Hello, viewers, welcome to “Qin Bei Observation.”
Today’s focus: It’s the end of the year again, and I am pleased to see that my recent reviews of the top 10 events of 2024 and predictions for “Qianjing” in 2025 have been well-received by many friends. Today, we will continue to discuss the situation in China and predict the direction of China’s politics, economy, and society: Will Xi Jinping step down? Will the Renminbi fall below 8?…
I have divided it into two parts, focusing on the major events of 2024 in the first part, as only by understanding the past can we know the way forward. In the second part, I will provide a detailed forecast on various aspects of the Chinese economy.
In recent years, I have been making predictions. Many of these predictions have been proven right: For example, in 2022, I predicted the emergence of the Omicron variant of the novel coronavirus, which would defeat the CCP’s “zero-COVID” policy in the South China Sea and shatter the image of the CCP leader as unbeatable; last year, I predicted that under the impact of 4 gray rhinos and 3 black swans, the Chinese economy would run into major troubles. As a result, several other economies would prosper while the CCP’s infighting intensified, potentially leading to unexpected events that would shake politics and the economy. Looking at the results, these events have indeed occurred.
Looking back on 2024, I believe the top ten most important news events in China are:
The most dramatic event in China in 2024 was the major turnaround in CCP political power struggle, leading to a severe deprivation of power from Xi Jinping.
In the first half of the year, Xi Jinping, the all-powerful Party leader, continued to purge high officials appointed by himself, with many vice-ministerial level officials and a large number of generals disappearing collectively. Foreign Minister and State Councilor Qin Gang was dismissed at the beginning of the year and his whereabouts are still unknown. Fu Xiaotian and his children also vanished without a trace. Two vice-ministerial level Ministers of National Defense and State Councilors, as well as former Central Military Commission members Li Shangfu and Wei Fenghe, were subsequently announced to have fallen from grace. The spearhead of the anti-corruption campaign temporarily pointed towards Vice Chairman of the Military Commission Zhang Youxia. The haphazard investigation into the corruption within the General Equipment Department up to 2017 made Zhang Youxia both shocked and fearful. Li Shangfu was charged with a “bribery crime,” sparking further speculation that Zhang Youxia might also be on the verge of downfall or quietly retreating.
However, the CCP’s Third Plenum in July played a big joke on Xi Jinping. The lengthy document “Reformist Xi Jinping” was deleted, and afterwards, the Party media rarely mentioned Xi Jinping, and the previously emphasized concept of “two maintenances” promoting centralized leadership almost disappeared. In August, US National Security Adviser Sullivan visited, and Zhang Youxia met with him alone with a smile. In October, Zhang Youxia visited Vietnam alone, was received by the General Secretary and Prime Minister of the Vietnamese Communist Party, and even enjoyed a military honor guard ceremony, receiving treatment on par with the CCP leader, clearly inconsistent with Zhang Youxia’s official status. In December, the military organ “People’s Liberation Army Daily” published a series of articles renouncing the “Chairman of the Military Commission responsibility system,” emphasizing “collective leadership” and “chief’s responsibility system,” proclaiming that although the secretary is the “leader of a group,” he must not act as if he is the head of a family, with a clear target in mind.
Strangely enough, during the CCP’s 75th anniversary celebration on “National Day,” the graying former Premier of the CCP, Wen Jiabao, appeared publicly with a triumphant expression. In December, a joint letter calling for Xi Jinping’s resignation surfaced overseas, listing 16 major charges against Xi Jinping. What happened during this period? The only reasonable explanation is that Xi Jinping was significantly stripped of power by Vice Chairman of the Military Commission Zhang Youxia in collaboration with senior CCP elders.
Looking back over the past two years, along with the baffling Third Plenum in July, my conclusion is that Xi Jinping, believing and fearing prophecies that were unfavorable to him, conducted massive purges within the Rocket Force, mysteriously caused the death of former Premier Li Keqiang, and even attempted to force Zhang Youxia, armed with a bow, into retirement, but ultimately could not escape the predictions in the “Tai Bei Tu.” The soldier with a bow has indeed appeared, embodying Zhang Youxia.
This morning, Fuyao asked me to summarize 2024 with a famous quote, and I thought of “helpless flowers fall,” in the face of rules and fate, resisting might be futile and even counterproductive.
The second major event in China in 2024 was the accelerated economic downturn, forcing the CCP to intervene in the market. The authorities were reluctant to do so. Previously, Xi Jinping criticized the idea of giving money to the people as pampering laziness, and at the beginning of the year, he questioned, “What’s wrong with deflation, doesn’t everyone like cheaper prices?” However, under the grim economic pressure, the leadership in Zhongnanhai had to intervene twice to rescue the market.
The first intervention was in April when the “New National Nine Measures” for the capital market were released in an attempt to save the stock market. At the beginning of February, the Shanghai Composite Index fell below the 2,700-point mark, hitting its lowest point in nearly four years. Chairman of the China Securities Regulatory Commission, Yi Huimang, was dismissed and replaced by Wu Qing. However, the new policy in April did not instill investor confidence, resulting in a thousand stocks hitting limit down. By September 20, the index fell back to 2,700 points. It was evident that this first attempt to rescue the market had failed miserably.
The second market intervention occurred after late September. The CCP Central Committee began intensive market interventions, from collective meetings in the financial sector to year-end political bureau and central economic work conferences. However, each time a market rescue policy was announced, it was quickly countered by market downturn. This highlighted the fading illusions about the CCP being omnipotent and capable of rescuing the economy.
Faced with difficulties, the CCP authorities reluctantly acknowledged economic contraction. The People’s Bank of China’s report on the implementation of China’s monetary policy for the third quarter of 2024 stressed the importance of promoting a reasonable rebound in prices and maintaining prices at a reasonable level. In the December central economic work conference, it was also mentioned that next year should aim to maintain “overall price stability.”
Why did the market interventions fail? There are four main reasons:
1. The times have changed; there have been fundamental changes in China’s domestic and international environment, with the external world shifting to the right, global industrial chains reshaping around the CCP, internally, the CCP is again facing overcapacity issues and economic recession.
2. Evil deeds yield evil results; issues like the one-child policy, allocation system, state advances and private retreats, and policies causing the limitation of economic growth have led to dwindling trust in the CCP, causing foreign capital and privileged capital to accept the CCP’s market interventions and quickly retreat. In November, China saw a net outflow of capital totaling $45.7 billion, nearly doubling from October.
3. The CCP is unwilling to save ordinary people and unwilling to truly reform and open up; “firmly refuse to change what cannot be changed.” The announced plan in November primarily aimed to relieve the debt-ridden local governments. Since the plan did not directly benefit the common people, and with no real reform or opening up, the market naturally did not buy into the scheme.
4. Limited policy space: the CCP is preparing for a trade war externally and internally. The December central economic work conference mentioned “moderately loose monetary policy” for the first time in 14 years, but interest rates and reserve ratios in the financial industry were already low, a substantial reduction would introduce financial risks. Financial policy, on the other hand, refrains from distributing money.
All of these factors have brought huge hidden dangers to China’s economy and society in 2025, which we will analyze in detail in the next part.
Under immense economic and social pressures, the entire society is filled with despair and resentment.
On the mainland, it circulated on the internet that the number of suicides in China in 2023 reached 260,000, showing a significant increase in 2024, with over 230,000 reported suicides in the first half of the year, marking a 76.9% rise compared to the previous year, reaching a historic high. Among these cases, 80% were due to debts. Some netizens lamented, “No return in the next life,” with the comment section amassing 490,000 comments, reflecting untold inner pain.
At the same time, this nameless fury has erupted against many innocent victims. The trend of indiscriminate attacks on ordinary people, known as “die-hard,” has become frequent, shocking and terrifying.
The Chinese people, known for their resilience and endurance, are now experiencing such widespread phenomena of lying flat, suicides, and die-hards under CCP rule. Who is to blame?
In 2024, the most glaring phenomenon was the continuous interference of the CCP’s Ministry of State Security in domestic politics, the economy, and even the financial sector, gaining more influence. Party media keeps inciting hatred towards foreigners, leading to incidents like the Jilin murder of an American teacher, and the murders of Japanese students in Suzhou and Shenzhen, causing global outrage.
However, in the latter half of the year, the authorities significantly toned down their hostile propaganda and began to dramatically improve relations with the outside world. Before the late-October BRICS meeting, the CCP reached a secret border agreement with India, ceding over 2,000 square kilometers of territory again. By year-end, hatred propaganda against Japan ceased, seemingly entering a happy era of Sino-Japanese relations. Until now, the CCP had granted visa-free entry to 26 countries, unilateral visa-free entry to 38 countries, and transit visa-free entry to 54 countries. In December, the last ban on Australia was also lifted, allowing fresh lobsters to re-enter China.
These constant shifts characterize what we often see in CCP politics, especially in 2024, with netizens mocking the authorities for “running a big country like flipping a pancake.”
From the arrest of private entrepreneurs in Liupanshui, Guizhou in February under debt criminalization, to the large-scale outbreak of “Ocean Fishing” in the latter half of the year, private entrepreneurs have become sacrificial lambs. According to a summary by the UK’s Financial Times on December 29th, in 2024, a total of 82 senior officials of listed companies in Shanghai and Shenzhen were arrested, demonstrating the severity of the harm.
In November, the non-tax revenue of the CCP surged by 40.4%, shocking the internet; Premier Li Keqiang stated that they must pay attention to it, and in 2025, they planned to launch a special operation to regulate corporate law enforcement, seen as a mere formality without actual effects.
In 2024, China continued to dump excess industrial capacity globally, especially in the field of new energy vehicles, surpassing 10 million vehicles, worldwide. However, this approach of “smoothing out the differences at the expense of neighbors” has met with opposition from various countries.
Of note in 2024 is that the EU finally imposed significant tariffs on China, while some traditional Chinese partners like Canada, Brazil, and Turkey, took similar measures. Of course, in retaliation, the CCP also took its own measures.
In September 2024, the CCP authorities announced a delay in retirement ages. With a gradual increase in retirement age, by 2040, the retirement age for males will reach 63, for female officials 58, and for female workers 55. This approach by the authorities is seen as a solution to the imminent depletion of retirement funds. In 2019, a report by the China Social Sciences Academy stated that China’s pension fund would be depleted by 2025. After three years of epidemics and lockdowns, the real situation is likely worse.
Facing displeasure among the public, the CCP authorities boastfully discussed the longer retirement ages in other countries, conveniently ignoring China’s dual-track social security and healthcare system within the system, as well as the decades of selfless dedication by state-owned enterprise workers and farmers, along with the bloody history of the one-child policy and the slogan once proclaimed by the authorities, “Have one child, let the government take care of your retirement.” Ironically, on December 29, 2024, Xinhua News Agency selected the top ten domestic news stories, highlighting the delay in retirement as a major achievement, boasting, “This is the first adjustment to the statutory retirement age in over 70 years, a significant reform to meet the challenges of an aging population, aiding in the full utilization of human resources in our country.” However, with high youth unemployment rates and many factory workers retiring at 35 under a distorted employment system, many people may not live to see their retirement.
In 2024, following Taiwan’s elections and the inauguration of Lai Ching-te, the CCP held the “Joint Sword-2024A” military exercise in the Indo-Pacific region. After Lai Ching-te’s speech on Double Tenth Day in October, “Joint Sword-2024B” arrived as scheduled. In December, the CCP displayed the largest naval deployment in 30 years. Simultaneously, CCP military aircraft took records-breaking flights across the Taiwan Strait. The CCP’s military pressure on Taiwan is becoming a norm.
However, in the face of CCP threats, President Lai Ching-te of the Republic of China remained unyielding and unexpectedly taunted the CCP on multiple occasions. For instance, in September, during an interview with the media, he stated that the CCP’s goal was not about land but altering the rules-based world order. Lai Ching-te further questioned why, if their purpose was territorial acquisition, didn’t they reclaim the vast lands taken by Russia under the Unequal Treaties? These remarks sparked debates in the international political arena, angering both Russia and the CCP.
In 2024, China caught up with global AI advancements rapidly, yet revealed two issues: first, the political censorship in China leads to a dumbing down of AI responses, and second, the U.S. sanctions and counter-sanctions.
However, in the top ten domestic news promoted by Xinhua News Agency at year-end, the first focused on the resolute governance of the Party, while the second highlighted “a new breakthrough in strategic high-tech fields,” including the Shenzhou-18 and Shenzhou-19 manned spacecraft’s missions to space, and CCTV coverage of the Chang’e-6 lunar backside sampling. However, all of these initiatives were deemed copycats and imitations of space exploration by the U.S. and the former Soviet Union years ago. The intense promotion was criticized for creating a false impression of a prosperous environment.
The erosion of freedom in Hong Kong continued rapidly in 2024. In March 2024, the Hong Kong legislature passed the 23-clause passage. This was the second time since 2003 that the Hong Kong government had pushed for the passage of the 23 clauses. Twenty-one years ago, concerns within the public about the legislation infringing upon freedoms and human rights led to a massive protest of 500,000 people on July 1, forcing the CCP to withdraw the proposal.
On November 19, the “democratic 47” first-instance verdict of the Hong Kong’s National Security Law, which to date had the highest number of charges in the “democratic 47 primary election case,” was announced by the Kowloon Court. Forty-five democracy advocates received heavy sentences ranging from 4 to 10 years, prompting international condemnation for an unfair trial.
This concludes my selection of the top ten domestic news events from China in 2024. How do you view these events? After such significant changes in politics, economics, and international relations, where will China’s economy go in 2025? We will delve into further analysis in the next period.
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