December 10, 2024 – The Asia Society Policy Institute’s Center for China Analysis (CCA) has released its annual flagship report, China 2025: What to Watch. Using CCA’s unique “inside-out” approach to independent, policy-relevant analysis, the report forecasts the most critical developments to watch in China during 2025 and beyond.

In the introduction, CCA Co-Founder and Managing Director Jing Qian and CCA Director of Research and Strategy Jennifer Choo write that the “coming year will prove pivotal in testing Beijing’s resilience and adaptability as it confronts an increasingly hostile geopolitical environment while navigating extremely complex domestic challenges.” China “stands at a crossroads” in 2025, and the decisions that the country makes will have repercussions for years to come.

Predicting a deepening divide in U.S.-China relations during the coming year, CCA Senior Fellow Lyle Morris says that President Trump “may adopt a more aggressive stance on trade—to possibly include heavy tariffs on Chinese manufactures—that may destabilize an already fragile relationship.” For Morris, “[f]orging discrete areas of cooperation will remain key...Even though the chances of a genuine thaw that resolves fundamental differences...are low in 2025, recent agreements to enhance military-to-military communications and working groups to combat the illicit fentanyl trade are...the kinds of cooperation that can build positive momentum” in U.S.-China relations.

ASPI Managing Director and CCA Senior Fellow Rorry Daniels says that the risk of volatility in the Taiwan Strait will remain high. “In the likely absence of robust U.S.-China diplomacy under a Trump presidency, Beijing’s reactive policy responses to a growing U.S.-Taiwan relationship will be viewed by Washington not only as threatening but also worthy of a counter-response. This downward spiral could easily lead to policy miscalculations and a cross-Strait crisis," writes Daniels.

CCA Senior Fellow Guoguang Wu highlights the Chinese leadership’s struggle to balance the trade-off between maintaining political control and providing incentives to motivate the governing elite. “Anticorruption campaigns will continue and become even more politically selective as the Xi regime struggles to incentivize cadres while also maintaining tight control over them," he writes.

As China’s climate agenda reaches a critical crossroads in 2025, CCA Senior Fellow Li Shuo predicts that more forceful policies to decrease emissions may be difficult to implement as the country struggles with an economic slowdown. “Whether Beijing decides to pledge strong climate targets under the Paris Agreement, transition away from coal, and double down on its clean energy development are key things to watch in 2025,” writes Li.

“All in all, navigating 2025 will demand strategic adaptability, political openness, and policy pragmatism by China’s leadership,” conclude Qian and Choo. “The choices made this year will reshape the nation’s trajectory, not just domes­tically but regionally and globally.”

In other chapters, CCA’s global community of experts considers the prospects for China’s fiscal reforms and industrial policy, along with the complex public health challenges facing the country amid the lingering impact on society of COVID-19.

You can download the report in full here. Members of the media interested in speaking with our experts should email [email protected].