The recent leak of a Chinese Communist Party directive has revealed a regime in crisis. American Thought Leaders in conversation with China analyst Heng He.

By Lisa Peryman for Probe International

In the wake of U.S. tariffs on the world’s largest export economy, leader Xi Jinping looks to revive Maoist dogma, as he gambles on nationalism and external conflict to ensure the survival of the Chinese Communist Party—the paramount concern of a leadership that prioritizes Party over state as its raison d’être.

In conversation with longtime China analyst Heng He, host Jan Jekielek, of American Thought Leaders, explores what the leaked directive portends for global stability.

Summary of Key Points

Strategic Shift Against U.S. Dominance

Heng claims the directive exposes a bold challenge to U.S. hegemony. “This is huge,” he emphasizes, insisting this end goal —although broadly surmised—has “never” been openly discussed before, even internally. In its efforts to isolate Washington, Beijing is mobilizing a “united front” approach in its bid to forge an alliance with European nations also impacted by the Trump administration’s tariffs (such as the U.K., Germany, and France). The move, says Heng, marks a departure from decades of economic pragmatism, signaling Beijing’s confidence in its rising power and intent to reshape the international order. [See also: CCP’s Total War Plan Against Trump: Leaked Document]

Economic Crisis and Planned Economy Regression

Facing U.S. tariffs and collapsing exports—the backbone of China’s growth—Heng argues the CCP is preparing for a worst-case “closed economy” scenario, echoing Cultural Revolution-era central planning. With foreign capital fleeing and consumer markets weak, the regime risks mass unemployment and social unrest, which represents an existential threat to the legitimacy of the Party.

Xi Jinping’s Weakened Grip and Power Struggles

Unconfirmed reports suggest Xi Jinping suffered a health crisis (purportedly a stroke in July 2024). Premier Li Qiang, fearing social unrest, is said to have lobbied to reinstate retired leaders to steer crisis management during Xi’s absence—an opportunity, Heng believes, Party elders and current senior members leveraged to curtail Xi’s authority, particularly over the military. Heng likens Party elites in conflict to mafia-style succession battles where temporary power loss becomes difficult to recover, even permanent.

A perceived push by Xi Jinping for a return to Maoist-era ideology clashes with Li’s pragmatic efforts to stabilize China’s spiraling economy, observes Heng. While the premier seeks to reassure global investors by touting “reform and openness,” Xi’s camp continues to advance draconian laws (e.g., anti-espionage rules, raids on consultancies) that deter foreign capital—a contradiction undermining recovery efforts.

Meanwhile, Xi’s reforms to transform the military into a U.S.-style fighting force have stalled, with leaks exposing vulnerabilities.

The People’s Liberation Army—designed historically to protect the CCP’s power, not defend the nation—struggles to pivot from its core role of suppressing domestic dissent to waging foreign wars. While military expansion has enriched elites through lucrative contracts, combat readiness has yet to be accomplished. Xi’s ambitions to that end hit a wall when a U.S. think tank exposed the gap between Beijing’s geopolitical bluster and the country’s actual warfighting capabilities. The detailed leaks could only have been sourced from high-ranking Chinese insiders, says Heng. The systemic failures in China’s war readiness and coordination the leaks allege enraged Xi, who later ordered purges of PLA Rocket Force (PLARF) commanders and supply-chain officials. These moves, says Heng, underscore a military plagued by graft, with procurement networks the most vulnerable. (PLARF is China’s strategic and tactical missile force, and a branch of the military crucial for the invasion of Taiwan).

Impact of the Tariff War on China’s Global Strategy

The U.S.-China tariff war has severely disrupted Beijing’s economic playbook. Recent efforts to forge closer relations with neighboring Southeast Asian countries, also impacted by the Trump tariff war, have resulted in “lots of promises,” notes Heng. But these neighbors are rivals with China. As export nations, they all vie for trade with the United States. What they want, Heng says, is “zero tariffs with the U.S., not China.” Other areas of expansion on the world stage are similarly threatened by potential tariff-related outcomes.

Heng contends the Belt and Road Initiative (BRI), already strained by defaults and instability in partner nations, faces collapse as U.S.-led financial pressure starves it of capital. He also warns the BRICS partnership, reliant on China’s trade dominance, risks irrelevance. Africa, a cornerstone of China’s checkbook diplomacy, may also pivot as Beijing’s coffers shrink.

Domestically, export-sector closures threaten mass unemployment, exposing the CCP’s structural weakness: an economy built for global manufacturing, not internal demand. With no quick fix to reorient decades of policy, social instability looms—a nightmare scenario for a regime clinging to control. The tariff war has thus not only eroded China’s global leverage but also laid bare the fragility of its economic model.

Big Picture Implications

Heng points to the CCP’s combative stance as risking further isolation for China as nations prioritize U.S. trade ties over Beijing’s offers. Internally, the regime escalates repression to preempt unrest, blaming the U.S. for economic woes, but Heng cautions Xi’s desperation could lead to reckless actions. Xi’s aggressive military expansion faces internal chaos with recent purges mirroring Stalin’s pre-WWII moves, according to Heng; moves that could potentially cripple combat readiness. While the PLA focuses on “gray zone” coercion (in the South China Sea), Heng warns the CCP might provoke conflict to divert from domestic crises, despite lacking readiness for a full-scale U.S.-allied war.

U.S. Accuses China of Pandemic Cover-Up

The White House launch of a new COVID-19 origins webpage marks a pivotal shift, formally implicating China for its role in the pandemic. Heng highlights this as unprecedented, noting the U.S. historically avoided direct blame despite evidence of gain-of-function research at Wuhan labs. The CCP’s obstruction of investigations, destruction of evidence, and early 2020 actions—halting domestic travel while allowing international flights—fueled global spread. Heng considers the cover-up of COVID-19 even more culpable than the origin of the virus.

Historical Parallels and Strategic Shifts

Comparing today to post-WWII realignments, Heng calls this era the “most important time” since the 1940s. The U.S., he says, must abandon Cold War-era strategies, such as leveraging China against Russia, and instead confront Beijing’s authoritarian model. The CCP’s ambitions—military expansion, tech dominance, and undermining democracies—require a unified democratic front to rewrite rules prioritizing security over unchecked integration.