Is Elon Musk’s role in US efficiency reform a new threat to China?

China is looking at US President-elect Donald Trump’s efficiency agenda as a big threat to its exports-oriented economy. It fears a crippling squeeze by America, its biggest importer of products.

Trump’s New Inner Circle

The one man making almost as much noise as Trump on this issue is his biggest supporter, Elon Musk, who also happens to be the world’s richest man.

It’s no surprise that Trump has nominated Musk and Vivek Ramaswamy, an India-born entrepreneur, to lead the new advisory commission, called the Department of Government Efficiency (DOGE), in the new administration.

While DOGE’s intended scope is of an advisory body to streamline the US Federal Government and reduce inefficiency, it is widely accepted that it will wield considerable influence on the incoming administration and its budgets.

Chinese concerns about DOGE

In an interesting turn of events, Zheng Yongnian, China’s top academic and policy advisor, argued that a more efficient political system would put more pressure on China and would prove to be a big threat.

An overhauled US political system in line with Trump’s agenda is expected to slash excess regulations, wasteful expenditures, and bureaucratic red tape to become more competitive than ever.

Combining this with Trump’s promised tariffs under the ‘America First’ policy certainly is not good news for China.

In order to counter Trump’s plan to impose a 60 per cent increase of tariffs on China’s over $427 billion annual exports to the US, China has announced new policy measures to protect its export sector. It has expanded its economic ties and added nine more countries – including Japan – to its unilateral visa-free entry scheme.

Mixed signals from China: Co-operation to hardliners

China has been sending mixed signals to the US since Trump’s victory. During their bilateral meeting on the sidelines of the 31st APEC Meeting in Lima, Peru, on November 16, Chinese President Xi Jinping showed interest in improving bilateral relations with the US.

“China is ready to work with the new US administration to maintain communication, expand the cooperation and manage differences to strive for a steady transition of the China-US relationship,” Xi said.

At the same time, he also stated his country’s limits and hard lines, including its policies on Taiwan, democracy and human rights. Xi warned the US against intervening in the South China Sea.

Will DOGE really matter?

On the domestic front, Democrats and good Government groups are skeptical of how much influence the DOGE will wield.

The commission’s place outside the formal Government structure raises questions about the kind of impact the commission will be able to make. While both Musk and Ramaswamy have put forth some of their ideas for Government reform, including Musk’s pledge to cut $2 trillion from the Federal budget, there is not enough clarity about how the commission will execute this plan.

The hard truth remains that there will be no real restraint or constraint on the commission and the future president, except for the one that may come from within the Republican Party.