Elon Musk and China, dangerous links for American security?

Elon Musk’s offer to buy Twitter has agitated American national security experts, observes the Washington Post. In question: the links between the Tesla group, which belongs to the multimillionaire, and China. According to them, this operation would risk turning Twitter into a megaphone for Beijing’s anti-American propaganda.

When Elon Musk assured, in mid-April, that he wanted to acquire Twitter in the name of “freedom of expression”, some already saw the specter of Donald Trump coming back to haunt the famous social network. Others fear another shadow… that of China, which would benefit from the accession of the boss of Tesla and SpaceX to the head of Twitter. This acquisition could constitute a “threat to American national security”, thus assured a dozen former and current members of the administration, responsible for controlling foreign investments in the United States, interviewed by the Washington Post, Thursday June 2.

“Given the volume of information, the number of influential users and the amount of sensitive personal data that Twitter has, any possible foreign influence in this operation will be watched very closely,” assures the Washington Post, Richard Sofield, who has worked on the Committee for Foreign Investment (CFIUS) during the presidencies of Barack Obama and Donald Trump. The CFIUS has also begun to take an interest in the ramifications of this transaction abroad and more specifically in China, underlines the daily from the East Coast.

The gigafactory in China, Tesla’s Achilles’ heel?

The concern is mainly about the links between Tesla and China. The Committee for Foreign Investment is not the first to sound the alarm: Jeff Bezos, the CEO of Amazon, already wondered on April 26 if “Beijing hadn’t just gained some leverage in our village square [Twitter] thanks to this offer”. But, at the time, observers had seen it above all as a low blow from one of its main competitors in the space race. Jeff Bezos, boss of Blue Origin, would have knowingly agitated the Chinese red rag, aware that the American administration is very touchy on the issue.

Still, it’s hard to downplay Tesla’s reliance on China. “In 2019, Tesla became the first non-Chinese company to own 100% of its factory in China and Elon Musk took the opportunity to build a giga-factory which works very well”, recalls Jean-François Dufour, director of the firm. DCA China-Analysis consultancy.

Beijing had also rolled out the red carpet for the American entrepreneur by giving him “settlement aid worth several billion dollars through land granted at low prices, loans at low interest rates and tax cuts,” recalls the New York Times.

In return, Elon Musk has made this factory the rear base for his expansion, not only in China, but throughout Asia. Proof of the importance of this site for the world number 1 in electric cars: in 2021, more than half of the cars manufactured by Tesla in the world were assembled precisely in this factory. The Chinese market alone brought in more than 13 billion dollars for the American brand, or more than a quarter of its income, details the Wall Street Journal.

Profits that could quickly become Tesla’s Achilles’ heel if Beijing decides to use it as leverage. “The authorities can very well restrict the access of Tesla cars to the Chinese market if Elon Musk comes to disappoint them in one way or another,” says Jean-François Dufour.

A precedent in 2019

Such a scenario is not so preposterous: in 2019, Beijing asked Tesla not to send the data that its connected cars collected on Chinese users to the United States. Under pressure, Elon Musk’s group opened a data center in Shanghai two years later. This battle for the control of personal data reflects, according to Jean-François Dufour, “Beijing’s desire to mark its territory and reassert its authority over foreign actors present on its territory”.

And Elon Musk was then able to see how much Beijing could be vindictive of companies that did not caress the regime in the direction of the hair. Thus, the H&M brand found itself banned from the Internet in China [et des tout-puissants sites d’e-commerce comme Alibaba] for having decided, in 2021, to no longer use cotton from the Xinjiang region, where Beijing is accused of using forced labor in cotton fields.

Moreover, Tesla’s “giga-factory” in Shanghai is not its only source of economic dependence on China. The same goes for the manufacture of the electric motors with which the cars of the American group are equipped. In a May 2022 report on the components used to manufacture its vehicles, Tesla notes that most come from Chinese suppliers and rely on raw materials mined primarily in China or by Chinese groups.

“Tesla is no more dependent on these Chinese suppliers than any other electric car maker, but given the influence of Elon Musk, Beijing may be more tempted to use this weapon against Tesla than against General Motors or General Motors. Volkswagen”, summarizes Jean-François Dufour.

Aware of the implications of this dependency, Tesla has raised the possibility of getting into the mining industry, but “it would take more than seven years to achieve this”, estimated Gavin Montgomery, raw materials specialist for the American firm, Wood Mackenzie. , interviewed by the Washington Post.

A Trojan horse from China for what?

The fears of the American authorities to see Elon Musk turn into a Trojan horse of China, if he bought Twitter, also come from the fact that “the entrepreneur has always had a very positive speech with regard to China and interests”, notes Jean-François Dufour. He thus accepted without flinching that Beijing close its factory in Shanghai at the time of the confinement of the Chinese economic capital in March. Elon Musk had however cried foul when the Californian authorities had taken a similar decision with his factory in Fremont at the start of the pandemic, in April 2020. He had even then threatened to relocate all his production to Texas.

>> To read also on France 24: Covid-19: Elon Musk reopens his Tesla factory and challenges the American authorities to stop it

China therefore has the means to obtain preferential treatment from Elon Musk. But how does this pose a risk to US national security? First, “an obvious problem is access to the personal data of Twitter users,” said a former adviser to Barack Obama, who preferred to remain anonymous, to the Washington Post.

“China will clearly take advantage of this situation to request information on all those who criticize Beijing on Twitter”, abounds in the New York Times, Murong Xuecun, a Chinese writer who had been questioned by the Chinese authorities in 2019 after two critical tweets towards Chinese President Xi Jinping.

“If Twitter is banned in China, it is because Beijing recognizes that it can be a formidable tool of influence”, summarizes observes Jean-François Dufour. And according to the expert, the Chinese regime intends to use it much more freely if Elon Musk actually takes the reins of the social network: “the fear is that Twitter will become a global megaphone for Chinese propaganda”, notes this expert.

The Chinese have already mastered the art of disseminating their propaganda on social media, often to criticize the United States. But Twitter has so far tried to reduce this misinformation by closing fake accounts used only to amplify official Chinese discourse, recalls the Wall Street Journal. And the vision of “absolute freedom of expression”, defended so openly with ardor by Elon Musk, would marry very well with the Chinese ambitions to carry their message high and far on the international scene.

The authorities lack the means to prevent this takeover in the name of national security. The Committee for Foreign Investment is not intended to block an operation between two Americans, which is the case with Twitter and Elon Musk. Their only hope is that the Tesla boss finally decides that being the head of the tweeting empire no longer interests him.

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