Elon Musk has opinions on how loads of the world’s international locations ought to be run.
He has weighed in on elections in Germany on behalf of a far-right celebration, sparred with the federal government of his native South Africa, and known as for the elimination of the president of Ukraine, to not point out the two-month siege he has waged towards America’s federal paperwork.
However one nation tends to get a cross from the world’s richest man. He’s, in his personal phrases, “type of pro-China.” The self-proclaimed “free-speech absolutist” has not utilized that place to China’s draconian censorship regime, and Musk has defended the Chinese language authorities’s positions on a spread of different points.
From a enterprise perspective, this is smart. China is important to Musk’s automobile firm Tesla as each a producer of autos and as a client market. Musk can also be hardly uncommon amongst main international tech CEOs in defending China.
“Musk’s feedback on China aren’t out of the norm for the CEO of a significant Western enterprise,” mentioned Isaac Stone Fish, CEO of Technique Dangers, a consultancy centered on the dangers of doing enterprise in China. “The excellence is that (Apple CEO) Tim Prepare dinner is just not on Twitter speaking about how terrible USAID is or meddling in European politics.”
Musk’s enterprise pursuits in China and total pro-Beijing attitudes additionally stand out amongst his new colleagues within the Trump administration. Trump’s overseas coverage crew is mostly united in its hawkish views on China. Trump himself has accused Beijing previously of a coverage to “rape our nation” and blamed it for the Covid pandemic, together with a bunch of different ills.
Because the US and China seem like hurtling headlong right into a commerce struggle, and at the same time as Trump seeks a gathering with China’s Xi Jinping in hopes of hammering out a brand new commerce deal, Musk’s ties to China — and the potential leverage they may provide Beijing in future negotiations — are getting extra discover in each international locations.
Through the current quasi-infomercial on the White Home garden, throughout which Trump bought a Tesla and made a gross sales pitch for the slumping firm, the president made clear that the earnings of Musk’s corporations can be a precedence for the administration. This raises questions on whether or not the pursuits of these corporations will come into play because the administration shapes its insurance policies towards its fellow superpower.
China and Tesla want one another
The symbiotic relationship between Tesla and China virtually can’t be overstated. In 2019, the corporate opened its Shanghai “gigafactory” with lots of of tens of millions of {dollars} in loans from Chinese language banks. It was the corporate’s first manufacturing unit outdoors the US, in addition to the primary wholly foreign-owned automobile firm in China, the place automakers sometimes enter into joint ventures with Chinese language corporations.
It’s now Tesla’s largest manufacturing unit, producing half of the corporate’s vehicles globally final 12 months. Musk has praised employees at his Chinese language manufacturing unit for “burning the three am oil…whereas in America individuals are making an attempt to keep away from going to work in any respect.” The comment got here at a time when the manufacturing unit was actually having employees sleep within the manufacturing unit attributable to Covid restrictions.
Tesla has additionally benefited from promoting vehicles in China’s fast-growing electrical automobile market: Gross sales in China rose 8.8 % in 2024, a 12 months during which the corporate’s international gross sales fell for the primary time. (Tesla didn’t reply to a request for remark.)
“It’s their second most essential market and the one market that’s persevering with to develop,’” mentioned Tu Le, an professional on the Chinese language automobile market and director of the market analysis agency Sino Auto Insights.
Alongside the way in which, Musk has developed relationships with senior Chinese language leaders, notably Premier Li Qiang, China’s No. 2 official, who reportedly provided him a Chinese language inexperienced card throughout a gathering in 2019.
Due to his real-life Tony Stark picture, Musk has turn out to be one thing of a popular culture determine in China, as, maybe extra surprisingly, has his mom.
Elon Musk books displayed in the course of the Shanghai E book Truthful 2024 in Shanghai, China. Ying Tang/NurPhoto through Getty Photos
The connection between the Chinese language authorities and Tesla has been mutually helpful, Le instructed Vox. The corporate’s funding in China got here at a time when the Chinese language authorities was making an attempt to spur the creation of an area marketplace for electrical autos. That effort labored phenomenally effectively: greater than half of vehicles bought in China now include the distinctive inexperienced license plates marking them as EVs, and China accounted for greater than 60 percent of EV gross sales globally final 12 months.
This has additionally led to an explosion of latest home Chinese language EV producers, together with Tesla’s main competitor BYD, an organization which Musk as soon as actually laughed at however which now outsells Tesla globally.
Tesla retains some cachet as a premium model, Le says, however even in China, its gross sales are beginning to slip. Musk is presently pushing to win approval from Chinese language regulators for Tesla’s “full self-driving” expertise. The corporate is presently hampered by guidelines which stop knowledge from Chinese language drivers from being taken overseas, which Musk says has compelled them to make use of publicly out there movies of Chinese language streets to coach their autos.
Tesla final month rolled out a partial self-driving mode on its Chinese language fashions, although it prices virtually $9,000, whereas BYD is providing related expertise without spending a dime on its autos.
“China is the linchpin to Tesla’s total long-term technique,” mentioned Le.
Musk’s China ties are deeper than Tesla
Musk’s actions in China had attracted controversy even earlier than he took on his new political position. In 2022, Tesla was blasted by human rights teams and lawmakers for opening a showroom in China’s Xinjiang area, the place the federal government’s therapy of ethnic Uyghur Muslims had been described as a genocide by each the Trump and Biden administrations.
The critics included then-senator, now Secretary of State Marco Rubio, sponsor of that 12 months’s Uyghur Pressured Labor Prevention Act, who described the showroom on Twitter for example of “Nationless companies … serving to the Chinese language Communist Social gathering cowl up genocide and slave labor.”
Musk’s China ties have additionally raised safety considerations, on condition that one other of his corporations, SpaceX, is a significant US army contractor and Musk himself has “prime secret” safety clearance. In 2022, Rep. Chris Stewart (R-UT) pushed for closed-door intelligence briefings on Capitol Hill to find out whether or not SpaceX had any hyperlinks to the Chinese language authorities, telling the Wall Avenue Journal, “I’m a fan of Elon Musk and SpaceX, however anybody could be involved if there are monetary entanglements with China.”
A number of corporations with hyperlinks to Musk’s companies have additionally been focused by the US authorities. In January, the Pentagon added Up to date Amperex Know-how Co. (CATL), the world’s largest producer of lithium-iron-phosphate batteries, and a significant Tesla provider, to its record of “Chinese language army corporations” that produce each civilian and army items. US corporations aren’t prohibited from doing enterprise with corporations on this record, however the record is meant to lift reputational and compliance prices.
One other firm on the record, the Chinese language web big Tencent, at one level owned a 5 % stake in Tesla, although in line with media reviews, it has since divested its holdings. Tencent is the mother or father firm of WeChat, which was as soon as sometimes called “China’s Twitter,” however has since turn out to be an all-encompassing app used for all kinds of funds and communication. Musk has cited WeChat as a mannequin for the “every part app” he want to construct X into.
The true extent of Musk’s hyperlinks to Chinese language corporations will not be absolutely identified. The Monetary Instances reported that Chinese language buyers have been funneling tens of tens of millions of {dollars} into Musk’s personal corporations, like SpaceX, Neuralink, and xAI, utilizing opaque possession constructions that defend buyers’ identities.
China’s man on the within?
Why does any of this matter? Musk’s affect might already be serving to to form US coverage towards China. On the finish of final 12 months, he publicly opposed a bipartisan spending invoice that included measures to control US investments in China. A stopgap invoice was ultimately handed with out the supply, with Rep. Jim McGovern (D-MA) accusing Home Republicans of caving as a result of “Elon had an issue.”
Specialists say Chinese language leaders are hoping to leverage their connections to the DOGE boss to affect the administration’s insurance policies. Chinese language Vice President Han Zheng met with Musk on the eve of Trump’s inauguration. TikTok CEO Shou Chew has additionally been in communication with Musk, viewing him as a conduit to the White Home as the corporate tries to navigate considerations about its Chinese language mother or father firm ByteDance.
In February, the Monetary Instances reported that Chinese language officers had been contemplating utilizing Tesla’s query for approval for self-driving as a bargaining chip in commerce negotiations with the Trump administration.
“They completely see him as an asset to them in any type of negotiations, a approach to bypass Rubio, a approach to bypass (nationwide safety adviser Michael) Waltz, a approach to bypass these whom they see to be much less pleasant to them on their points, and so they’re going to make use of him as a conduit,” Rep. Raja Krishnamoorthi (D-IL), rating member of the Home Choose Committee on the CCP, instructed Vox at a current occasion in Washington. (The White Home’s Nationwide Safety Council didn’t reply to a request for remark.)
The committee’s chair, Rep. John Moolenaar (R-MI) didn’t criticize Musk straight however agreed that “they’re going to make use of each little bit of leverage they will.”
On paper, a nationwide safety crew that features Rubio and Waltz reporting to Trump looks like a China hawk’s dream. And in some respects, equivalent to Rubio’s push to maintain Chinese language financial pursuits out of the Panama Canal, it has been. Chinese language officers are reportedly involved that the Trump administration will use tariffs to stress different creating international locations to scale back their ties with Beijing.
However in lots of respects, the administration has been much less hawkish than many anticipated. It’s true that Trump has slapped 20 % tariffs on Chinese language items, ostensibly over China’s position within the international fentanyl commerce, although these are lower than the 60 % tariffs he proposed on the marketing campaign path, or the 25 % tariffs he has now slapped on Mexico and Canada. (Canada and European international locations have earned Trump’s ire greater than China, no less than to date.)
Trump additionally backed off a transfer to shut a tax loophole utilized by Chinese language quick trend manufacturers like Temu and Shein to ship to the USA, and regardless of having as soon as known as for the banning of TikTok, his administration seems to be in no hurry to implement the ban on the app handed by Congress final 12 months.
Trump’s overseas support cuts have dealt a blow to dozens of nonprofits monitoring corruption and human rights abuses in China, in addition to Tibet’s authorities in exile. Statements by Trump and a few of his senior officers, in addition to the administration’s therapy of Ukraine, have solid doubt on whether or not the administration would intervene to defend Taiwan within the occasion of a Chinese language invasion.
Musk has mentioned previously that it will make sense for Taiwan to be a “particular administrative zone” inside China. In an interview in Taipei final fall, Taiwan’s deputy minister of digital affairs instructed Vox his authorities was in search of different satellite tv for pc providers to SpaceX as a result of Musk “may lower the service (over) his private opinion, so we don’t assume this was a trustable companion.”
Musk has spoken out towards tariffs previously, and Tesla has warned it may very well be uncovered to retaliatory tariffs from different governments, however as a result of Tesla has constructed comparatively self-sufficient provide chains inside each the US and China, the measures introduced by Trump to date might damage Musk’s rivals greater than they damage him.
Nonetheless, if US-China commerce relations deteriorate additional, to not point out the form of “decoupling” Rubio advocated as a senator, it’s onerous to think about Musk’s backside line gained’t be affected, or that he gained’t have one thing to say about it.
“I can not think about the Trump administration really being absolutely hawkish on China, till Musk tremendously recedes from the scene,” mentioned Stone Fish.
The administration’s China coverage, on each the financial and nationwide safety fronts, continues to be considerably of a piece in progress, and the hawks should have their means, as they typically did throughout Trump’s first time period. A check might are available June when, in line with reviews, a Trump-Xi summit is within the works, maybe paving the way in which for formal commerce talks.
If he’s not within the room, Chinese language leaders are possible hoping Musk will no less than be close by.
