Elon Musk has opinions on how plenty of the world’s international locations needs to 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 referred to as for the removing of the president of Ukraine, to not point out the two-month siege he has waged towards America’s federal forms.
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 sensible. China is significant to Musk’s automotive firm Tesla as each a producer of automobiles and as a shopper market. Musk can 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 targeted on the dangers of doing enterprise in China. “The excellence is that [Apple CEO] Tim Cook 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 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 warfare, 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 firms will probably be a precedence for the administration. This raises questions on whether or not the pursuits of these firms 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 nearly can’t be overstated. In 2019, the corporate opened its Shanghai “gigafactory” with tons of of hundreds of thousands of {dollars} in loans from Chinese language banks. It was the corporate’s first manufacturing unit exterior 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 firms.
It’s now Tesla’s largest manufacturing unit, producing half of the corporate’s automobiles globally final 12 months. Musk has praised employees at his Chinese language manufacturing unit for “burning the three am oil…whereas in America persons are attempting 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 automobiles in China’s fast-growing electrical car market: Gross sales in China rose 8.8 % in 2024, a 12 months by 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 necessary market and the one market that’s persevering with to develop,’” mentioned Tu Le, an skilled on the Chinese language automotive market and director of the market analysis agency Sino Auto Insights.
Alongside the best way, 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 grow to be 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 useful, Le informed Vox. The corporate’s funding in China got here at a time when the Chinese language authorities was attempting to spur the creation of a neighborhood marketplace for electrical automobiles. That effort labored phenomenally properly: greater than half of automobiles bought in China now include the distinctive inexperienced license plates marking them as EVs, and China accounted for greater than 60 % 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 major 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 at the moment pushing to win approval from Chinese language regulators for Tesla’s “full self-driving” know-how. The corporate is at the moment hampered by guidelines which forestall information from Chinese language drivers from being taken in another country, which Musk says has pressured them to make use of publicly out there 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 nearly $9,000, whereas BYD is providing comparable know-how totally free on its automobiles.
“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 Compelled Labor Prevention Act, who described the showroom on Twitter for example of “Nationless companies … serving to the Chinese language Communist Celebration cowl up genocide and slave labor.”
Musk’s China ties have additionally raised safety issues, provided that one other of his firms, SpaceX, is a significant US navy 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 could be involved if there are monetary entanglements with China.”
A number of firms 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 navy firms” that produce each civilian and navy items. US companies should not prohibited from doing enterprise with firms on this checklist, however the checklist is meant to boost reputational and compliance prices.
One other firm on the checklist, the Chinese language web large Tencent, at one level owned a 5 % stake in Tesla, although in line with media stories, it has since divested its holdings. Tencent is the guardian firm of WeChat, which was as soon as also known as “China’s Twitter,” however has since grow to be an all-encompassing app used for all kinds of funds and communication. Musk has cited WeChat as a mannequin for the “the whole lot app” he wish to construct X into.
The true extent of Musk’s hyperlinks to Chinese language firms might not be totally identified. The Monetary Instances reported that Chinese language buyers have been funneling tens of hundreds of thousands of {dollars} into Musk’s private firms, like SpaceX, Neuralink, and xAI, utilizing opaque possession buildings 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 manage 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 issues 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 method to bypass Rubio, a method to bypass [national security adviser Michael] Waltz, a method to bypass these whom they see to be much less pleasant to them on their points, they usually’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, informed 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’ll.”
On paper, a nationwide safety crew that features Rubio and Waltz reporting to Trump looks as if 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 strain different growing 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, at the very least to date.)
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 the US, and regardless of having as soon as referred to 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 up to now that it might 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 informed Vox his authorities was in search of different 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 towards tariffs up to now, 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 could harm Musk’s opponents greater than they harm him.
Nonetheless, if US-China commerce relations deteriorate additional, to not point out the form of “decoupling” Rubio advocated as a senator, it’s arduous 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 truly being totally hawkish on China, till Musk enormously recedes from the scene,” mentioned 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 still have their method, as they usually did throughout Trump’s first time period. A check could are available in June when, in line with stories, a Trump-Xi summit is within the works, maybe paving the best way for formal commerce talks.
If he’s not within the room, Chinese language leaders are probably hoping Musk will at the very least be close by.
