City have built a team out of oil money
They have but they've used their resources much smarter since Pep is there. They've spent 500M over the last two years to rejuvenate the team and improve overall depth. Yes, they've overpaid for most players but that's expected when everyone know they have money. They also whiffed on some signings like Bravo and Nolito (thought they were both pretty cheap in todays world) but at the same time they got 7 potential new longterm starters (Ederson, Walker, Laporte, Stones, Sane, G. Jesus and Mendy would also be a starter if he'd be healthy). From the most used players only D.Silva, Fernandinho, Aguero, Otamendi, KDB and Sterling have stayed from the old guard though the last two were most likely brought in 2015 with the knowledge that Pep will join next season. So while it's true they've spend a lot they have also made the right signings in most cases and they won't really have to spend much in coming years. I think Fred is already a done deal and he'll eventually take over from Fernandinho and B.Silva could be a replacement for D.Silva. Then they'll only need to improve bench once some of the older guys will leave but their first XI will be pretty much set for the next 3-5 years.
On the other hand PSG have used 400M on just two players and they still have big holes at LB and DM and could also use an improvement at RB (Alves is just getting old) and GK. Their bench is also nowhere near good enough after so much money spent so I prefer City's approach/project between both oil clubs.