Elon Musk has opinions on how a whole lot of the world’s nations must be run.
He has weighed in on elections in Germany on behalf of a far-right occasion, sparred with the federal government of his native South Africa, and known as for the removing of the president of Ukraine, to not point out the two-month siege he has waged in opposition to America’s federal paperwork.
However one nation tends to get a move 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 variety of different points.
From a enterprise perspective, this is smart. China is important to Musk’s automotive firm Tesla as each a producer of automobiles and as a client market. Musk can also be hardly uncommon amongst main world tech CEOs in defending China.
“Musk’s feedback on China aren’t out of the norm for the CEO of a significant Western enterprise,” stated 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 isn’t on Twitter speaking about how terrible USAID is or meddling in European politics.”
Musk’s enterprise pursuits in China and general pro-Beijing attitudes additionally stand out amongst his new colleagues within the Trump administration. Trump’s overseas coverage staff is usually united in its hawkish views on China. Trump himself has accused Beijing up to now 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 conflict, 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 supply Beijing in future negotiations — are getting extra discover in each nations.
Throughout 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 income 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 a whole lot of thousands and thousands of {dollars} in loans from Chinese language banks. It was the corporate’s first manufacturing facility outdoors the US, in addition to the primary wholly foreign-owned automotive firm in China, the place automakers sometimes enter into joint ventures with Chinese language corporations.
It’s now Tesla’s largest manufacturing facility, producing half of the corporate’s vehicles globally final 12 months. Musk has praised staff at his Chinese language manufacturing facility for “burning the three am oil…whereas in America persons are making an attempt to keep away from going to work in any respect.” The comment got here at a time when the manufacturing facility was actually having staff sleep within the manufacturing facility as a consequence of Covid restrictions.
Tesla has additionally benefited from promoting vehicles in China’s fast-growing electrical car market: Gross sales in China rose 8.8 % in 2024, a 12 months through which the corporate’s world 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,’” stated Tu Le, an skilled on the Chinese language automotive 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 supplied him a Chinese language inexperienced card throughout a gathering in 2019.
Due to his real-life Tony Stark picture, Musk has develop into one thing of a popular culture determine in China, as, maybe extra surprisingly, has his mom.
The connection between the Chinese language authorities and Tesla has been mutually helpful, Le advised 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 a neighborhood marketplace for electrical automobiles. That effort labored phenomenally properly: 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 recent 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” know-how. The corporate is presently hampered by guidelines which forestall knowledge from Chinese language drivers from being taken overseas, which Musk says has pressured them to make use of publicly obtainable movies of Chinese language streets to coach their automobiles.
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 comparable know-how totally free on its automobiles.
“China is the linchpin to Tesla’s general long-term technique,” stated 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 function. 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 remedy 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, provided that one other of his corporations, SpaceX, is a significant US army contractor and Musk himself has “high 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 Road Journal, “I’m a fan of Elon Musk and SpaceX, however anybody can 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 Modern Amperex Expertise Co. (CATL), the world’s largest producer of lithium-iron-phosphate batteries, and a significant Tesla provider, to its checklist of “Chinese language army corporations” that produce each civilian and army items. US companies will not be prohibited from doing enterprise with corporations on this checklist, however the checklist is meant to boost reputational and compliance prices.
One other firm on the checklist, the Chinese language web big Tencent, at one level owned a 5 % stake in Tesla, although in response to media reviews, it has since divested its holdings. Tencent is the guardian firm of WeChat, which was as soon as sometimes called “China’s Twitter,” however has since develop into an all-encompassing app used for all kinds of funds and communication. Musk has cited WeChat as a mannequin for the “every thing app” he wish to construct X into.
The true extent of Musk’s hyperlinks to Chinese language corporations will not be totally recognized. The Monetary Instances reported that Chinese language buyers have been funneling tens of thousands and thousands of {dollars} into Musk’s private corporations, like SpaceX, Neuralink, and xAI, utilizing opaque possession constructions that protect buyers’ identities.
China’s man on the within?
Why does any of this matter? Musk’s affect could 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 finally handed with out the supply, with Rep. Jim McGovern (D-MA) accusing Home Republicans of caving as a result of “Elon had an issue.”
Consultants 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 guardian firm ByteDance.
In February, the Monetary Instances reported that Chinese language officers have 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 solution to bypass Rubio, a solution to bypass [national security adviser Michael] Waltz, a solution 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, advised 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 immediately however agreed that “they’re going to make use of each little bit of leverage they will.”
On paper, a nationwide safety staff that features Rubio and Waltz reporting to Trump looks like a China hawk’s dream. And in some respects, reminiscent of 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 growing nations to cut 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 function within the world 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 nations have earned Trump’s ire greater than China, not less than to this point.)
Trump additionally backed off a transfer to shut a tax loophole utilized by Chinese language quick style manufacturers like Temu and Shein to ship to america, 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 help 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 remedy of Ukraine, have forged doubt on whether or not the administration would intervene to defend Taiwan within the occasion of a Chinese language invasion.
Musk has stated up to now that it could 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 advised Vox his authorities was in search of various satellite tv for pc providers to SpaceX as a result of Musk “might lower the service [over] his private opinion, so we don’t suppose this was a trustable accomplice.”
Musk has spoken out in opposition to tariffs up to now, and Tesla has warned it might 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 this point could damage Musk’s opponents 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’t think about the Trump administration really being totally hawkish on China, till Musk significantly recedes from the scene,” stated Stone Fish.
The administration’s China coverage, on each the financial and nationwide safety fronts, remains to be considerably of a piece in progress, and the hawks should have their manner, as they typically did throughout Trump’s first time period. A check could are available June when, in response to 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 seemingly hoping Musk will not less than be close by.
