Two years into his presidency, Xi Jinping has consolidated his power and set a bold agenda seeking to revamp China’s economy. Yet with such ambitions come challenges that even a leader as popular as Xi may find trying.

1. Territorial disputes
   Beijing is speeding up land-reclamation projects in the South China Sea to solidify its claims to the waters ahead of a UN tribunal ruling on the disputed area. With the 70th anniversary of the end of the Second World War in 2015, tensions with Japan in the East China Sea could boil over. “If relations continue to deteriorate there’s a possibility of a showdown,” says Alex Neill, senior fellow for Asia Pacific security at the International Institute for Strategic Studies.

2.
Economy
Xi’s efforts to shift the economy from an export-reliant model to a consumption-driven one, plus a possible slowdown in the property sector, could be a drag on growth in 2015. The anti-corruption campaign may also bite.

3.
Environment
China’s air pollution hit its worst level in 52 years in 2013, sparking a massive public outcry. The government responded by enacting a five-year plan to improve air quality at an estimated cost of cny1.75trn (€227bn) but protests are only likely to intensify next year if clear progress isn’t being made.

With the establishment of myriad new urban initiatives aimed at improving everything from water treatment to bus transportation, Vietnam’s capital is tackling the sort of nuts-and-bolts infrastructure projects that are needed to repair the city’s ageing infrastructure.

While the city’s eternally congested streets are but one symptom of the broader problems that still lie ahead, a quiet cultural renaissance is arguably taking place in previously neglected pockets. Tay Ho, once a derelict group of fishing villages on the outskirts of Hanoi that was ignored by locals and tourists alike, has attracted a flood of creatives eager to set up boutiques and bistros. Neighbourhoods such as this reveal the urban potential of what is still one of Asia’s most underrated cities.

A big year ahead for Afghanistan and its new president Ashraf Ghani (pictured). Nato forces are due to pull out by the end of 2014, leaving behind a small presence of troops to assist the Afghan security forces. Ghani, a former World Bank official, would love to focus on the struggling economy but dealing with insecurity will remain his priority. “He’s up to the job but the challenge is a huge one,” says Dr Anand Kumar of New Delhi’s Institute for Defence Studies and Analyses.

Key to Ghani’s success may be his relationship with his election rival Abdullah Abdullah, who initially refused to accept defeat. The solution was a power-sharing agreement, with Abdullah taking up a new position of chief executive. Afghans will hope the two men can put their differences behind them.

1. Burma
   A major test for Burma’snascent democracy will be whether opposition leader Aung San Suu Kyi is allowed to stand. A constitutional clause currently bars her from running for president; no one with children or a foreign spouse can take the top job. Only if this is dropped can Burma claim to be turning into a real democracy.

2.
Thailand
The country’s new military rulers promise elections by the end of 2015 but don’t hold your breath. Prime minister Prayuth Chan-ocha is already suggesting he needs more time to complete his “road map”. His supporters weren’t keen on elections before the coup – perhaps because they tended to lose.

3.
Japan
Challenges lie ahead for Japanese prime minster Shinzo Abe in 2015. With the jury still out on Abenomics, local elections in April will be a barometer of his popularity. Two key issues still to be resolved: a planned increase in sales tax to 10 per cent and the restart of Japan’s nuclear reactors.