Xi Jinping: world leader at the cost of internal turmoil

In 2026, the Chinese leader has achieved unprecedented international prominence, but economic difficulties and social tensions within the country are becoming increasingly apparent.

Xi Jinping's policies have transformed China into a key player on the global stage, while creating serious challenges for its 1,4 billion citizens. Pandemic recovery, demographic shifts, and geopolitical ambitions are shaping a new reality where external gains contrast with internal losses.

Domestic economy under pressure of ambition

China's GDP growth slowed to 4,1 percent in May 2026, the lowest in five years. Experts attribute this to the lingering impact of the tough zero-COVID policy, which only ended at the end of 2023. The real estate market has still not recovered: developer debts exceed $300 billion, and housing prices in megacities have fallen by 12 percent compared to 2024.

Young people are increasingly choosing to “lay low” — to give up on career pursuits due to lack of prospects. The unemployment rate among university graduates has reached 18,7 percent. The government has introduced new retraining programs, but they only reached 2,3 million people in the first four months of 2026.

Demographic crisis and social consequences

The number of births in 2025 was 8,9 million, the lowest since 1949. The government introduced additional payments for families with three children, but the birth rate increased by only 0,3 percent. The population is aging rapidly: by 2030, the proportion of people over 65 will exceed 20 percent.

Social sentiment reflects discontent. In Guangdong province, local protests by pensioners against delayed payments took place in the spring of 2026. Authorities have tightened control over social media, deleting more than 1,2 million posts critical of economic policies.

Beijing's foreign policy achievements

Xi Jinping has strengthened China’s position on the international stage. In April 2026, Beijing became the main mediator in negotiations between Saudi Arabia and Iran on energy supplies. The BRICS+ multilateral agreement expanded to include four more countries, and China secured the presidency of a new development bank with a capital of $150 billion.

The Belt and Road Initiative continues to gain momentum. In 2025, 47 new contracts worth a total of $320 billion were signed, mostly in Africa and Latin America. At the same time, European partners are expressing concern about the debt burden on recipient countries.

Relations with the United States and Taiwan

Tensions over Taiwan remain high. In March 2026, China held its largest military exercises in three years, involving 120 ships and 180 aircraft. The United States responded by increasing its arms sales to the island by $2,8 billion. At the same time, both sides maintain dialogue: in May, a meeting of defense ministers was held in Singapore.

Washington's trade restrictions on semiconductors remain in place. China has invested $45 billion in its own technology, and by 2026, the share of domestic chips in smartphones had grown to 38 percent.

Global impact and future challenges

Xi Jinping is actively promoting an alternative model of world order. At the G20 summit in June 2026, China proposed a new climate initiative with a budget of $50 billion for countries of the Global South. This increased Beijing's authority among the 87 states that supported the resolution.

However, domestic challenges may limit external ambitions. Analysts predict that without structural reforms, growth could fall below 3 percent as early as 2028. Xi Jinping’s leadership remains unchallenged, but the cost of that leadership to Chinese society continues to rise.

Sources

1. Bloomberg, "China's GDP Growth Slows to 4.1% in Q1 2026", May 2026.
2. Reuters, "Xi Jinping's Global Mediation Role Expands in 2026", April 2026.
3. South China Morning Post, “Demographic Data Reveals Record Low Births,” May 2026.
4. Financial Times, "Belt and Road Contracts Reach $320bn in 2025", March 2026.