The Chinese government is a threat to free enterprise around the globe.
Helping itself to the innovations of its rivals through hacking and espionage , the communist regime has taken a “by any means necessary” approach to make its economy dominant globally in the 21st century. It’s no surprise then that many western nations and businesses have begun reducing investments in this East Asian adversary, hoping to avoid making an already bad situation worse.
But it appears nobody told Elon Musk.
Speaking recently at a tech conference, the world’s richest man stated that “Tesla will continue to expand our investment and R&D efforts in China.”
You have to give it to Musk, ever the contrarian, he loves nothing more than to zig when the rest of the world zags. Yet, this doubling down (or tripling, depending on who you ask) in China seems odd even for him.
This is the same man who just last year sued a Chinese-sponsored automaker for stealing trade secrets.
Yet there he was, telling the conference crowd that: “My frank observation is that China spends a lot of resources and efforts applying the latest digital technologies in different industries, including the automobile industry, making China a global leader in digitalization.”
I didn’t detect any sarcasm in his voice.
China doesn’t spend anywhere near the amount of capital on R&D as its competitors, and security analysts are in near-unanimous agreement that the gains China has made these past two decades have come from stealing the secrets of western nations. Musk should know this being the CEO of a global enterprise.
Perhaps more outrageous are his comments at the conference in support of greater oversight by the Chinese government. He said that “[Tesla is] glad to see [China add] a number of laws and regulations [around data collection and storage].”
This is the same billionaire who has seemingly ” waged war ” on the idea of any regulations pertaining to his business operation in the U.S. Basic ones, such as demanding oversight of dangerous car crashing autopilot software , have driven him to complain about outdated bureaucracy, while the body count continues to rise . The fact that he needs permission from the Federal Aviation Administration to launch an experimental rocket has caused him equal annoyance. He has initiated a public shaming campaign of the FAA and even had the audacity to launch a rocket without FAA approval only to watch it come crashing down in flames.
How can a person who loves nothing more than to bark to the American press about restrictions on his freedom be so enthralled with the regulations implemented by one of the world’s most brutal authoritarian regimes?
Often, claims of hypocrisy come attached to issues of money. While such claims tend to be hyperbolic, it seems pretty clear that Tesla’s “love” of China is likely its need for revenue.
It’s no secret that Tesla sees China as a key market for its continued success, and the result has been the car company becoming entangled with the Chinese bureaucracy. The deal is quite simple: China granted Tesla some minor advantages in self-control over its operations and more than a billion dollars in favorable loans in return for heavy investment in the mainland, which it believed would result in a flourishing domestic supply chain.
The more significant issue here is the negative effect that Musk’s operations will have on the American economy and security apparatus.
Nobody, Musk included, could have predicted the issues with supply shortages or the troubles the world has faced these past two years. But what was evident in 2019 was that investment in the American industries that Musk competes in would be critical to keeping American industry ahead of its Chinese competitors.
Musk’s interconnected portfolio consists of electric vehicles, green energy, commercial space transportation, artificial intelligence, tunnel transport, and even cutting-edge medical devices. The billionaire has been happy to take billions of dollars from the U.S. government to advance his businesses and looks to take in billions more in benefits from defense contracts and major legislation working its way through Congress. While nobody’s asking him to put on a “Team USA” cheer suit, the least that the world’s richest man can do is put national security considerations before his profit motive.
The U.S government and its private partners are already fighting a digital war against Chinese hackers trying to protect our mainland against more damaging theft and espionage. Earlier this month, a top-ranking Pentagon official resigned because he feels the issue isn’t being taken seriously enough. By expanding operations in China, Musk is making access to American innovation easier while simultaneously making American businesses less competitive.
Not only is Musk promoting expanding in China, but he’s also supporting Chinese protectionism. At the tech conference, he stated, “All personally identifiable information is securely stored in China without being transferred overseas.” This appears to be an endorsement of China’s gradual reduction in cross-nation sharing of information . It’s very much possible that Musk’s data-reliant businesses will face increasingly significant restrictions on how much it can share from the Chinese market. So, not only will China continue to pillage our market, but it will simultaneously restrict access to anything valuable in theirs – giving them a greater advantage in the digital economy.
Musk is the richest man in the world. He doesn’t need to jeopardize America’s security interests to get by. His priorities could very well damage America’s standing in the near future, and lawmakers should take note of that when considering how to combat the rising threat of Chinese authoritarianism on the global market.
It may be time to stop focusing our gaze across the Pacific and look to shore up our own businesses first. The threat appears to be coming from inside our borders.
Mark Anthony is a former Silicon Valley Executive with Forrester Research, Inc. (Nasdaq: FORR). Mark is now the host of the nationally syndicated radio called The Patriot and The Preacher Show. Find out more at patriotandpreachershow.com .