The following is the extended version of an op-ed by Philipp Ivanov, Senior Fellow at the Asia Society Policy Institute appeared in the South China Morning Post. He is the founder of the China-Russia Program at Asia Society. Philipp is also currently Chief Programming Officer at Asia Society in New York.

Vladimir Putin and Xi Jinping will enter the Year of the Dragon emboldened but weakened.

Emboldened by the resilience of their countries in the face of growing Western pressure. Encouraged by the tacit support of the geopolitical “swing-states” of the Global South. Quietly confident that the Western resolve to confront, contain and compete with Moscow and Beijing is being diluted by the political and societal divisions.

But behind the bravado, Xi and Putin will greet the New Lunar Year enfeebled by the structural vulnerabilities of their economies which have lost or are losing access to Western markets, technologies, and investment. Fading are China’s glow as the world’s most dynamic economy, and Russia’s credentials as an energy superpower. While Putin and Xi are in total control of their political systems, cracks are appearing — from popular protests in Bashkortostan in Russia’s Eastern Siberia to the embarrassing disappearance of China’s foreign and defense ministers.

In the Chinese zodiac, dragons are associated with risk, intelligence and tenacity. Putin and Xi no doubt see themselves as possessing these qualities in abundance. They will definitely need them in 2024.

Vladimir Putin will face two major trials this year — the Presidential elections in March and the continuing war in Ukraine. The elections are not expected to be either fair or free, and Putin is set to win. But this elaborate political theatre will nevertheless test the resilience and cohesion of Putin’s system of patronage and control, provide an opportunity to elevate new players and get rid of underperformers, and importantly gauge the mood of Russia’s silent but diverse and moody electorate.

Putin made the war in Ukraine an existential battle for survival and sovereignty of “Mother Russia” against Western aggression. He also made the war a centerpiece of his re-election campaign and put the Russian economy on the war footing. A vote for Putin in March is a vote for a long war. But the majority of Russians are ambivalent or openly annoyed about his campaign in Ukraine. Various polls show that Russians are mostly worried about the domestic economy and social services, much less about the future of the world order, which — according to Vladimir Putin — is being decided in Ukraine. Reconciling the fears of the inward-looking electorate with the overblown patriotic rhetoric of the war will be a challenge, even for such a masterful political narrator as Putin.

Despite these contradictions, Putin’s win in March is guaranteed. His victory in Ukraine is far from certain. Vladimir Putin is playing a battle of wills. Ukraine’s failed counteroffensive and uncertainty about continuing Western support for Kiev gave Putin a boost of confidence. An astute student of Stalin, Putin has also dramatically overhauled military production to support the war, much like Stalin did in 1941. Increased production gives the Russian army a quantifiable superiority in ammunitions. The Russian leader is also closely watching the elections across Europe and the United States, hoping that war fatigue and a swing to the right will further weaken support for Ukraine. But a change of leadership in Washington and London may not be enough to turn the West away from Kiev. Ukraine is not going to surrender. It is fighting for its survival as a nation, with unrelenting diplomacy and a courageous army, backed by the people. Across Western political elites and security bureaucracies, Russia is now seen as a fundamental strategic threat that needs to be confronted and contained, preferably as far away as possible from the NATO borders. A stalemate is probably the best scenario for Vladimir Putin in 2024.

The Russian President will also need to watch the economy for signs of overheating and breakdown. Russia has thus far demonstrated a remarkable resilience against Western sanctions and the ripple-effects of the war. The International Monetary Fund predicts the economy to grow by 1.1% in 2024. But this growth is fueled by the war machine — over 29% of the state budget this year will be spent on defense. Inflation is persistent and the ever-tightening noose of sanctions and restrictions – now targeting the “grey import” channels in third countries, including in China - deplete the economy from critical technologies, such as airplane parts, semiconductors and manufacturing equipment. The crown jewel of the Russian economy — its energy sector — remains robust. But if the oil price hovers around USD $50-60 dollars, it won’t be enough to sustain Russia’s war and social expenditure.

In the social sphere, Putin will keep an eye on dissatisfaction and tensions in Russia’s impoverished multicultural periphery, hit hard by the stagnating economy and the disproportional conscription of Russia’s young ethnic minority men to fight in Ukraine. The ongoing nationalist protests in the Republic of Bashkortostan against the jailing of a popular environmental activist is a test for Putin’s system. Overreaction will upset a delicate balance of inter-ethnic relations, touted by the Russian President as one of Russia’s strengths vis-à-vis a “colonial” West. A weak response to a rare open political opposition to a local government will embolden other groups and regions unhappy with Moscow’s heavy-handed rule. Putin will watch closely the local politics of Chechnya and Dagestan, where nationalism, corruption and poverty form a powder keg that Putin knows only too well from his own experience of the two Chechen wars.

Dragons are notoriously unpredictable, and Vladimir Putin may find 2024 harboring more surprises than he is comfortable with.

Across the Eurasian heartland in Beijing President Xi is far more assured than his friend in the Kremlin. China is not at war. It is not isolated. Its globally connected economy is diverse and robust, and at least ten times larger than Russia’s. President Xi has a full control of the Chinese political system and society. Even local protests are not tolerated. Xi has steadied the relationship with the United States. He is building China’s credentials as a leader of the Global South.

The Dragon is a symbol of imperial China, of power and ascendancy — central to Xi’s vision of the great rejuvenation of the Chinese nation. 2024 is also an auspicious year for Xi. It’s exactly twelve years ago — a full cycle of the Chinese zodiac – when he replaced his predecessor Hu Jintao as the general secretary of the Chinese Communist Party.

While Xi is confident and powerful, he also looks anxiously at the year ahead. On his mind are three wicked and interconnected problems: economy, Taiwan and the US-China relations.

On the surface, the Chinese economy is robust. It grew by 5.2% in 2023, meeting the government target. But underlying trends — described by Adam Posner from the Peterson Institute as “a long economic COVID” — point to long-term headwinds and even stagnation. Deflation is persistently high and deteriorated in the last few months. The problems in the real estate sector — accentuated by the dramatic collapse of the property giant Evergrande — continue to affect consumer and business confidence. Foreign direct investment in China is in sharp and accelerating decline. The Chinese population is aging, putting additional pressure on productivity, the labor market and social spending. Local debt problems will continue to create economic tensions in the provinces.

Xi’s China in 2024 will continue to drift towards the securitization of the economy and ideological rigidity. The Chinese leader will be well advised to rekindle China’s entrepreneurial spirit, which served the country so well since the start of the reform and the opening-up period. Xi’s ever-tightening political and economic grip has had a chilling effect on China’s social and economic vigor. China’s youth is disillusioned by fading career prospects, high unemployment and the continuous interference of the State in their lives. China’s capitalists and foreign firms are voting with their money — in September last year China recorded the largest outflow since 2016 — at $53.9 billion.

China also faces a hostile world. Across the Taiwan Strait, Lai Ching-te from the Democratic Progressive Party, a candidate least favorable to Beijing was elected the new President. Lai advocates for the status quo approach to the Cross-Strait relations and resistance to re-unification with China. His election dashes any hopes in Beijing for a more friendly leadership and public opinion in Taipei. While Lai’s thin majority is a somewhat positive signal to Beijing, it also shows that the Taiwanese people and the political leadership are aligned on the need to preserve Taiwan’s autonomy.

Across the Pacific Ocean, the United States ramps up its strategy of competition with China, seen by Xi as containment by stealth. 

Xi knows that hostility towards China is only issue that unites the Republicans and Democrats. He has already factored in a long-term contest with America. But Xi worries about the unpredictability of the U.S. elections and Donald Trump, whose anti-China instincts will likely lead to the escalation of trade, technology and security tensions.

Putin and Xi will also be looking for tactical gains which the Trump victory may present to them — a weakening of the U.S. alliances for which Trump showed disdain during his first term as President, widening political and societal divisions, and a more transactional and erratic American foreign policy.

In Xi and Putin’s minds, democracy is inherently messy and suffers from short-termism. Their political narratives contrast chaotic Western democracy with the competent autocratic systems of China and Russia, whose leaders can rule for decades.  But they also see the resilience of democratic states and their dynamic economies. They begrudgingly accept the power of alliances and the technological superiority of the West.

Xi and Putin are optimistic about their own relationship. China and Russia are as close as they have ever been. As lonely major powers with few allies and friends, they are united by their common enemy in the West, autocratic values, burgeoning trade, and convergent foreign policy interests. But beneath the surface, fragilities and tensions remain. Xi will watch closely Russia’s progress in Ukraine and its overtures to North Korea. Putin will be worried about China’s growing leverage over Russia. He will be nervous about any new signs of China’s dialing down of economic and diplomatic support for Russia.

We don’t know if the Chinese and Russian leaders believe in horoscopes. But we know they care about their legacies. Both in their seventies, and in charge of the world’s major powers, each year at the helm is worth hundreds of pages in history books. Putin and Xi are facing a volatile world in 2024. How will they respond to its inevitable ups and downs? Faced with the weight of domestic problems and hostile global competitors, can Putin and Xi get through the Dragon Year unscathed?