The global situation is, by now, pretty transparent.
First, the war in Europe. It's important to realize that what's happening there is that a large fraction of Russian military power is being tied down by a smaller fraction of Western military power via the proxy of Ukraine. Despite all of mainstream media wanting you to believe otherwise, Ukraine post-invasion is practically a failed state. Its economy has collapsed and so much of its man power have either fled the country or been pressed into the trenches that without Western aid, they'd crumble in a few months. But they're still fighting because NATO is pushing them on.
Second, US leadership, having successfully tied down Russia, is preparing to direct the bulk of its resources against China - the actual threat from the perspective of US hegemony. Similar to Ukraine, it is attempting to do this through setting the stage in Asia for a proxy conflict. The proxies of choices are Taiwan, Philippines, Japan, and potentially South Korea. The US intends to bleed China with these proxies on the front lines, and all of them have unfortunately been infiltrated sufficiently by Western media and institutions and ideologies, that they'd actually be willing to go for it.
Third, not satisfied with the chances, the US hopes to create a second front against China with India, but the Indians are most likely not going to bite unless and until China is on the verge of defeat. Then the Indians, opportunistic as they always are, will happily join the war at the last minute to grab Chinese territory and "free Tibet."
This is the sort of scenario that Xi is likely referring to when he's telling the government to prepare for the worst. The US will happily stay on the back lines - as it has in Ukraine - while Asians kill each other. It's the perfect recipe for preserving US hegemony as you're bleeding both your strongest rivals and your strongest allies, simultaneously. This was effectively the US strategy in World War 2, as even though it lost troops, its homeland was never remotely threatened and that made the difference when it emerged from the war more powerful than ever.
Unfortunately, the US's Asian vassals have been so compromised that they actually believe in dying for Western hegemony. Against such dangerous delusions, China's best options can only be to not take the bait. If you allow yourself to be dragged into a war vs. the US's Asian proxies, the only possible winner is the US. To avoid that outcome, China should be patient and focus on self-strengthening - correcting the atrocious demographics, fixing the youth unemployment, catching up in areas like chips, etc. The goal in that respect is to expand the time horizon, reach better technological parity, and wait for the US to slip up, as inevitably it will.
Taiwan, at the end of the day, isn't going any where, and as much as Xi would like to be the leader that solved the Taiwan problem, taking the fight before you're ready is worse than living to fight another day.
