The 'Trump shock' and a bifurcated world: Why China's leadership matters more than ever

Bt Abhishek G Bhaya

As the world edges closer to what could be a seismic geopolitical transformation, renowned economist and former Greek Finance Minister Yanis Varoufakis's stark warning at the recent Qatar Economic Forum 2025 should prompt deep reflection – particularly for the Global South.

According to Varoufakis, we are staring down a new kind of geopolitical rupture – what he calls the "Donald Trump shock" – that could shatter the post-war international monetary and trade systems, not unlike what the Richard Nixon administration did in 1971.

"They are attempting something quite spectacular," Varoufakis said. "In the same way that Richard Nixon blew up the monetary system in 1971 – what was then called the 'Nixon shock' – we now have the Trump team implementing a 'Trump shock' that is very destabilizing for the rest of the world, but essential for maintaining American hegemony."

Unlike in the 1970s, however, the United States no longer holds the same dominant position on the global stage –and that changes everything. The most important difference, Varoufakis pointed out, is China.

"Now China is a gigantic superpower, deeply interconnected not just with the Global South but also Europe," he said.

This changing multipolar landscape is increasingly dividing the global economy.

An emerging vision for the Global South

Varoufakis views this shift as a historic correction. For him, China is not only a strategic counterbalance to American volatility, but also a source of innovation, investment, and infrastructural development for much of the developing world.

"This is not a repeat of the Cold War. China is dynamic, innovative, and increasingly a source of growth for the developing world," he explained.

This contrast couldn't be clearer today. As Washington doubles down on a confrontational strategy and weaponizes trade, finance, and technology to retain global supremacy, China has emerged as a stabilizing force through deep connectivity and mutually beneficial partnerships.

From Africa to Latin America, and increasingly in West Asia, China's infrastructure projects, digital cooperation, and trade agreements are building new avenues for self-determination. These are not alliances of dependence but of shared strategic interests – something that the Global South has long yearned for.

Europe: The forgotten patient

And what of Europe? Sadly, in Varoufakis's view, the continent is becoming collateral damage in this great power game. "Europe is the greatest patient," he said. "(That continent) is dying. It's stagnating. We failed to invest for 15 years, and now political fragmentation and fiscal crises are inevitable."

Rather than crafting an independent policy aligned with global realities, European leaders appear caught in a web of Atlanticist nostalgia, even as their own citizens grow weary of economic stagnation and endless austerity. This leaves the continent vulnerable not just economically, but geopolitically.

China's approach to Europe has been pragmatic and patient. While Washington pressures allies into blocs and enmities, Beijing has largely kept the door open for cooperation on trade, investment, and climate, offering a vision of multipolarity that doesn't force Europe to pick a side.

'Techno-feudalism' and digital sovereignty

Another key point Varoufakis raised, and one that resonates deeply with many in the Global South, is the challenge of digital colonialism. He warned against the rise of what he calls "techno-feudalism" – a socioeconomic order where cloud infrastructure and AI systems are monopolized by a few Western tech giants who extract rents and manipulate choices globally.

"We have a new form of capital – cloud capital – which trains us to train it so that it can manipulate our decisions and maximize rents for its owners. This is not capitalism. It's not socialism. It's techno-feudalism," Varoufakis warned.

In this regard too, China presents a compelling model. Its strategic focus on developing homegrown AI platforms, digital payment systems, and cloud infrastructure has enabled it to resist becoming a mere client state of Silicon Valley – a fate Varoufakis fears may befall many smaller nations.

"Chinese startups, such as DeepSeek, have shown us that innovation can be done with limited resources – but it requires political will," he said.

Call for non-alignment

For countries in the Arab world and beyond, Varoufakis had a critical message: Don't fall into the trap of false binaries. He advises countries to collaborate with both the U.S. and China.

This is, in essence, a call for agency – a recognition that the Global South must shape its own destiny, and that in doing so, China's partnership could prove transformative.

Asked to reflect on the state of global discourse, Varoufakis offered this final thought: "Thankfully, the West is no longer the center of attraction for interesting conversations."

That statement may sound provocative, but it is also true. Today, the world's most important discussions – about fairness, sovereignty, digital futures, and alternative growth models – are increasingly happening outside Washington, London, or Brussels.

They are happening in Doha, in Johannesburg, in Istanbul – and yes, in Beijing.

The "Trump shock" may well upend the old order, but if the emerging multipolar world is guided by principles of sovereignty, cooperation, and innovation – with China playing a central role – then perhaps it is not a crisis, but a long-overdue correction.

Abhishek G Bhaya, a special commentator on current affairs for CGTN, is a senior journalist and international affairs commentator.