Posted on Saturday, January 18, 2025

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by Ben Solis

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With China’s economy faltering and Beijing losing ground in the ongoing great power competition with the United States, Trump’s creation of the Department of Government Efficiency (DOGE) is a looming disaster for President Xi Jinping and the Chinese Communist Party.

While most Americans will joyously celebrate President-elect Donald Trump’s inauguration on January 20, the mood will be far more somber halfway around the world in China. After four years in which Beijing was able to take advantage of Joe Biden, Trump’s return means the free ride is over.

“Beijing has ruthlessly exploited the naivety and perhaps even kindness of the Biden administration over the last four years,” said Jiao-long Luli, a former economics professor who defected from China. “But Beijing also knows this shift is inevitable.”

Higher tariffs and tougher trade policies expected under Trump mean traffic from Chinese ports will wane. The once-roaring Chinese economy, which has grown at a breakneck pace for decades, is now showing vulnerability. A recent analysis from HSBC Bank reveals that China has experienced the slowest per capita economic growth in the Indo-Pacific over the past two years, with little hope for a significant recovery soon. Falling prices, weak consumer spending, and a housing market crash have put the world’s second-largest economy in a precarious spot.

But it is not just Trump’s trade and tariff policies that should worry Chinese leaders. DOGE, while focused on reducing bureaucracy and making government more efficient in the United States, likewise presents a significant threat to the Chinese Communist Party (CCP) within the larger context of the ongoing rivalry between the two countries. As another Chinese defector, Professor Shu Chen Xing put it, DOGE will “loom over CCP leadership like the Sword of Damocles.”

One critical dynamic of the competition between China and the United States that is often forgotten is the vast population disparity between the two nations. While China is indeed facing a population decline owing to decades of ill-advised policy, its population of 1.411 billion is still well over four times that of the United States. Given this context, it is somewhat astonishing that the U.S. has a GDP roughly $10 trillion higher than China – although that gap continues to close.

China’s significant population advantage means the United States must remain exponentially more efficient and productive to stay ahead. In fact, on a per-capita basis, Americans must on average be more than four times as productive as their Chinese counterparts just to keep up.

What Trump (and Elon Musk and Vivek Ramaswamy, the two men tapped to lead DOGE) recognize is that bureaucracy and government red tape are the enemies of efficiency and productivity. If the United States were to fall behind China, bureaucratic bloat would be largely to blame.

It is for this reason that Chinese leaders fear DOGE. Anything that makes the U.S. government more efficient also makes the U.S. economy more efficient and by default gives the country an added edge against China.

Worse for the CCP, they have no answer to DOGE, because their socialist model is built on bureaucracy. For the communists, endless layers of bureaucracy are as vital as the cardiovascular system is for a person. During a meeting in December, Xi Jinping reportedly demanded a “comprehensive response” to DOGE from top party strategists. But as they explained to him, creating a Chinese version of DOGE would mean dismantling the CCP itself.

While Americans rightly lament the complexity and unaccountability of bureaucracy in their country, the Chinese state is entirely defined by bureaucracy to an extent almost unimaginable in the United States. For instance, the Chinese Foreign Ministry, itself an enormous bureaucracy, is overseen by the Foreign Department of the Chinese Communist Party, which employs four times as many officials as the Foreign Ministry. Party bureaucracies control healthcare institutions, shops, schools, state offices, and companies.

This bureaucratic morass incurs enormous costs and paralyzes life inside China, yet it is essential to secure the power of the CCP – and Xi Jinping. Every business project, from industrial development to real estate speculation, must undergo regulatory and quality control processes that include being tested against “Xi Jinping Thought,” the Chinese president’s interpretation of communist doctrine.

“Priority projects related to immediate defense needs are the exception; the rest take years and even decades to implement,” explained Professor Luli. On average, industrial projects require 5 to 11 years of office preparation, while legal and financial projects may take less time.

Recognizing the importance of the communist bureaucracy to maintaining control over the population, the CCP has urgently censored news and discussion about DOGE inside China. Two Chinese economists I spoke with stated that the very concept of DOGE is a threat to the CCP’s power. “If the Chinese people demand DOGE, the Party will face the threat of collapse like the USSR saw in 1989,” Professor Luli said.

Americans are eagerly anticipating how DOGE might finally address the malignant growth of government bureaucracy hampering economic growth and innovation in their own country. But the most consequential impact of the new agency could well be how it positions the United States to compete with China in the years and decades to come.

Ben Solis is the pen name of an international affairs journalist, historian, and researcher.