Elon Musk and China, Dangerous Ties to American Security?

Elon Musk’s offer to buy Twitter worries US national security experts, according to The Washington Post. In question: the links between the Tesla Group, which belongs to the millionaire, and China. According to them, this operation would risk turning Twitter into a megaphone for anti-American propaganda in Beijing.

When Elon Musk confirmed, in mid-April, that he wanted to acquire Twitter in the name of “freedom of speech,” some already saw the specter of Donald Trump’s return to haunt the popular social network. Others fear another shadow… the shadow of China, which would benefit from the inclusion of the Tesla and SpaceX chief at the head of Twitter. Dozens of former and current members of the administration, who are responsible for controlling foreign investments in the United States, asserted in an interview with the Washington Post on Thursday, June 2, that such an acquisition could pose a “threat to US national security.”

confirmed Richard Suffield, who worked on the Committee on Foreign Investment (CFIUS) during the presidency of Barack Obama and Donald Trump. CFIUS has also begun to pay attention to the ramifications of this deal abroad and more specifically in China, the East Coast daily confirms.

China’s huge factory, Tesla’s Achilles heel?

The concern is mainly with the links between Tesla and China. The Committee on Foreign Investment is not the first to sound the alarm: Jeff Bezos, CEO of Amazon, Already wondered on April 26 If “Beijing does not gain some influence in our village square [Twitter] Thanks to this offer.” But, at the time, observers saw it above all as a low blow from one of its main competitors in the space race. Jeff Bezos, the head of Blue Origin, had purposely raised a Chinese red rag, realizing that the US administration was very sensitive regarding this issue.

However, it is difficult to underestimate Tesla’s dependence on China. “In 2019, Tesla became the first non-Chinese company to own 100% of its factory in China, and Elon Musk took the opportunity to build a huge factory that was doing very well,” recalls Jean-Francois Dufour, director of the company. DCA China-Analysis Consultancy.

Beijing also turned the red carpet for the American businessman by giving him “multi-billion dollar settlement assistance through low-price land grants, low-interest loans, and tax cuts,” the New York Times recalls.

In turn, Elon Musk made this plant the back base for his expansion, not only in China, but throughout Asia. Evidence of the importance of this position for the world’s number one place in electric cars: in 2021, more than half of the cars manufactured by Tesla in the world were assembled precisely at this plant. The Chinese market alone has generated more than $13 billion for the American brand, or more than a quarter of its income, the Wall Street Journal details.

Profits that could quickly become Tesla’s Achilles heel if Beijing decides to use it as leverage. “The authorities can very well restrict Tesla cars to the Chinese market if Elon Musk comes to somehow disappoint them,” says Jean-Francois Dufour.

precedent in 2019

Such a scenario is not preposterous: In 2019, Beijing asked Tesla not to send data collected by its connected cars on Chinese users to the United States. Under pressure, Elon Musk Group opened a data center in Shanghai two years later. This fight for control of personal data reflects, according to Jean-François Dufour, “Beijing’s desire to define its territory and reassert its authority over foreign actors on its territory.”

And then Elon Musk was able to see the extent to which Beijing could retaliate against companies that did not flirt with the regime in the direction of poetry. Thus, the H&M brand found itself banned from the Internet in China [et des tout-puissants sites d’e-commerce comme Alibaba] for its decision, in 2021, not to use cotton from the Xinjiang region, accusing Beijing of using forced labor in its cotton fields.

Moreover, Tesla’s “mega-factory” in Shanghai is not the only source of its economic dependence on China. The same applies to the manufacture of electric motors, with which the cars of the American group are equipped. In its May 2022 report on the components used to manufacture its vehicles, Tesla noted that most of them come from Chinese suppliers and rely on raw materials extracted primarily in China or by Chinese groups.

“Tesla does not rely on these Chinese suppliers more than any other electric car maker, but due to the influence of Elon Musk, Beijing may be more inclined to use this weapon against Tesla than against General Motors or GM. Volkswagen,” sums up Jean-François Dufour. .

Realizing the implications of this dependency, Tesla has raised the possibility of entering the mining industry, but “it will take more than seven years to make it happen,” estimates Gavin Montgomery, raw materials specialist at US firm Wood Mackenzie. Interview by the Washington Post.

Trojan horse from China for what?

The fears of the US authorities that Elon Musk will turn into a Trojan horse in China, if he buys Twitter, also comes from the fact that “the entrepreneur has always spoken very positively about China and its interests,” notes Jean-François Dufour. Hence, he accepted without hesitation that Beijing would shut down its Shanghai factory while the Chinese economic capital was besieged in March. However, Elon Musk cried ugly when California authorities made a similar decision with his factory in Fremont at the start of the pandemic, in April 2020. Even then he threatened to move all of his production to Texas.

>> Also read on FRANCE 24: Covid-19: Elon Musk reopens his Tesla factory and defies US authorities to stop it

So China has the means to get preferential treatment from Elon Musk. But how does this pose a threat to the national security of the United States? First, a former adviser to Barack Obama, who preferred not to be identified, told the Washington Post: “The obvious problem is access to the personal data of Twitter users.”

“It is clear that China will take advantage of this situation to request information on everyone who criticizes Beijing on Twitter,” Murong Shuikun, a Chinese writer who was interrogated by Chinese authorities in 2019 after two critical tweets towards them, abounds in the New York Times. Chinese President Xi Jinping.

Jean-Francois Dufour sums up: “If Twitter is banned in China, it is because Beijing realizes that it can be a formidable tool of influence.” According to the expert, the Chinese regime intends to use it much more freely if Elon Musk takes over the social network: “The fear is that Twitter will become a global loudspeaker for Chinese propaganda,” this expert notes.

The Chinese have already mastered the art of spreading their propaganda on social media, often to criticize the United States. But Twitter has so far tried to curb this misinformation by shutting down fake accounts used only to amplify official Chinese rhetoric, the Wall Street Journal reports. And the vision of “absolute freedom of expression,” which Elon Musk has so frankly championed, will dovetail with Chinese ambitions to carry their message high and far on the international stage.

The authorities lack the means to prevent this takeover in the name of national security. The Committee on Foreign Investment is not intended to derail a process among Americans, as is the case with Twitter and Elon Musk. Their only hope is for the Tesla boss to finally decide that being head of the Twitter empire no longer matters to him.

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