Notably, Tesla was the first foreign automaker _permitted to establish operations in China without a local partner_, following a change in ownership regulations. The Shanghai factory was

constructed with the support of _US$1.4 billion in loans_ from Chinese state-owned banks, granted at favorable interest rates. Between 2019 and 2023, the Shanghai government also provided

Tesla with _a reduced corporate tax rate of 15%_ – _10 percentage points lower_ than the standard rate. The _cost advantages of manufacturing in Shanghai_, which include lower production and

labor expenses, have further cemented Tesla’s reliance on the Chinese market. Given that _Musk’s wealth is largely tied to Tesla stock_, his financial standing is increasingly dependent on

megapack battery factory outside the U.S._. This investment deepens Tesla’s presence in China amid a new wave of U.S.-China trade tensions. On Feb. 1, the Trump administration imposed _a 10%

tariff on Chinese imports_, prompting _Beijing’s retaliation with tariffs_ on American coal, liquefied natural gas, agricultural equipment and crude oil. A CHINESE FAN It remains unclear to

what extent Musk’s financial interests in China will translate to real influence over the Trump administration’s policy toward Beijing. But Musk’s long history of pro-China remarks suggests

the direction he wants the administration to move. During his visit to Beijing in April 2024, Musk _praised the country_, noting also: “_I also have a lot of fans in China – well, the

feeling is mutual_.” His admiration appears to hinge in part on how he views business and labor practices in China. In that vein, Musk has _criticized American workers as lazy_ and has faced

 _U.S. labor law disputes_, while simultaneously praising Chinese workers for “_burning the 3 a.m. oil_” under an intensely _repressive labor system_. In numerous posts on the social media

platform X, formerly Twitter, which he owns, Musk has also praised China’s _infrastructure_ and _high-speed rail system_, lauded its _space program_, applauded its leadership in _global

green energy initiatives_ and _urged his followers to visit the country_. Musk has also _opposed U.S. efforts to decouple_ from China, describing the countries’ economies as “_conjoined

twins_,” despite a sizable part _of the foreign policy establishment_ in the West viewing decreased dependency on China as necessary for security interests amid rising geopolitical tensions.

On the issue of Taiwan, the _most dangerous flashpoint_ in U.S.-China relations, Musk has compared Taiwan to Hawaii, arguing that it is _an integral part of China_ and noting that the U.S.

Pacific Fleet has prevented mainland China _from achieving reunification by force_. Musk further suggested that the Taiwan dispute could be resolved by allowing China to establish Taiwan as 

_a special administrative zone_, similar to Hong Kong. His remarks were shared and welcomed by _China’s then-ambassador to the U.S._, who, in a post on X, emphasized China’s so-called

peaceful unification strategy and advocated for the “one country, two systems” model. TRUMP’S BACK-CHANNEL ENVOY? The big question going forward is how Musk’s financial stakes in, and stated

admiration for, China will translate into attempts to influence the U.S. administration’s China policy, particularly given Musk’s unconventional advisory role and the strong faction of

anti-China hawks in Trumpworld. Given Musk’s approach to China, it’s hard to see him not trying to use his influence with the president to push for somewhat warmer relations with Beijing. If

such counsel were heeded, it’s easy to envision Musk leveraging his deep ties to China, particularly _his close personal relationship with China’s current second-ranking official, Premier

Li Qiang_, who was the Shanghai party chief when Tesla’s factory was built. In the scenario, Donald Trump could tap Musk as a back channel for diplomacy to ease U.S.-China tensions and

facilitate bilateral cooperation when needed. To this point, it was, perhaps, telling that it was Musk who met with China President Xi Jinping’s envoy to Trump’s inauguration, Vice President

Han Zheng, on the _eve of the event_. But it’s far from certain that Trump wants that diplomatic role for Musk, or that other voices won’t win out with regard to Beijing. In his first term,

Trump launched an unprecedented _trade war_ and _tech blockade against China_, fundamentally reshaping U.S.-China relations and pushing the U.S. toward something of _a bipartisan consensus

to counter Beijing_ that has existed for several years. Trump’s tariff moves and second-term picks for top trade and commerce roles, like _Peter Navarro_ and _Jamieson Greer_ — who played

key roles in the trade war against China during the president’s first term — suggest that Trump’s commitment to further decoupling from China remains strong. Furthermore, Musk’s business

interests and personal wealth tied to China could leave him vulnerable to Chinese influence. By leaning on Musk’s close ties with Trump, China could use his dependence on the Chinese market

as a bargaining chip to pressure Trump into making concessions on issues of major strategic importance to Beijing. China has a history of coercing foreign companies reliant on its market

into making compromises on matters concerning its national interests. For instance, Apple removed virtual private network apps from its app store in China _at the government’s request_.

Similarly, Tesla could face comparable pressure in the future if Beijing wants to use Musk as a cudgel to influence policy in the Trump administration. Notably, as the head of DOGE, with 

_access to sensitive data from multiple agencies_, Musk could find himself caught between U.S. security scrutiny and China’s strategic targeting. So long as Musk retains the influence with

Trump that he holds now, it’s conceivable that his pro-China sentiments will translate into attempts to influence government policy. Yet even if this is to be the case, whether those efforts

succeed will depend on the president and his other advisers, many of whom are seeking an aggressive front against Beijing and are likely to view Musk as an impediment rather than ally in

that fight to come. _THIS ARTICLE IS REPUBLISHED FROM THE CONVERSATION UNDER A CREATIVE COMMONS LICENSE. READ THE ORIGINAL ARTICLE _HERE_._