Trump 2.0: Musk and Ramaswamy's government efficiency push seen as major threat by Chinese aAdvisor

US President-elect Donald Trump's ambitious plans for his second term, which include creating a new Department of Government Efficiency (DOGE) headed by tech billionaire Elon Musk and Indian-origin entrepreneur Vivek Ramaswamy, have been deemed a significant threat to China. This warning comes from Zheng Yongnian, a top academic and policy advisor to the Chinese government.

Zheng, the dean of the School of Public Policy at the Chinese University of Hong Kong’s Shenzhen campus, expressed concerns during the Baichuan Forum, hosted by the Institute for International Affairs (IIA). He highlighted that the proposed overhaul aimed at creating a more efficient US political system would intensify pressure on China’s current governance model.

“A more efficient US political system would put huge pressure on China’s current system,” Zheng stated. He added that this pressure would not be exclusive to China but would also impact other regions, including Europe.

Trump's decision to appoint Musk and Ramaswamy to lead DOGE is part of his broader agenda to reduce government regulations and workforce size. The duo plans to eliminate thousands of regulations to streamline government operations.

Zheng emphasized that the medium to long-term challenges for China might stem from these US internal reforms. Should Trump succeed, the US could develop a new, more competitive system, which Zheng described as “state capitalism with American characteristics.”

Zheng urged not to underestimate the institutional reforms spearheaded by influential figures like Musk. He also noted that China should brace for increased tariffs and other measures as Trump aims to reinforce his tough stance against Beijing. These measures are expected to include a 60% tariff increase on China’s exports to the US.

During his previous term, Trump had already taken a hard line on China, addressing issues related to Taiwan and the South China Sea. With his re-election, similar measures are anticipated. China asserts its claim over Taiwan and the majority of the South China Sea, which is contested by other nations such as the Philippines, Vietnam, Malaysia, Brunei, and Taiwan.

In response to potential tariff hikes, China has introduced new policy measures to bolster its export sector against “unreasonable foreign trade restrictions” and foster a favorable environment for exports. Chinese President Xi Jinping, during recent international meetings, reaffirmed China’s commitment to promoting high-standard opening up for investment and trade. Additionally, China has expanded its visa-free entry scheme to include nine more countries, including Japan, increasing the total to 38.

Zheng suggested that China should counter the US internal changes by expanding its openness, potentially including US capital and citizens, to isolate US hardliners and anti-China factions.

He concluded that while competition between China and the US is inevitable, the nation that embraces greater openness will ultimately prevail. “The ultimate winner will undoubtedly be the side that is more open,” Zheng said confidently, asserting that China will outperform the US in this regard.