Elon Musk has opinions on how a whole lot 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 removing of the president of Ukraine, to not point out the two-month siege he has waged in opposition to America’s federal forms.
However one nation tends to get a move from the world’s richest man. He’s, in his personal phrases, “form 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 sensible. China is important to Musk’s automotive firm Tesla as each a producer of automobiles 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 Cook 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 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.
This week, a number of media retailers reported, citing US officers, that Musk was on account of be briefed on the US army’s categorised plans for a warfare with China — uncommon for any civilian outdoors the army chain of command, a lot much less one with intensive business ties to the adversary in query. Secretary of Protection Pete Hegseth denied that the assembly would concern warfare plans and Musk described the report as “maliciously false info.
Through the latest 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 might 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 a whole lot of tens of millions 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 firms.
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 automobile market: Gross sales in China rose 8.8 % in 2024, a 12 months through 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 vital 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.
Because of his real-life Tony Stark picture, Musk has change 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 advised 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 automobiles. 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 main 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” know-how. The corporate is presently hampered by guidelines that 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 nearly $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 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 Social gathering cowl up genocide and slave labor.”
Musk’s China ties have additionally raised safety issues, on condition that one other of his firms, 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 firms with hyperlinks to Musk’s companies have additionally been focused by the US authorities. In January, the Pentagon added Modern Amperex Know-how Co. (CATL), the world’s largest producer of lithium-iron-phosphate batteries, and a significant Tesla provider, to its listing of “Chinese language army firms” that produce each civilian and army items. US corporations are usually not prohibited from doing enterprise with firms on this listing, however the listing is meant to boost reputational and compliance prices.
One other firm on the listing, the Chinese language web big Tencent, at one level owned a 5 % stake in Tesla, although in response to media experiences, it has since divested its holdings. Tencent is the mum or dad firm of WeChat, which was as soon as also known as “China’s Twitter,” however has since change 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 firms might not be totally recognized. The Monetary Instances reported that Chinese language traders have been funneling tens of tens of millions of {dollars} into Musk’s personal firms, like SpaceX, Neuralink, and xAI, utilizing opaque possession constructions that protect traders’ 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 availability, 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 mum or dad firm ByteDance.
In February, the Monetary Instances 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 form of negotiations, a technique to bypass Rubio, a technique to bypass [national security adviser Michael] Waltz, a technique 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, advised Vox at a latest 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 will.”
On paper, a nationwide safety workforce that features Rubio and Waltz reporting to Trump looks like a China hawk’s dream. And in some respects, similar 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 creating international locations 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 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 up to now.)
Trump additionally backed off a transfer to shut a tax loophole utilized by Chinese language quick vogue 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 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 stated prior to now 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 advised Vox his authorities was in search of different satellite tv for pc providers to SpaceX as a result of Musk “might reduce the service [over] his private opinion, so we don’t suppose this was a trustable companion.”
Musk has spoken out in opposition to tariffs prior 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 up to now could harm Musk’s opponents greater than they harm him.
Nonetheless, if US-China commerce relations deteriorate additional, to not point out the kind of “decoupling” Rubio advocated as a senator, it’s exhausting 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.
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 varied factors within the warfare are prone to be reexamined once more amid experiences that Musk is being learn in on Pentagon plans. The New York Instances 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. Based on the Wall Avenue 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 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 response to experiences, 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 seemingly hoping Musk will a minimum of be close by.
Replace, March 21, 11:30 am ET: This story was initially revealed on March 18 and has been up to date with new experiences that Musk could be receiving a briefing associated to China.
