China's biggest Trump 2.0 threat would be changes led by Elon Musk, adviser warns
South China Morning Post
4 min read
China's biggest risk during Donald Trump's second term as president would be US government overhauls driven by tech billionaire Elon Musk, a leading Chinese political scientist and policy adviser to Beijing has warned.
As a countermeasure, China should expand unilateral opening-up measures towards countries including the United States, Zheng Yongnian, dean of the School of Public Policy at the Chinese University of Hong Kong's Shenzhen campus, said on Saturday.
The principle of "who is more open than whom" was key to gaining leverage in the US-China rivalry, Zheng told the Baichuan Forum hosted by the university's Institute for International Affairs (IIA).
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China's economy and trade were likely to face "significant shocks" in the short term after Trump returned to the White House, but geopolitical pressures might ease, Zheng said.
Zheng Yongnian says Donald Trump may damage bilateral ties with tariffs but "he does not actually want to go to war with China". Photo: CUHK-Shenzhen alt=Zheng Yongnian says Donald Trump may damage bilateral ties with tariffs but "he does not actually want to go to war with China". Photo: CUHK-Shenzhen>
Trump's expected wielding of the "tariff stick" against China under his "America First" policy approach would not only "maximally" damage bilateral relations but also sabotage the international trade system, he added.
However, geopolitics is more a "tool" for Trump, according to Zheng, even though he expects him to continue to ramp up tensions around the South China Sea and the Taiwan Strait.
"He does not actually want to go to war with China," Zheng, who is also president of the IIA, said. China's rapidly growing defence capabilities also made it better able to manage the related geopolitical risks, he added.
"In the medium to long term, the greatest pressure on China may come from changes within the US," he said.
If Trump succeeded in his efforts to overhaul the government, the US would "develop a new, more competitive system", Zheng said, calling it a form of "state capitalism with American characteristics".
"I personally think we should not underestimate the institutional reforms prioritised by figures like Musk," he warned.
Musk, the world's richest man and Trump's pick for "efficiency tsar", has already outlined plans to cut government spending and staffing.
"A more efficient US political system would put huge pressure on China's current system," Zheng said. "Of course, the pressure is not exclusive to China but also others, especially Europe."
Musk, who co-founded and leads Tesla and SpaceX, and Vivek Ramaswamy, a former US entrepreneur and Republican presidential hopeful, have been named by Trump to lead a new "department of government efficiency" when the president-elect takes office in January.
Plans unveiled by the businessman duo this week aim to scrap "thousands of regulations" and reduce the size of the government workforce.
"Fully tapping into internal growth potential is something we must do" in response to changes in the global environment, Zheng said.
Zheng expects China to speed up institutional reform to support the domestic market under its "dual circulation" strategy, which also seeks to reduce reliance on the West, as well as set up a unified national market.
He said China should speed up its pace of opening up, particularly unilaterally, to counter US efforts to form two parallel trade systems centred around either country.
In the latest such move, China on Friday added nine more countries including Japan to its unilateral visa-free entry scheme, taking the total to 38.
At the Apec Economic Leaders' Meeting in Peru last week, Chinese President Xi Jinping reaffirmed Beijing's commitment to promote "high-standard opening up".
According to Zheng, the "Trump administration's ability to disrupt the global trade system" must not be underestimated. "But even more so, we should not underestimate China's ability to reshape the global trade system through our opening-up policies."
He also called for extending the unilateral openness to include US capital and citizens. "In this way, those truly isolated" would be the hardliners, cold war advocates and anti-China factions in the US, he said.
"Although competition between China and the US is inevitable, we don't have to be too afraid. But the core of the competition, we have to realise, is who is more open than whom," he said.
"The ultimate winner will undoubtedly be [the side that is] more open," he added. "I believe we will certainly outperform the US."
