Every year, China Political elites gather in Beijing for the so called “two sessions” – the annual plenary sessions of the two organizations that formally make national-level political decisions in the People’s Republic of China: the Chinese People's Political Consultative Conference (CPPCC) and the National People's Congress (NPC). Yet this year’s was different than most. It marked the start of the next five-year plan, which reflects Chinese leadership’s priorities and strategies and gives them an opportunity to highlight major policy initiatives. At the same time, this year’s major political set piece has added significance because it coincides with the 100^th anniversary of the founding of the Chinese Communist Party – an opportunity for Xi Jinping to both extol the Party’s accomplishments and  solidify his still-growing political power.

If there was one propaganda message coming out of this year’s two sessions, it was that “China is back.” After a year in which China’s people and reputation were ravaged by the COVID-19 pandemic, in which China’s economic growth hit its lowest point since 1976, Chinese Premier Li Keqiang declared the goal of expanding China’s economy by over 6 percent in 2021. Though certainly slower than past years of Chinese growth, such an objective is especially striking when compared to the slower rate of growth expected from the broader global economy. The rest of the session focused on the future and all that the Chinese Communist Party will accomplish in areas as varied as vaccination diplomacy, environmental protection, innovation, housing, military spending (increasing at a higher-than-expected 6.8%), retirement policy, and expanding China’s role in international trade.

Yet while the clear message of all the pomp and propaganda on display has clearly meant to convey a confident message of a nation on the rise and tackling the challenges of the day, the realities beneath the surface revealed a nation that is deeply concerned about its present and future circumstances. It is therefore important to not just reflect on the confidence that clearly shapes the views and behavior of China’s leaders, but also on the tremendous challenges they will face in the coming years.

For instance, the two sessions revealed new controls that Beijing will enact to deepen its control over Hong Kong. NPC deputies will soon consider proposals to only allow “patriots” who are loyal to the Chinese Communist Party to run for election in the formerly-autonomous city, blocking opposition politicians from holding office. By further imposing an authoritarian political system on Hong Kong, Beijing has highlighted its own insecurities. China’s original proposal to Hong Kong of “one country, two systems,” in which the Party would co-exist with other political parties and engage in normal democratic debates, was always unrealistic. As the CCP has demonstrated since before it came to power in 1949, it cannot tolerate opposition or obstacle. Beijing’s abandonment of its past approach not only has important implications for Taiwan – it highlights the reality that it will overwhelm with force what it cannot convince with the strengths of its ideas and arguments. When forced to choose between power and principles, it will pick the former.

For Beijing, increasing unemployment and addressing income inequality is not just a requirement for political smooth-sailing as it is in democracies. For China’s leaders, the prospect of slow growth and rising unemployment threatens the stability of the regime itself.

Even Beijing's ambitious target to grow its economy by 6 percent and create 11 million urban jobs is rooted in the Party’s deep insecurities about its legitimacy. This reflects Xi Jinping’s 2017 determination that the “principal contradiction” facing China – a crucial concept in Marxism-Leninism – had changed. “What we now face,” declared Xi, “is the contradiction between unbalanced and inadequate development and the people's ever-growing needs for a better life.” He went on: “The needs to be met for the people to live a better life are increasingly broad. Not only have their material and cultural needs grown; their demands for democracy, rule of law, fairness and justice, security, and a better environment are increasing.” For Beijing, increasing unemployment and addressing income inequality is not just a requirement for political smooth-sailing as it is in democracies. For China’s leaders, the prospect of slow growth and rising unemployment threatens the stability of the regime itself.

Similarly, while Beijing has unsurprisingly failed to address its actions against Uighur minorities in Xinjiang – which Secretary of State Blinken has called a genocide – Chinese propaganda made sure to highlight the role that ethnic minorities play in the two sessions. Yet while some members of these minorities attended the two sessions in traditional attire and China’s leaders talked about ethnic unity, Beijing continued to push for policies that would undermine the traditions of ethnic minorities. For example, Xi Jinping called for standard Chinese – both written and spoken – should be adopted by all schools; this despite protests in Inner Mongolia against efforts by Beijing to replace Mongolian as the principal language taught in schools. Beijing has also targeted Hui Muslim communities around the country as part of its push for “ethnic unity,” and it has recently tightened its grip in Tibet – including attempting to persuade Tibetans to ignore their ethnic identity and pay less attention to Buddhism. This is not the behavior of a country or leadership that is strong and confident – rather, it betrays deep insecurity about the regime’s sense of the foundations of its own legitimacy.

China faces tremendous problems of unequal growth, particularly between urban and rural areas, and the Party’s inability to address structural problems in the Chinese economy...means that the principle contradiction facing China’s leaders is unlikely to change.

Further, as highlighted by Hamsini Hariharan, the problems facing China’s economy are more structural than simply overcoming the COVID-19 slowdown. After three decades of consistent and rapid growth, it is facing the possibility of entering a Middle Income Trap: “Over the last year, unemployment is rampant particularly among young college graduates and migrant workers who lost their jobs as factories shut down during the lockdown.” China faces tremendous problems of unequal growth, particularly between urban and rural areas, and the Party’s inability to address structural problems in the Chinese economy – which are likely to continue to fester for the foreseeable future – means that the principle contradiction facing China’s leaders is unlikely to change.

There is no doubt that China’s economic, political, and military power has made significant strides in recent decades. Its ability to weather recent economic crises is irrefutable, and the challenges posed by the ambitions and assertiveness of its leadership are undeniable. Yet it is important to remember that China’s leaders also face profound, structural challenges of a depth and breadth that Western leaders need not face. As competition between China and the United States deepens, and Washington seeks to engage Beijing from a position of strength, it would be well-served to remember the true depth and breadth of that strength.

Follow Abraham Denmark, director of the Asia Program, on Twitter @AbeDenmark.

The views expressed are the author's alone, and do not represent the views of the U.S. Government or the Wilson Center. Copyright 2021, Asia Program. All rights reserved.