The iconic Welshman has seen Jose Mourinho bolster his ranks at Old Trafford, with £40 million midfielder Nemanja Matic the latest addition for the Red Devils.
City, though, have also been busy during the summer window, with big-money deals done for the likes of Bernardo Silva, Benjamin Mendy, Kyle Walker, Ederson and Danilo.
Giggs feels that Pep Guardiola now has “scary” options at his disposal, with the likes of Chelsea and Tottenham playing catch-up as they prepare to juggle the demands of domestic and European competition.
He told Sky Sports: “I think Manchester City are the team to beat.
“I looked at them towards the end of last season and the forward players they've got is scary, with Sergio Aguero, Gabriel Jesus, Leroy Sane, Kevin De Bruyne, David Silva and Raheem Sterling.
“What they needed to get right was their defence and it will be interesting to see how Ederson settles in, because you don't win the Premier League with an average goalkeeper.
“They've obviously invested heavily on full-backs but the question is still whether Vincent Kompany can stay fit because his influence and experience are key for them.
“You can't ignore Chelsea because of their quality, but have they got the squad to balance defending the Premier League and European football? I'm not sure.
“Tottenham have a really exciting squad and a great manager in Mauricio Pochettino, but everybody is asking whether they can continue to match sides without signings.”
Spurs have yet to make a single addition to their squad, while watching many of their title rivals spend well over £100m on fresh faces.
Chelsea have added, but may need even greater depth as they prepare for a return to Champions League competition.
There is still a month remaining for clubs to strengthen, with the window not due to slam shut until August 31.