Chinese leadership is facing a rare backlash for its handling of the US trade dispute

MayCaesar

It is hard to know well what is happening inside the ruling groups in such censor-heavy societies, but, in general, non-violent struggles for power are not uncommon. Communist Party of China especially is renown for decentralization of its upper circles, and their members do not always conform with the single dominant narrative. The most famous example is probably the Tiananmen demonstrations of 1989, where the party leadership was split on how to handle the demonstrations, and a lot of individuals had to resign for speaking out against the violent suppression.

It is not a stretch of imagination to expect quite a few members of the generally group-based leadership to be very unhappy with and wary of the appropriation of power Xi is currently performing. Few of them want to return to the Maoist times, when one man decided everything and could eliminate anyone he wanted for even the slightest insubordination.

Trade dispute with the US seems like a very convenient topic to organize resistance around. Chinese political paradigm does not particularly support one way of handling the dispute or another, so debating this subject is unlikely to put the participants in danger - and at the same time, it is a good venue for settling more-or-less relied points of disagreement. Taking a hard stance against Xi's position can shift the scale some towards the party establishment and neutralize Xi's ambitions.

I assume this will be the primary factor deciding China's stance on handling the dispute. While economical considerations are certainly important, I would expect the power struggles within the party to be the main factor here. Whichever group wins and establishes dominance, will dictate the trade terms.