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Elon Musk’s business ties to China draw scrutiny after Twitter purchase

The Tesla CEO has built a close relationship with Chinese officials.
Image: Elon Musk in 2020.
Elon Musk, in Washington in 2020.Brendan Smialowski / AFP via Getty Images file

After Elon Musk announced he would buy Twitter for $44 billion, Democratic lawmakers, human rights groups and even Jeff Bezos began asking questions about what his business interests in China will mean for the social media platform. 

Some people fear that Musk’s role as the CEO of Tesla, which has significant operations in China, could complicate his plans to make Twitter a haven for free speech. They worry that Twitter may be more hesitant to remove content like Chinese government propaganda or state-sponsored misinformation campaigns, since the actions could endanger Musk’s relationship with Beijing.

China is Tesla’s second-largest market, responsible for producing around half its cars and generating more than a quarter of its revenue. In 2019, Tesla became the first foreign automaker to open an independent factory in China, which was recently selected by Shanghai authorities as one of 600 businesses that could reopen during a Covid lockdown in the city. Tesla secured roughly $1.6 billion in loans from Chinese banks to finance the project, and has also received a $1.8 billion investment from Tencent, one of China’s largest tech companies.

“There certainly is the potential that the Chinese could directly or indirectly put pressure on Musk to constrain how Twitter talks about China,” said Scott Kennedy, an expert in Chinese economic policy at the Center for Strategic and International Studies, a Washington think tank. “He’s supposed to be a guardian of the public square. That understandably raises questions given how invested Tesla is in China.”

Bezos, arguably Musk’s biggest rival, put a finer point on it: “Did the Chinese government just gain a bit of leverage over the town square?” he asked his Twitter followers. (Bezos later followed up to say it was more likely that the deal would result in “complexity in China for Tesla, rather than censorship at Twitter.”)

Kennedy stressed it’s not yet clear how Musk might respond to demands from Chinese officials. Both foreign and domestic companies that operate in the country, he said, do not always acquiesce to the government’s requests. Twitter could also prevent interference by putting in place transparency measures that would bar Musk from making policy decisions unilaterally.

Twitter declined to comment. Tesla, which dissolved its public relations department several years ago, did not respond to a request for comment.

During a regular news briefing Tuesday, China’s Foreign Ministry spokesperson Wang Wenbin said speculation about whether China would use Tesla’s operations as leverage over Twitter had no basis.

Big investments

While Musk is often an outspoken critic of U.S. policies and lawmakers, he has largely stayed silent on issues that are sensitive to China’s leaders. On Twitter and in interviews, he has repeatedly praised the country for its technological innovation. 

“The Chinese economy, I think, can do extremely well over the next decade and will become the biggest economy in the world,” Musk told the state broadcaster China Central Television last year.

“Elon Musk has this persona of not playing by the rules,” said Yaqiu Wang, a senior China researcher at Human Rights Watch. But she said he has been careful not to make statements that might inflame Chinese officials. “He has this very American entrepreneur persona, but of course he knows the line.”

In December, Tesla made its largest show of support for the Chinese government yet, announcing it had opened a showroom in the western Chinese region of Xinjiang, where human rights groups estimate more than 1 million Uyghurs and other ethnic minorities have been imprisoned in what the the U.S. government has labeled a genocide. Other Western companies have pledged to stop sourcing raw materials from Xinjiang, and Tesla’s move came just days after President Joe Biden signed a law restricting imports from the area.

“It is unthinkable that Mr. Musk’s company Tesla could operate in the hotbed of human rights violations without the blessing of the Chinese Communist Party,” Rep. Bill Pascrell Jr., D-N.J., said in a statement. “If Mr. Musk ultimately acquires Twitter, those relationships and the site’s behavior towards CCP (Chinese Communist Party) interests and freedom generally will demand close and continued scrutiny by Congress and the Biden administration.” 

The Chinese embassy in Washington did not respond to a request for comment. Beijing has previously rejected criticisms of its policies in Xinjiang and denied that it is committing human rights abuses in the region.

Connecting dissidents

Although Twitter is officially blocked by China’s censors, it has become a prominent platform for Chinese dissidents, scholars and members of the public to express themselves and get access to information, Wang said. “People congregate on Twitter. There isn’t a similar community on Facebook or Instagram,” she said. “Twitter is the place.”

At the same time, the Chinese government has used Twitter to strengthen its influence around the world. Dozens of state-funded media outlets and journalists from China have amassed large audiences on the site, where they often share government views on issues like Taiwan independence and pro-democracy protests in Hong Kong.

China has also reportedly arrested a number of Chinese citizens over their Twitter posts. In the last few years, the country has jailed more than 50 people for sharing anti-government views on the site and on other foreign social media platforms, according to The Wall Street Journal.

“We know from our own research that the Chinese government has utilized Facebook and Twitter to target and intimidate activists,” said Peter Irwin, a senior program officer at the nonprofit Uyghur Human Rights Project. “So this needs to be taken into consideration if there are any major changes to the platforms’ administration.”

Twitter has taken steps to combat China’s influence. In 2019, it became one of the first social media platforms to ban political advertising and later added labels to the accounts of state officials and media outlets, warning other users that they are affiliated with a country’s government. The company says it has taken down hundreds of thousands of fraudulent accounts that were used to amplify narratives favorable to the Chinese Communist Party.

According to Twitter’s transparency reports, the company has never “disclosed any account information to Chinese authorities, nor removed content on the basis of a legal demand from Chinese authorities.”

Differing views

Opinions about Musk’s purchase of Twitter have been split along partisan lines. Several Republican lawmakers who previously raised alarms about Musk’s relationship with China said they were not concerned about him buying the social network. That includes Rep. Chris Stewart of Utah, who said last month that he was holding briefings to determine whether SpaceX, the aerospace manufacturer Musk runs, had any ties to the Chinese government. In December, China complained to the United Nations that SpaceX’s satellites had flown too close to its space station, endangering Chinese astronauts.

“Elon Musk’s acquisition of Twitter is a big win for free speech. And I do not believe that victory cedes any leverage to China over the platform,” Stewart said in a statement. “The premise of Mr. Musk’s purchase is to rescue Twitter from those who allowed the social media company to become an ideological enforcer, as opposed to a free and open communications platform.”

Sen. Marco Rubio, R-Fla., a frequent critic of the Chinese government, condemned Tesla in January for “helping the Chinese Communist Party cover up genocide.” Earlier this month, he introduced legislation that would increase support for members of the Uyghur diaspora in the U.S. and other countries.

But when asked about Musk’s acquisition of Twitter, Ansley Bradwell, a spokesperson for Rubio, pointed to a tweet in which the senator said he believed the deal had made the “far left” upset because it “fears losing the power to threaten, silence and destroy anyone who doesn’t agree with them.”