You internal factional dispute will never happen with nuclear weapons - they are not that stupid.
Here is one scenario:
After a successful conquest of Taiwan, and effective subjugation of Australia, a certain Chinese general has greatly increased prestige which is viewed as a potential threat by the political authorities. They are barely able to deal with "unexpected" consequences of the campaign and the country is in a severe economic decline. There is harsh conflict between several internal factions and there have been some executions of public officials for "economic crimes".
The general is recalled to Beijing for "consultations" as part of an "anti-corruption" campaign. The handwriting is on the wall. His backers are losing.
The general diverts to a logistics center which holds Chinese nuclear weapons and takes control of them. He has certain demands for protection of his faction.
The negotiations do not go well, and the general provides an object lesson to a remote area. It is publicly described as a test of weapons readiness. Actual causalities are quite low.
The center government assaults the logistics center. Preparations were hasty and the commanders maintain they have inadequate numbers of reliable troops. They request and are granted full authorization to use "all available force levels" (e.g. nuclear weapons) to insure success of their mission.
Which faction uses the nuclear weapons cannot be determined by the survivors but causalities are heavy and the damage is extensive. The incident is described as a "live fire training exercise".