External events impact significant policy changes. This study integrates the Advocacy Coalition Framework, Multiple Streams model, and Punctuated Equilibrium Theory to analyze how external events influenced China’s abolition of the Labor Reeducation System (LRS). Findings show that external events broke through decision makers’ attention constraints, shifted power dynamics, and created an opportunity for change. Limited learning occurred within coalitions as a tactical response to shocks, while intercoalition learning resulted from higher authorities’ interference. Destabilizing events reduce consensus requirements and reinforce China’s authoritarian decision-making style. The role of external events depends on their alignment with the Communist Party of China’s (CPC) ideology and political interests.