Is Musk’s Presence in China Useful?

Anyone who thinks the new American president is not someone who likes to share center stage is right. His alliance with Elon Musk does not have that in mind, but is rather intended to reap the enormous advantages this business titan handles with ease and with unquestionable efficiency in service to the presidential cause.

The entrepreneur, the head of the Department of Government Efficiency,* will be in charge of promoting large-scale structural reform, essentially cutting spending by federal agencies, but he will have nothing to do with foreign trade policy or U.S. diplomacy.

But it so happens that the strong global commercial presence of tycoon Musk might be an essential element of future events if put at the service of the new U.S. administration … or the Chinese government. Magnate Musk’s relationship with China might be one of those issues that involves action or disagreement.

Forbes Magazine assures us that since 2019, Musk’s involvement in China has been limited to his connection with developing the automotive business in Shanghai; however, his commercial presence there dates back more than a decade. In 2023 alone, Musk’s Chinese auto plants produced close to 1 million vehicles for worldwide distribution. Moreover, his investments are highly relevant for Beijing.

For the second world power, a stable relationship with the United States during Donald Trump II will be one of the essential elements of its international relationships. Hence, having Tesla and Musk on its soil could, within Xi Jinping’s thinking, be effective in preventing a decoupling.

No one has formally addressed any of the above, but Musk’s dependence on Beijing’s goodwill places the South African businessman in a complex chess game. At this point, it is worth clarifying that the social network X, one focus of the tycoon’s business interests, cannot operate in China because the government deliberately bans the platform. It is equally important to emphasize that certain Chinese authorizations are essential for Tesla to perform efficiently with respect to its semiautonomous driving software platforms for industrial processes. Not to mention the $1.4 billion debt that Tesla has contracted with banks controlled by the Beijing government and the fact that half the world’s deliveries of Tesla cars are now being made from Shanghai.

On the other side of the Pacific, American supremacy does seem to be at the center of the new Republican president’s foreign policy. A trade policy with a strong component of tariffs and countervailing actions to prevent or temper Chinese favoritism for its companies and products is now front of mind for Trump. But no one has considered Musk’s involvement in this sector of the bilateral relationship until now … because in practice, his political capital and his ability to influence the power structure in China looks precarious.

Musk’s real power lies in the influence he can exert on large Western communities through X, his powerful social network. Trumpism should keep that in mind when it comes to using Musk’s talents. Tesla notwithstanding, China is not Musk’s strong suit.

*Editor’s note: The Department of Government Efficiency is a proposed presidential advisory commission and not an official department of the U.S. government, the creation of which requires congressional approval.