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Tesla boss Elon Musk embarks on risky China trip | Business and economic news

Tesla Chief Executive Elon Musk is on a major trip to China, starting with a meeting with China’s foreign minister in Beijing, marking his return to the electric carmaker’s biggest business after a three-year hiatus. Production center.

The trip, which began on Tuesday, is the latest return of a top US CEO to China since China reopened its borders and reversed its zero-COVID policy in December. Apple’s Tim Cook visited China in March, while JPMorgan’s Jamie Dimon and Starbucks’ Laxmanara Simhan are also in China this week.

Musk met with Chinese Foreign Minister Qin Gang hours after arriving in Beijing.

Qin told Musk that China was committed to improving the business environment for investors, including Tesla, and used a well-crafted driving metaphor to describe Sino-U.S. relations, according to a statement from China’s Ministry of Commerce.

“We should step on the brakes in time, avoid dangerous driving, use the accelerator skillfully, and promote mutually beneficial cooperation,” Qin said.

The foreign ministry quoted Musk as saying he was willing to expand business in China and opposed the decoupling of the U.S. and Chinese economies, adding that he described the world’s two largest economies as “siamese twins”.

U.S.-China relations were particularly tense after Washington shot down a Chinese balloon believed to be gathering intelligence and warned Beijing not to supply Russia with weapons to use in its war against Ukraine. Taiwan, trade and human rights issues also remain. China has rejected a request by its defense minister to meet with his US counterpart in Singapore this weekend.

“We need to keep the steering wheel in the right direction of mutual respect, peaceful coexistence, and win-win cooperation,” Qin told Musk, according to a ministry statement.

Qin said both sides should “avoid ‘dangerous driving'”. He did not elaborate on steps to improve relations.

Musk’s visit comes as the ruling Communist Party tries to revive investor interest in China’s slowing economy. Foreign firms are uneasy after the attack on a consultancy firm amid tensions between China and Washington.

Tesla did not respond to a request for comment on Musk’s trip, his schedule or his meeting with Qin. China is Tesla’s second-largest market after the United States.

Musk, who also owns Twitter, has remained silent on the platform since arriving in China, where Twitter is banned but some users can access it through a virtual private network. He also did not post on his official Weibo.

During his visit, he is expected to meet with other senior Chinese officials and tour Tesla’s Shanghai factory, but it is unclear exactly who he will meet or what issues they will discuss, Reuters reported on Monday.

A meeting with Zeng Yuqun, chairman of CATL, the Chinese battery giant and a major Tesla supplier, is also planned in Beijing, a person familiar with the matter said on Tuesday. CATL did not respond to a request for comment.

During a trip to China in 2019, Musk met with then-Premier Li Keqiang. A year later, he became a sensation on Chinese social media when he danced on stage to celebrate the opening of Tesla’s Shanghai factory.

increased competition

Tesla faces stiff competition from electric vehicles made in China and some uncertainty over plans to expand its Shanghai factory, its biggest production hub.

Tesla investors have questioned whether and by how much the electric carmaker will increase production in Shanghai.

Daniel Ives, an analyst at investment firm Wedbush, said he expected Tesla to “focus aggressively on expanding its footprint in China.”

Despite growing competition, China, the world’s largest electric vehicle (EV) market, has become the “golden goose EV market”, which he refers to as a source of continued profitability.

In a note to investors, he called Tesla’s Shanghai factory the “heart and lungs” of the company’s global production.

Another question for investors is whether Chinese regulators will approve the release of Tesla’s advanced driver assistance features in the U.S. as part of its $15,000-per-car “Full Self-Driving” software.

The military applications of Musk’s space company SpaceX and its Starlink satellite network have also received attention and attention from Chinese researchers since the Russian invasion of Ukraine.

Chinese state-owned companies have copied Starlink by launching their own low-Earth orbit communications satellites. Chinese military researchers have identified Starlink as a potential threat technology, according to research reviewed by Reuters.

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