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The People’s Republic of China is not shy about its ambitions. The report to the 20th Party Congress in October 2022 declared the ambition of building China “into a great modern socialist country that leads the world in terms of composite national strength and international influence by the middle of the century.” Officials insist this will not entail hegemony or subverting the global order; rather, as Foreign Minister Wang Yi said, Beijing seeks “an equal and orderly multipolar world.”

In practice, however, China under Xi Jinping has grown into an assertive challenger to the liberal rules-based order led by the United States (at least, before the new Trump administration) and its Western allies. Xi’s China envisions a system less dominated by Western powers and more aligned with Chinese economic, technological, and diplomatic priorities — especially across the Global South.

A core concept in Xi’s philosophy is “national rejuvenation,” the restoration of China’s historic place in global affairs. Programs such as the Belt and Road Initiative, the Global Development Initiative, and the Global Security Initiative have economic and security goals, but they also have the effect of extending China’s geopolitical influence and encouraging less liberal and democratic governance models.

Domestically, though, Xi faces a dilemma. An aging population, piles of local government debt, a troubled property sector, and burgeoning youth unemployment are slowing the economic growth and straining the social stability that once buttressed the Communist Party’s legitimacy. Xi knows China needs a vibrant private sector to generate jobs, growth, and competitive products in areas like AI, EVs, and renewable energy. But he remains wary of ceding too much authority to market forces, and his centralizing instincts can stifle the risk-taking needed for breakthroughs.

How he will walk this tightrope is uncertain. Some speculate that if economic pressures intensify he might clamp down further, undermining the innovation base critical to China’s global aspirations. So far, though, he seems to be doing the opposite. Over the last several months China has offered more support for the private sector, loosened its grip on its giant tech firms, and opened the economy more to foreign trade and investment, with the aim of binding foreign businesses and countries more tightly to the PRC and its supply chains.

“China's quest to reshape the global order hinges on sustaining domestic stability and economic growth while projecting influence abroad.”

This liberalization is not the only thing currently boosting China’s fortunes. While Washington’s export controls have left the PRC short on chips, they have also accelerated its decades-long push for self-sufficiency. As part of that effort, China has restructured its national science and technology system and is increasing its R&D budget in areas like quantum computing, synthetic biology, and advanced AI, while pitching itself as a destination for global talent. By contrast, the US under Trump so far seems to be throttling research funding and limiting scientific openness. That could further narrow America’s already dwindling research edge.

In a similar vein, the PRC’s manufacturing base has quickly moved up the value chain, making its products (for example, electric vehicles) more competitive with those of leading foreign firms. If, despite Xi’s more open policies, economic growth falters, the PRC may lean even harder into promoting exports of these goods, thus straining China’s global trading relationships.

An issue uppermost in many people’s minds is the fate of Taiwan, which dominates advanced semiconductor production. Although a sudden military move seems unlikely, any disruption — blockade, cyberattack, or standoff — could halt chip flows, affecting global industries from computing to cars. And any diplomatic miscalculation by the US, China, or Taiwan could escalate tensions.

In short, China’s quest to reshape the global order hinges on sustaining domestic stability and economic growth while projecting influence abroad. Policy signals will hint at how well Xi is balancing these goals, but whatever choices he makes will have far-reaching consequences.

For global CEOs, this means flexibility is essential. First, reduce reliance on a single region or supplier. Second, invest in policy and regulatory intelligence to anticipate abrupt shifts. Third, prepare for potential disruptions in chip supply linked to Taiwan. Finally, keep a close eye on China’s expanding scientific and R&D footprint. Remember how the release of DeepSeek upended assumptions about AI and threw the industry into turmoil? Brace for the same in other fields.