Tesla Founder Elon Musk visits China, meets Chinese decision makers

Tesla Founder Elon Musk visits China, meets Chinese decision makers

During a visit to China, Elon Musk, Founder of Tesla, met State Councilor and Foreign Minister Qin Gang in Beijing and Shanghai Communist Party Secretary Chen Jining in Shanghai, among other decision makers. Qin Gang said China will continue to steadfastly promote high-level opening-up and is committed to creating a better market-oriented, legal, and international business environment for enterprises from various countries, including Tesla. “China's development is an opportunity for the world. A healthy, stable and constructive China-U.S. relation is beneficial not only for China and the U.S., but also for the whole world,” Qin said. Qin also used Tesla cars as a metaphor to describe the relations between China and the U.S., saying the two countries should “hit the brake” in a timely manner to avoid “dangerous driving” and push win-win cooperation. Musk said Tesla objects to “decoupling” and is willing to further expand business in China.

The Chinese market contributed nearly 21% to Tesla's overall revenue in the first quarter of 2023. No concrete deals or agreements were signed during this trip, despite mounting speculation about Tesla’s plan to expand its Shanghai Gigafactory. Tesla is welcome to bring new products, new technologies and new services to Shanghai, Secretary Chen told Musk. Gigafactory 3, Tesla’s first plant outside the U.S., delivered about 440,000 vehicles to mainland customers in 2022, up 37% from the previous year. Including exports, the Gigafactory churned out about 710,000 vehicles last year, more than half of Tesla’s total output of 1.31 million units.

China’s efforts to promote Chinese-style modernization and a higher level of opening-up will create more opportunities for multinational companies including Tesla, Commerce Minister Wang Wentao said when meeting with Tesla CEO Elon Musk in Beijing. Wang said the deep economic integration between China and the United States requires both sides to strengthen economic and trade dialogue and cooperation under the principles of mutual respect, peaceful coexistence and win-win cooperation. Global economic development and human progress require open cooperation in science and technology. China will continue to provide efficient and pragmatic services and support the long-term and stable development of foreign-funded enterprises in the country, Minister Wang added. Musk said he agreed with the idea that Sino-U.S. relations are not a zero-sum game, and expressed his confidence in the Chinese market and also his willingness to continue deepening mutually beneficial cooperation. He also thanked China for supporting Tesla’s Shanghai factory during the pandemic. Musk also met with Jin Zhuanglong, Minister of Industry and Information Technology (MIIT) to exchange views on the development of new energy vehicles (NEVs) and intelligent connected vehicles.

Chinese experts said that more and more foreign CEOs chose to be “physically in China” to ink deals. This shows the indisputable attractiveness of the Chinese market and the Chinese economy, despite the noises made by some Western media suggesting otherwise. Musk is not the only foreign CEO visiting China in recent days. Shanghai Mayor Gong Zheng met with Starbucks CEO Laxman Narasimhan and reassured him that Shanghai will continue to foster a market-oriented, law-based and international business environment.

China should adopt more effective measures to sustain the inflow of foreign direct investment (FDI) this year amid growing external challenges, ranging from geo-economic fragmentation to a gloomy global economic outlook, experts and business leaders said. While acknowledging the country’s appeal to global investors due to its strong and stable long-term economic fundamentals, they said the government still has room to provide a better policy environment for foreign companies. More than 80% of the 600-plus foreign companies surveyed in the first quarter by the Beijing-based China Council for the Promotion of International Trade (CCPIT) expect their profit margins from investment in China to stay the same or rise this year. Over 90% of the respondents anticipate their profit margins from investment in China to be stable or increase in the next five years.

CCPIT Spokeswoman Wang Linjie said the Yangtze River and Pearl River delta regions and the Chengdu-Chongqing region are the main areas attracting foreign capital. “Expanding production lines and achieving digital transformation are the primary ways for foreign enterprises to increase investment in China,” she said. The Council will continue to provide better services for foreign companies, especially in the area of the protection and use of intellectual property rights, Wang added.

China's FDI in the first four months of 2023 reached CNY499.46 billion, up 2.2% year-on-year. The latest trade figures from the General Administration of Customs show that exports grew by 8.5% year-on-year in April – surprisingly strong despite weakening global demand. Export volume grew to USD295.4 billion, though at a slower pace compared with that of March.

This overview is based on reports by the South China Morning Post, the Global Times and the China Daily.