Elon Musk’s department biggest threat to China in Trump 2.0, warns Xi advisor

US President-elect Donald Trump’s Department of Government Efficiency (DOGE), to be headed by billionaire Elon Musk and Indian-origin entrepreneur Vivek Ramaswamy, will be the biggest threat to China as Beijing has to compete with a far more efficient US political system, according to a policy advisor to the Chinese government.
Zheng Yongnian, dean of the School of Public Policy at the Chinese University of Hong Kong (Shenzhen), observed that if DOGE is successful, these reforms could lead to a competitive US system akin to “state capitalism with American characteristics,” potentially exerting long-term pressure on China and Europe.
And this will be the “biggest risk” for China during Donald Trump’s 2.0, Yongnian said.
“A more efficient US political system would put huge pressure on China’s current system. Of course, the pressure is not exclusive to China but also affects others, especially Europe,” the policy advisor was quoted by news agency PTI as saying.
Donald Trump has named Musk and Ramaswamy to lead the Department of Government Efficiency (DOGE). However, despite the name, it is not a government agency but will advise the government from outside.
Announcing the move, Trump had said that Musk and Ramaswamy will work from outside the government to offer the White House “advice and guidance” and will partner with the Office of Management and Budget to “drive large-scale structural reform and create an entrepreneurial approach to Government never seen before.” He added that the move would shock government systems.
Musk and Ramaswamy have already outlined plans to eliminate “thousands of regulations” and downsize the government workforce.
“In the medium to long term, the greatest pressure on China may come from changes within the US. …I think we should not underestimate the institutional reforms prioritised by figures like Musk,” Yongnian warned.
China is bracing for the challenges posed by Trump’s second term, which begins on January 20, including his threats to increase tariffs on over USD 427 billion worth of Chinese exports to the US. Trump, known for his tough stance on China, is also expected to reinforce measures on contentious issues like Taiwan and the South China Sea.
Zheng urged China to counter US reforms with its own institutional changes, emphasising the need to focus on domestic growth and reduce reliance on the West through the “dual circulation” strategy. “Fully tapping into internal growth potential is something we must do,” he said.
Donald Trump is set to take over the US administration on January 20.