Musk's visit to China, what signal?

China News Network, May 5 (Reporter Li Jinlei) Musk, here.

On May 5, Tesla CEO Elon Musk visited China, starting his first trip to China in three years. On the same day, State Councilor and Foreign Minister Qin Gang met with Musk in Beijing. On 30 May, Jin Zhuanglong, minister of industry and information technology, and Wang Wentao, minister of commerce, separately met with Musk.

Musk's visit to China has aroused widespread concern at home and abroad. Experts interviewed believe that Musk's visit to China at this time is very symbolic and a negation of "decoupling and breaking the chain".

There is not only one "Musk" who has recently visited China. Many executives of foreign companies have visited China one after another, looking forward to continuing to share China's development opportunities, and proving with practical actions that "decoupling and breaking the chain" is unpopular.

On May 2023, 5, State Councilor and Foreign Minister Qin Gang met with Tesla CEO Elon Musk in Beijing. Picture from the website of the Ministry of Foreign Affairs

A well-timed visit

Multinational companies need China to grow

It is widely believed that Musk's visit to China is timely, and Tesla today needs China more than before.

China is now Tesla's second-largest market after the United States, and the Shanghai Gigafactory is also its world's largest production center. The importance of the Chinese market to Tesla is self-evident.

Although the specific itinerary of Musk's visit to China has not been announced, at this time, coming to China, where the development of new energy vehicles is growing rapidly, Musk must have some big things to do.

When Minister of Industry and Information Technology Jin Zhuanglong met with Musk, the two sides exchanged views on the development of new energy vehicles and intelligent networked vehicles.

When Minister of Commerce Wang Wentao met with Musk, the two sides had extensive and in-depth exchanges on Sino-US economic and trade cooperation and Tesla's development in China.

On May 2023, 5, Minister of Commerce Wang Wentao met with Musk. Picture from the website of the Ministry of Commerce

Just in April this year, Tesla announced that it will build a new energy storage super factory in Shanghai, planning to produce Tesla's ultra-large commercial energy storage battery (Megapack), which is scheduled to start construction in the third quarter of 4 and put into production in the second quarter of 2023. Media reports show that Tesla will purchase lithium iron phosphate battery cells from CATL. On May 2024, a photo of Musk's meeting with Zeng Yuqun, chairman of CATL, circulated on the online platform. At this critical juncture, it is clearly important to further promote the energy storage gigafactory.

According to industry analysts, Musk also intends to promote full autonomous driving. On the April 4 earnings call, Musk said Tesla could achieve full self-driving this year, which would be a huge source of profit. At Tesla's 19 shareholder meeting in mid-May, Musk pointed out: "Tesla FSD (Full Self-Driving Capability) will be 5 times safer than human driving, it is better and safer than human drivers." ”

Chinese Foreign Ministry spokesman Mao Ning said at a regular press conference on May 5 that China has always welcomed people from business circles from all over the world, including Mr. Musk, to visit China to better understand China and promote mutually beneficial cooperation. We are happy to see foreign enterprises investing in China, deeply cultivating the Chinese market, and sharing development opportunities.

Data map: On May 5, Beijing time, Musk spoke at Tesla's 17 shareholders' meeting. Photo courtesy of Tesla China

A vivid metaphor

"Decoupling and breaking the chain" is unpopular

When Qin Gang met with Musk, Musk used a vivid metaphor: "The interests of the United States and China are intertwined, like conjoined babies are inseparable from each other." ”

He also expressed a clear attitude: "Tesla opposes 'decoupling and breaking the chain', and is willing to continue to expand its business in China and share China's development opportunities." ”

When Commerce Minister Wang Wentao met with Musk, Musk agreed that the US-China relationship is not a zero-sum game, thanked China for its support and guarantee to Tesla's Shanghai factory during the new crown epidemic, praised the vitality and potential of China's development, was full of confidence in the Chinese market, and was willing to continue to deepen mutually beneficial cooperation.

Bai Ming, a member of the Degree Committee of the Research Institute of the Ministry of Commerce, told Zhongxin Financial Reporter that Musk's visit to China at this time is very symbolic, and at the moment when the United States advocates "decoupling and breaking the chain" with China, as a representative of the high-end manufacturing industry in the United States, Musk's visit to China is largely a denial of "decoupling and breaking the chain", and what the US government does does not represent the true thoughts of the American industry.

Bai Ming believes that this also shows that the global manufacturing industry recognizes China and has confidence. The world needs China for development, which cannot be easily cut off by certain forces, and it is becoming more and more difficult to "decouple and break the chain", and the cost will become higher and higher.

More and more people are opposed to "decoupling and breaking the chain". At the opening ceremony of the 2023 Global Trade and Investment Promotion Summit held recently, many participants said that "decoupling" will bring additional burdens to the global economic development. A few days ago, Siemens board chairman of Germany, Bolleren, and American chip manufacturer NVIDIA CEO Huang Jenxun also said in an interview that the Chinese market is irreplaceable, and withdrawing from the Chinese market is not a viable option.

"What we (the United States) should do is to have a good relationship with China, and we need to do a lot of free trade with China, which is our common interest." This can give us more security and creativity. Everything that creates conflict between two States is foolish, stupid, foolish. Buffett's old partner, Berkshire Vice Chairman Charlie Munger, recently said three "stupid" at a shareholder meeting.

Aerial photography of Tesla's Shanghai Gigafactory in the Lingang New Area of the Shanghai Free Trade Zone. Photo by Yin Liqin

A clear signal

Continue to be optimistic about China's economic development prospects

Not only are they verbally opposed to "decoupling and breaking the chain", but many enterprises have also cast "votes of confidence" in China's economy with practical actions to increase investment.

AstraZeneca invested about 4 million US dollars in a new plant in Qingdao, Shandong Province, Airbus announced that it will build a second production line in Tianjin, and Volkswagen announced that it will invest 5 billion euros in China to develop pure electric vehicles... A Reuters article said investment in China was drowning out "decoupling" rhetoric.

Starbucks Global CEO Nashan said in an interview that Starbucks has set a goal of opening 2025,9000 stores by <> and will continue to invest in China, which will become Starbucks' largest market in the world.

According to the "Survey Report on China's Foreign Investment Environment in the First Quarter of 5" released by the China Council for the Promotion of International Trade on May 30, more than eighty percent of the surveyed foreign-funded enterprises expect the profit margin of investment in China to remain flat or increase this year, and more than ninety percent of the surveyed companies expect the investment profit in China to remain flat or increase in the next five years. More than seventy percent of the surveyed companies said that the layout of the industrial chain in China will maintain the status quo or will further localize the industrial chain in China.

Since the beginning of this year, China's economic operation has maintained a good trend, and data show that the actual amount of foreign funds used from January to April was nearly 1 billion yuan, an increase of 4.5000% year-on-year.

On May 5, Minister of Commerce Wang Wentao presided over a symposium in Shanghai, attended by representatives of the American Chamber of Commerce in Shanghai and American companies such as Johnson & Johnson, 22M, Dow, Merck and Honeywell. Wang Wentao stressed that China will continue to welcome the development of US-funded enterprises in China to achieve win-win results. Representatives of participating US-funded enterprises said that they continue to be optimistic about the development prospects of the Chinese market and are willing to further cultivate the Chinese market.

These facts and figures show that multinational companies continue to be optimistic about China's economic prospects, and China is still a hot spot for global investment.

To invest in China is to invest in the future. As Chinese Foreign Ministry spokesman Mao Ning said, China's development is inseparable from the world, and world development also needs China. We will continue to create a market-oriented, rule-of-law, and internationalized first-class business environment, and share the Chinese market and opening dividends with enterprises from all over the world. China will never close its own doors to openness. (End)