There is both a trade war and a technology war between the world’s two largest economies. The Chinese fear that it will be far worse under Donald Trump, but glimpse a hope. Forget that the presidential election was about two candidates. – For many Chinese, technology guru Elon Musk is the biggest winner anyway, writes the South China Morning Post (SCMP). Donald Trump calls Elon Musk a star. Photo: Carlos Barria / Reuters Musk (53) has become Trump’s new best friend. – We have a new star. A star is born – Elon, Trump said as he celebrated his victory in the presidential election. Soon after, Musk published a manipulated photo, which shows him smilingly moving into the White House, and on Wednesday it became known that Musk will be given the task of streamlining the public sector. He will likely be someone Trump listens to. From a Chinese point of view, that could be good news. China is Tesla’s second largest market. Here, a Tesla employee in Shanghai proposes to his girlfriend with a new Tesla model and lots of flowers. Photo: SUN YILEI / Reuters Know the Prime Minister Elon Musk is a well-known name in China. There is no way what he has achieved in a country where he does not even speak the language. Incredibly, Musk was allowed to drive Tesla cars into the government quarter itself in Beijing in 2019, and very few people get in there. – Maybe I am part Chinese, the businessman wrote on X in 2021. In 2019, Elon Musk was allowed to park several Tesla cars in the government quarter Zhongnanhai while he had a meeting with then Prime Minister Li Keqiang. Photo: POOL / Reuters Musk has built the world’s largest Tesla factory in China, also called Giga-Shanghai. And, not least, he knows China’s Prime Minister, Li Qiang. The Tesla boss has shown himself to be a loyal friend of China in several heated cases. He has said he understands that China should have control over Taiwan, and he has stated that there are two sides to the Xinjiang issue, where the authorities are facing international criticism for their treatment of Muslim minorities. The billionaire has said he is “kind of pro-China”. Billionaire Elon Musk wrote a message on X, in which he says he is “kind of pro-China”. Photo: Screenshot X An example of success In April this year, Prime Minister Li Qiang called Tesla’s Chinese venture an example of success in the US-China relationship. The two became acquainted when Musk faced challenges in the United States and sought new hunting grounds. In China, the Tesla boss could get skilled labor, high work ethic, and cheap parts. At the time, Li Qiang held the powerful job of Communist Party leader in Shanghai. He saw opportunities when the American businessman stood at the door, writes The New York Times (NYT). Prime Minister Li Qiang (th) was formerly the head of the Communist Party in Shanghai, and has close ties to President Xi Jinping (left). Photo: Andy Wong / AP Li is known for promoting economic reforms and has a flair for good business. He secured a loan for Musk with such a low interest rate that a minister would have been shocked. And while other foreign companies were forced to cooperate with local firms, Tesla became the exception. Musk also managed to get the Chinese authorities on board with new policies he had already won approval for in California. Now manufacturers who made emission-free vehicles received points that they could sell to traditional car manufacturers, writes the NYT. It was a lucrative arrangement for Musk. Elon Musk threw away his jacket and danced in joy on stage when Tesla had managed to produce its first cars outside the United States. Photo: ALY SONG / Reuters Thrown off the throne In 2020, Musk threw off his jacket and danced, delighted that Tesla had produced its first cars outside the United States. Three years later, the factory in Shanghai had completed 2 million cars. Initially, it might appear that Tesla was the winner of the China adventure, but that was only to begin with. – Tesla was the one who made it rain, says General Motors’ former Asia manager, Michael Dunne, to the NYT. China’s BYD has thrown Tesla from the throne as the world’s largest electric car manufacturer. Photo: Ng Han Guan / AP Chinese authorities saw the green wave as a great opportunity, and bet. The competition from Tesla was good. It gave wind in the sails of Chinese car manufacturers. In January of this year, the Chinese had gained the upper hand, and Tesla was thrown from the throne. The Chinese car manufacturer Build Your Dreams (BYD) became the world’s largest electric car manufacturer. – Does not support punitive tariffs Musk first reacted by saying that Chinese car manufacturers will destroy competitors from other countries, if there are no trade barriers. In May, the US announced 100 percent punitive tariffs on Chinese electric cars. Li Qiang, who was party chief in Shanghai, promised Elon Musk that the gigafactory would be completed within a year. They managed that. Photo: – / AFP The reason is that government Chinese support gives them far too good competitive conditions. There is political agreement in the USA that local industry and the battery industry must be protected. When the punitive tariff was announced, Elon Musk had changed his mind. – Tesla competes quite well in the Chinese market without customs duties and without special support. I am a supporter of zero tariffs, Musk said, according to the BBC. While Musk argues for a free market with minimal government interference, Trump has announced even more punitive tariffs on Chinese goods. US President Donald Trump and Chinese President Xi Jinping struck a good note at the 2017 Beijing summit. Photo: JONATHAN ERNST / Reuters Hard on hard Donald Trump was enthusiastic about Chinese President Xi Jinping when he rolled out the red carpet for him in 2017 , and has called him his friend. He is still not satisfied that the US imports more to China than the other way around, and vows punitive tariffs to force the Chinese to their knees. Facts about Elon Reeve Musk Born June 28, 1971 in Pretoria, South Africa. The father is South African, the mother Canadian. Has university education in physics and economics from the University of Pennsylvania in Philadelphia in the USA. Has ownership in the electric car manufacturer Tesla, the aerospace company SpaceX, the neurotechnology company Neuralink, the transport infrastructure company The Boring Company, the solar energy company SolarCity and the messaging service X. Was also one of the founders of the payment service PayPal. The world’s richest person, with a fortune of over 300 billion dollars. Source: NTB Several sharp China critics will be given key roles when Trump begins his next term as president. And this is where the Chinese put their trust in Musk. They hope that he can influence Trump to soften on China. If that doesn’t happen, the Chinese will certainly respond harshly. Tesla’s Elon Musk and Shanghai’s mayor Ying Yong, during the opening ceremony for Tesla’s gigafactory in China, January 7, 2019. Photo: ALY SONG / Reuters Between the bark and the wood Then Tesla’s largest shareholder will also feel it first hand, because now he needs enough China more than the other way around. – China is promoting its own electric car industry, and Tesla may face challenges in expanding if relations between China and the US deteriorate, says Patrick Schröder from the think tank Chatham House, in a column in Foreign Policy. The warnings are already here. Elon Musk has had access right into the innermost core of the Chinese power apparatus. Here he is with former Prime Minister, Li Keqiang, in the government quarter Zhongnanhai. He was allowed to park several Tesla cars outside. Photo: POOL / Reuters Musk’s cars are no longer allowed to drive into China’s government quarters. Beijing suspects that Tesla collects data, and may be the source of leaks that threaten national security, writes the WSJ. Employees in important state-owned companies and in the military have also been banned from driving Teslas. After all, it is the authorities there who decide whether Tesla will receive benefits or not in China. The technology guru cheered when Trump won the presidential election, but now he is guarded by nervous Chinese who expect him to deliver as a bridge builder. Elon Musk has undoubtedly found himself between a rock and a hard place. Published 14.11.2024, at 14.44
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