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Elon Musk's China Visit Amid Rising Geopolitical Tensions

Elon Musk's China Visit Amid Rising Geopolitical Tensions

Elon Musk's China Visit Amid Rising Geopolitical Tensions

Elon Musk, a co-founder of Tesla, has officially begun a high-stakes trip to China where he will meet with top government officials and business leaders as the American billionaire looks to expand the operations of his electric-car manufacturer in the second-largest economy in the world.

At a time when the Sino-U.S. relationship is at its worst in decades, Musk, whose current net worth of $198.4 billion makes him the second-richest person in the world, joins other American business titans—including Apple's Tim Cook and Jamie Dimon of JP Morgan Chase & Co.—in traveling to China.

While Beijing retaliates with tit-for-tat actions, such as the recent restriction on Micron Technology from delivering its processors to Chinese companies, the Biden Administration is attempting to limit China's access to sophisticated U.S. technology that might pose a security concern.

Musk met with Foreign Minister Qin Gang on his first visit to China following the epidemic. The interests of the two nations are connected, and Tesla opposes a so-called "decoupling," he reportedly told Qin, a former ambassador to the United States, according to a statement posted online by the Ministry of Foreign Affairs on Tuesday.

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According to a statement from the ministry, Musk met with Jin Zhuanglong, China's minister for industry and information technology, in Beijing on his second day in the country to discuss EVs and connected cars.

Musk went to the Ministry of Commerce as well. It's unclear what the businessman specifically addressed there, but the commerce ministry is a significant government agency in charge of sanctioning Tesla's Gigafactory in Shanghai.

An email requesting feedback from the manufacturer of electric vehicles received no response. Shanghai will also house another Tesla factory that will produce energy-storage products, which is due to break ground in the third quarter of this year, according to the official Xinhua News Agency. It is currently working to trial production of a revamped version of its Model 3 sedan at the facility.

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In addition, the millionaire founder of Contemporary Amperex Technology, Robin Zeng, is said to have visited with Musk, according to local media reports, including those from the state-run Securities Times. According to the sources, the two probably spoke about working together to establish a new production facility in the United States and providing battery-related items for the new firm. According to Bloomberg News, Musk may meet with Premier Li Qiang to talk about autonomous driving technology on his agenda. As the former Shanghai party secretary, Li's success in business includes persuading Tesla to locate the Gigafactory in the city's financial district.

After the United States, Tesla views China as its most significant market. The stakes, though, are rising for Musk. Tesla began a pricing battle in October by reducing the cost of the Model 3 and Model Y vehicles to boost demand in the face of China's slowing economy. The cars are being sold for up to a third less than they would in the US. According to the China Passenger Car Association, the American EV manufacturer sold 177,000 vehicles in the first four months of 2023, accounting for 9.6% of China's new energy vehicle market, well below BYD's 38.2% market share.

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According to analysts, Tesla might provide more reductions in the second half of the year in an effort to increase its market share. However, at a time of heightened rivalry between the two economies, lawmakers in the U.S. have expressed concern about Musk's business ties to China, including whether China could potentially obtain access to classified information held by SpaceX, where Musk serves as CEO.

On Monday, the first day of his visit to China, the billionaire seemed ready to applaud the country's progress, tweeting that China's space program is "far more advanced" than most people believe. However, the entrepreneur was reminded of potential hazards related to his relationships with China just three months ago when the state-run Global Times advised him against tweeting about ideas relating the Covid pandemic's origins to suspected leaks from a Wuhan research center.

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