China has called for “stable and constructive” ties with the US in a meeting with Elon Musk that highlighted the complex relationship between Beijing and the billionaire boss of Tesla, Twitter and SpaceX.
In a statement, the Chinese foreign ministry quoted Musk, who arrived in Beijing on Tuesday for his first visit since the outbreak of the coronavirus pandemic, as comparing US-China interests to conjoined twins and as saying Tesla opposed “decoupling” of the world’s two biggest economies.
Musk, one of the world’s richest men and a powerful figure in the auto sector, social media and space industry, has a complicated relationship with China, which is Tesla’s biggest non-US market and a vital part of the supply chain for its electric cars.
Tuesday’s remarks by Chinese foreign minister Qin Gang were made against a backdrop of tensions that have brought US-China ties to their lowest point in decades. They echoed the suggestion in 2019 by then-premier Li Keqiang that Musk could help “stabilise” relations with Washington.
“A healthy, stable and constructive China-US relationship is not only beneficial to both countries, but also to the world,” Qin told Musk.
Chinese security hawks have raised concerns over links between SpaceX, Musk’s commercial rocket and satellite business, and the US military. Twitter, Musk’s social media platform, is banned in China.
Musk’s trip to China also takes place amid rising concerns among foreign businesses in the country following a series of raids on corporate consultancies.
Musk is expected to visit Tesla’s Shanghai factory this week. On previous trips to China, he met President Xi Jinping’s new premier Li Qiang when he was the party secretary for Shanghai.
Tesla’s China office declined to comment.
Unlike most US business leaders, Musk has a history of striking a sympathetic tone to Beijing on sensitive issues in its ties with Washington, including on Taiwan, which Beijing views as part of its territory and has threatened to take by force if Taipei resists unification indefinitely.
When asked earlier in May about geopolitical tensions involving China and the US over Taiwan, Musk said there was “a certain inevitability to the situation”, given “the official policy of China is that Taiwan should be integrated”.
Chinese defence experts have expressed worries about how Musk’s satellites could be used to conduct surveillance or, in the case of a conflict, support Taiwan. Such fears deepened after SpaceX dispatched a shipment of Starlink satellite kits to fortify Ukraine’s internet network against invading Russian forces last year.
Earlier this week, Musk said on Twitter that the Chinese space programme was “far more advanced” than most people realised. The tweet was in response to a state news report that China would land people on the moon by the end of this decade. China on Tuesday sent its first civilian into orbit.
Musk’s arrival in China coincides with a trip by JPMorgan chief executive Jamie Dimon who is gathering American and Chinese corporate leaders for a summit in Shanghai this week. It also follows a series of visits in recent weeks by rival auto industry leaders, including Volkswagen’s Oliver Blume and General Motor’s Mary Barra.
Tesla’s China business has been immensely successful, with the country of 1.4bn people accounting for less than a third of its annual sales. However, Tesla’s decision to slash prices in China late last year was the opening salvo in a price war that has intensified competition, especially with local rival BYD, a Shenzhen-based group backed by Warren Buffett’s Berkshire Hathaway.
Tesla’s share of sales in China’s “new energy vehicle” market — which includes plug-in hybrid and battery cars — initially dipped before rising to 9.6 per cent from 7.9 per cent in 2022, according to data from Shanghai-based consultancy Automobility. However, BYD’s market share in the same period has risen to 38.1 per cent from 31.7 per cent.
Tesla’s first factory in Shanghai, which opened in 2019, is credited with helping to spark rapid growth of China’s electric vehicle sales and underpin a deep local supply chain. The company last month announced plans to boost investment in Shanghai with a new factory to build its Megapack energy storage systems.
In response to Beijing’s concerns about cross-border data security and sensitive consumer and geographical location data collected by Tesla vehicles, Musk’s company has promised to store information collected in China in local data centres. This was viewed by experts as a blow to global data-gathering efforts critical to its research and development.
Additional reporting by Ryan McMorrow in Beijing
