If you read Xi's speeches after Dec. 2020, it becomes clear that for the first time, he is showing signs of guardedness and vulnerability. There is more stress on there being a long conflict with the west, and that there will be setbacks along the way. It is gradually sinking in that the struggle will be a long one, with sacrifice for the Chinese people, and that there will be losses. He maintains optimism that China will win in the end (led by the CCP of course), but it will not be an easy victory. This means that even while he is sending Wang Yi and Yang Jiechi to Anchorage to meet with US SoS Anthony Blinken and Jake Sullivan, internally, the Chinese media will be telling its Chinese audience in Chinese, that hopes should not be too high. Trump is out, and his favorite tool was a big club. Biden is in, and while the US rhetoric will soften, in fact, the Biden administration may come up with moves will be even more aggressive against China, which it will not widely publicize.
The most significant editorial at the end of 2020 was where some Chinese were attacked for being "soft" in their opposition to the US; this indicates that this anti-Xi whispering campaign is already working on the ground in China.
While there is no internal organized opposition to Xi, his greatest fear is of an unorganized whispering campaign whose narrative is like this:
1. Xi was overly aggressive about the SCS, Hong Kong, Xinjiang and decline of the west. The west was slow to react, but when it did, it coalesced into a view where China is seen as the west's single greatest threat on the economic, political, social, military and cyber fronts. This overly aggressive, overly nationalist move is dangerous because Chinese nationalism is hard to control in China, and may push China into the direction of war with the West over Taiwan and other issues;
2. Xi has control over the Chinese official media through his role as General Secretary, and he is lashing out at the west through Global Times, CGTN and other media, which is making the confrontation worse. The Chinese people are trapped between an overly nationalist leader with his overly nationalist lackeys, and a hostile west determined to slow China's growth at all costs short of war.
3. While the western business community (Business Roundtable, etc.) will try to convince Biden to be less confrontational with China in the hope of maintaining their China businesses, they will eventually be forced to choose sides. US businesses will eventually be forced to support Biden administration policies by their boards, even if these decisions hit their bottom line.
For many urban Chinese (first-tier cities), it is obvious that Xi has painted China into a corner.
This means that the Biden administration should aim to separate Xi and his appointments from the rest of the party, and target them with highly-targeted sanctions. The message would be that Xi and his proteges have set the US and China relations on the wrong track, and if they are removed from power (admittedly unlikely in the short-term, but something worth aiming for), then US relations with the west can be set on a healthier track.
The previous Trump sanctions were not targeted enough. Smarter sanctions should be:
1. Xi appointments from 2013 forward will be denied visas, and if they arrive, they will be arrested and detained.
2. All assets (real estate, bank, financial) accounts held in the US, UK, AU, NZ, CA will be seized.
3. If they have children or grandchildren living in those countries, they will be expelled and not allowed to return, and they will forfeit all assets.
4. All Chinese journalists working for official Chinese media and living in those countries will be denied their visas, and will be denied broadcasting licenses and will not be allowed an Internet presence on western Internet media.
This move would start a whispering campaign in China, which would make things very unpleasant for Xi during his remaining time as Chinese leader by separating him and his supporters from the rest of the Party.