Elon Musk has opinions on how a variety of the world’s nations must 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 towards 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 autos and as a shopper market. Musk can 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 targeted on the dangers of doing enterprise in China. “The excellence is that [Apple CEO] Tim Prepare dinner shouldn’t be 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 crew 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 struggle, 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 might supply Beijing in future negotiations — are getting extra discover in each nations.
This week, a number of media retailers reported, citing US officers, that Musk was attributable to be briefed on the US army’s categorised plans for a struggle 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 struggle plans and Musk described the report as “maliciously false data.
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 can 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 virtually can’t be overstated. In 2019, the corporate opened its Shanghai “gigafactory” with lots of of hundreds of 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 firms.
It’s now Tesla’s largest manufacturing facility, producing half of the corporate’s vehicles globally final yr. Musk has praised employees at his Chinese language manufacturing facility 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 facility was actually having employees sleep within the manufacturing facility attributable to Covid restrictions.
Tesla has additionally benefited from promoting vehicles in China’s fast-growing electrical car market: Gross sales in China rose 8.8 p.c in 2024, a yr during 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 knowledgeable 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.
Because of 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 useful, 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 an area marketplace for electrical autos. That effort labored phenomenally effectively: Greater than half of vehicles offered 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 yr.
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 stop 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 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 know-how at no cost 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 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 yr’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 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 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 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 listing of “Chinese language army firms” that produce each civilian and army items. US companies aren’t prohibited from doing enterprise with firms on this listing, however the listing is meant to lift reputational and compliance prices.
One other firm on the listing, the Chinese language web big Tencent, at one level owned a 5 p.c stake in Tesla, although in accordance with media stories, 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 develop into 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 wish to construct X into.
The true extent of Musk’s hyperlinks to Chinese language firms might not be absolutely recognized. The Monetary Occasions reported that Chinese language traders have been funneling tens of hundreds of thousands of {dollars} into Musk’s personal firms, like SpaceX, Neuralink, and xAI, utilizing opaque possession buildings that defend traders’ 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 yr, 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.”
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 mum or dad firm ByteDance.
In February, the Monetary Occasions reported that Chinese language officers have 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 approach to bypass Rubio, a approach to bypass [national security adviser Michael] Waltz, a approach 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 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 crew that features Rubio and Waltz reporting to Trump looks as if a China hawk’s dream. And in some respects, corresponding 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 nations 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 p.c tariffs on Chinese language items, ostensibly over China’s function within the world fentanyl commerce, although these are lower than the 60 p.c tariffs he proposed on the marketing campaign path, or the 25 p.c tariffs he has now slapped on Mexico and Canada. (Canada and European nations have earned Trump’s ire greater than China, at the least up to now.)
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 yr.
Trump’s overseas assist 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 prior 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 searching for various satellite tv for pc providers to SpaceX as a result of Musk “might minimize the service [over] his private opinion, so we don’t suppose this was a trustable companion.”
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 up to now might 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 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 not think about the Trump administration really being absolutely hawkish on China, till Musk drastically 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 struggle are more likely to be reexamined once more amid stories 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 line 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 have their manner, as they usually did throughout Trump’s first time period. A check might are available in June when, in accordance with stories, 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 doubtless hoping Musk will at the least 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 stories that Musk could be receiving a briefing associated to China.
