Elon Musk has opinions on how a number of the world’s international locations needs to be run.
He has weighed in on elections in Germany on behalf of a far-right get together, 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 towards America’s federal paperwork.
However one nation tends to get a move from the world’s richest man. He’s, in his personal phrases, “sort 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 autos and as a shopper 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,” 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 international coverage workforce is usually united in its hawkish views on China. Trump himself has accused Beijing prior 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 look like hurtling headlong right into a commerce conflict, and whilst 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.
This week, a number of media shops reported, citing US officers, that Musk was on account of be briefed on the US navy’s labeled plans for a conflict with China — uncommon for any civilian exterior the navy chain of command, a lot much less one with in depth industrial ties to the adversary in query. Secretary of Protection Pete Hegseth denied that the assembly would concern conflict plans and Musk described the report as “maliciously false info.
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 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 nearly can’t be overstated. In 2019, the corporate opened its Shanghai “gigafactory” with lots of of thousands and thousands of {dollars} in loans from Chinese language banks. It was the corporate’s first manufacturing facility exterior the US, in addition to the primary wholly foreign-owned automotive firm in China, the place automakers usually enter into joint ventures with Chinese language corporations.
It’s now Tesla’s largest manufacturing facility, producing half of the corporate’s automobiles globally final 12 months. Musk has praised employees at his Chinese language manufacturing facility for “burning the three am oil…whereas in America individuals are attempting to keep away from going to work in any respect.” The comment got here at a time when the manufacturing facility was actually having employees sleep within the manufacturing facility on account of 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 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 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 turn 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 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 an area marketplace for electrical autos. That effort labored phenomenally properly: Greater than half of automobiles bought in China now include 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 major competitor BYD, an organization that 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 that stop knowledge from Chinese language drivers from being taken in a foreign country, 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 nearly $9,000, whereas BYD is providing comparable expertise free of charge on its autos.
“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 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 instance of “Nationless companies … serving to the Chinese language Communist Get together cowl up genocide and slave labor.”
Musk’s China ties have additionally raised safety issues, on condition that one other of his corporations, 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 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 Up to date Amperex Expertise Co. (CATL), the world’s largest producer of lithium-iron-phosphate batteries, and a significant Tesla provider, to its record of “Chinese language navy corporations” that produce each civilian and navy items. US corporations will not be prohibited from doing enterprise with corporations on this record, however the record is meant to boost reputational and compliance prices.
One other firm on the record, the Chinese language web large Tencent, at one level owned a 5 % stake in Tesla, although in line with media studies, it has since divested its holdings. Tencent is the father or mother firm of WeChat, which was as soon as also known as “China’s Twitter,” however has since turn into 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 want to construct X into.
The true extent of Musk’s hyperlinks to Chinese language corporations might not be absolutely recognized. The Monetary Occasions reported that Chinese language buyers have been funneling tens of thousands and thousands 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 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 issues about its Chinese language father or mother firm ByteDance.
In February, the Monetary Occasions reported that Chinese language officers had been contemplating utilizing Tesla’s quest 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 sort of negotiations, a option to bypass Rubio, a option to bypass [national security adviser Michael] Waltz, a option 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, 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 instantly however agreed that “they’re going to make use of each little bit of leverage they’ll.”
On paper, a nationwide safety workforce that features Rubio and Waltz reporting to Trump looks as if a China hawk’s dream. And in some respects, resembling 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 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, a minimum of 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 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 international 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 therapy 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 prior 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 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 assume this was a trustable accomplice.”
Musk has spoken out towards tariffs prior to now, and Tesla has warned it could possibly 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 rivals 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 really being absolutely hawkish on China, till Musk tremendously recedes from the scene,” stated Stone Fish.
Musk’s views on China and Taiwan, his financial hyperlinks to Beijing, and the truth that SpaceX has reportedly denied Starlink satellite tv for pc service to Ukraine at numerous factors within the conflict are prone to be reexamined once more amid studies that Musk is being learn in on Pentagon plans. The New York Occasions speculated that Musk’s briefing could also be to make sure that no matter cuts Musk’s Division of Authorities Effectivity plans to make on the Pentagon don’t have an effect on US readiness for a battle in China, which has been one of many overriding priorities of US protection planning for years. In keeping with the Wall Road Journal’s sources, Musk is receiving the briefing as a result of he “requested for one.”
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 still have their means, as they typically did throughout Trump’s first time period. A take a look at could are available in June when, in line with studies, 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 possible hoping Musk will a minimum of be close by.
Replace, March 21, 11:30 am ET: This story was initially printed on March 18 and has been up to date with new studies that Musk can be receiving a briefing associated to China.
