampered its war efforts, has prompted a surge of investigations and purges in China that continued in 2024.

That is undermining the PLA; constant personnel changes are not good for morale or efficiency. The idea is that a cleaner PLA will emerge on the other end, but the people promoted after each round of anti-corruption efforts seem to end up as bad as those they replace. Many of the officials who have fallen recently, such as Miao Hua, China’s most senior political commissar, were once Xi’s proteges.

An understated factor in the corruption purges may be the ongoing civil war in Myanmar. China has played all sides in the war, but the ground-level ties between PLA officers and rebel groups in Myanmar often turn around control of organized crime.


Wolf Warriors on a Leash

Internationally, China has been relatively meek on the global stage this year. To be sure, there were still regular clashes Philippine navy and coast guard over disputed islands in the South China Sea, pushing Manila closer to Washington. The election of a new Taiwanese president, who is seen as pro-independence, prompted a wave of Chinese military exercises.

But a tentative agreement with India led to the resumption of high-level talks in mid-December, while a slow diplomatic reconciliation with U.S. President Joe Biden’s administration managed to keep military-to-military talks active after relations hit a nadir.

The drumbeat of anti-American state media coverage and rhetoric in 2022-2023 has slowed considerably, and the so-called wolf warrior diplomats, who were once known for ultranationalist and provocative stances, seem to have been muzzled.

The CCP leadership seems preoccupied with domestic problems and thus unwilling to take on more trouble abroad. That doesn’t mean an end to long-term projects, such as expansion in the Himalayas or island-building in the South China Sea—but it does mean a more circumspect tone.

James Palmer is a deputy editor at Foreign Policy. X: @BeijingPalmer

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