China, as an economic superpower, has cultivated strong ties with both the Global South and Europe, which is a strategic alignment that could mitigate the effects of the "Trump shock," according to former Greek Finance Minister Yanis Varoufakis.
At the Qatar Economic Forum held in Doha from Tuesday to Thursday, Varoufakis compared a series of economic policies implemented by the Trump administration to the financial and trade policies of then U.S. President Richard Nixon in 1971.
"Donald Trump and his team -- not so much the gentleman himself -- the Trumpian economic team -- people like Scott Bessent, Stephen Miller, Katz and others -- they are attempting to blow up the monetary system as it is, and the trading system, in the same way that Richard Nixon blew it up in 1971. That was the 'Nixon shock.' Now they are trying to implement a 'Trump shock.' Now whether they will succeed or not is another business, but they have a very clear plan, which is very destabilizing for the rest of the world. But for them, it's essential for maintaining American hegemony," Varoufakis said.
However, U.S. manufacturing continues to shrink amid widening deficits, both budgetary and trade-related, even as the Trump administration attempts to address these issues, Varoufakis noted.
At the same time, the official emphasized that while China's economic influence was not significant during the era of the "Nixon shock," today's China has emerged as a vibrant economy and the engine of growth for developing countries.
"The major difference between 1971, Richard Nixon, the 'Nixon shock,' and today, the 'Trump shock,' is China. Back then, there was no China. Now China is a gigantic superpower -- a country that has managed to create interconnections with the rest of the Global South, and not only the Global South -- Europe as well. And they will resist the 'Trump shock,'" Varoufakis said.
"Now you have China, which is not a stagnant bloc, but it is a very dynamic bloc -- based on capital accumulation, based on innovation of technologies that are surpassing even those of the United States -- and capable of doing what the Soviet Union never did, which is to be a source of growth for the developing countries," he added.
China's strong ties with Global South, Europe buffer against "Trump shock": official
