Why Musk admires China

People ask whether Donald Trump has ever said a negative word about Russia. We are still searching. The same question could be levelled at Elon Musk about both Russia and China. The South African centibillionaire is scathing about alleged free speech suppression in democracies including the US. But he has only honeyed words for the world’s autocracies — China in particular. Investors assume this is because he has so much business at stake, notably his Tesla plant in Shanghai and Beijing’s pending approval for the EV’s autonomous driving licence. But there is more to Musk’s China admiration than Tesla’s bottom line. China’s surveillance capitalism shows Musk what is possible.  

His envy for Tencent’s WeChat is well known. In mid-2023, Musk told investors that Twitter should emulate China’s superapp, which has 1.3bn users. You can conduct and store half your existence on WeChat, from your banking to your social life, video and telephone calls, dating, online games, food delivery and news. China’s “everything app” is Venmo, Apple Pay, Instagram, Amazon, Tinder, X and Uber under one roof. “You basically live on WeChat in China because it’s so usable and helpful to daily life,” Musk told Twitter staff a few months after he bought the site. “I think if we can achieve that, or even get close to that at Twitter, it would be an immense success.”  

The business allure of the WeChat model is that it is a de facto monopoly that knows everything about its users — their views, romantic life, finances, eating habits, social networks and consumer habits. When a user strays over the line, they can find their money cut off, or their communications blocked. There is no court of appeal. Somebody else owns your privacy and can weaponise it against you, which in turn will condition your behaviour. In WeChat’s case, it is the Chinese state. Though the company is private, all Chinese entities are required to share their data with the government on request. I have no doubt that Musk would kiss Xi Jinping’s ring purely on Tesla’s account. But he also seems to suffer from China envy. 

In the past month, Musk’s “Department of Government Efficiency” has gutted multiple regulatory agencies, including those that oversee his businesses. Among these, the FDA, which monitors Neuralink, Musk’s brain chip company; the Federal Administration Authority, which regulates SpaceX; and USAID, which investigated Starlink. Most egregious was Trump’s order to close the Consumer Financial Protection Bureau, which regulates fintech. The way is now open for Musk to include banking and peer-to-peer financial transfers on X in partnership with Visa. But he will face a much steeper climb than WeChat, which already had a captive audience.

The key to the future of X’s everything app will be trust. That means hosting a thriving and growing base of users who will seamlessly avail of other services. But X is going in the opposite direction. Much as Tesla’s sales are plummeting in most of Europe and protesters have targeted its showrooms, X has been losing users and advertising. The more Musk treats X as his personal fiefdom, the more people he drives away. It is the social media equivalent of Gresham’s law — the bad money driving out the good. Faith in X’s rules is weak. People who disagree with Musk have their accounts suspended or their postings buried. The site’s algorithm seems to be openly rigged to prioritise Musk’s posts.

Even so-called Muskovites might think twice about entrusting their financial data to Musk. Personally, I wouldn’t lend him an umbrella. His Doge team, after all, is bulldozing through guardrails to seize access to the entire country’s personal and financial data at the Internal Revenue Service, the Social Security Administration and the Office of Personnel Management. So why would consumers trust him on X? The vast majority of China’s citizens are resigned to the lack of privacy in their system. In America, it is still plausible to say that people value their autonomy even if so many seem unaware of the jeopardy it is in.

I’m turning this week to my colleague Joe Leahy, the FT’s Beijing bureau chief. Joe, I know you work in a far tougher reporting environment than we do here in Washington — at least for the time being. I have a question and a request. Is Musk seen as China’s friend inside Trumpworld, or simply as a lever to pull in the trade war negotiations? My request is that you give a small flavour of the information system in which Chinese citizens exist. In this regard, is China everyone’s future?  

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• As a parallel column do read, my colleague Martin Wolf: “In defence of the state”. It is remarkable that the case for having qualified experts oversee food safety, air quality, mass disease, disposal of nuclear waste and so on needs to be restated, as Martin eloquently does. Yet Trump and Musk daily tell Americans their government is their enemy.

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Joe Leahy responds

Where to start, Ed? I think the answer on Musk is a bit of both. 

Musk started off in China as a classic “lao pengyou” or old friend — a foreign businessman welcomed for his contribution to China’s “high-quality development”, as President Xi Jinping calls the country’s attempts to climb the tech ladder in competition with the US. 

The launch of Musk’s Tesla “Gigafactory” in Shanghai in 2019 was the “inflection point” for the rise of China’s domestic auto industry, which is now the world’s biggest car exporter and producer of EVs, as our China correspondent Ed White and other FT colleagues wrote in November. 

Musk did that for China.

He also likes to loudly echo Communist party talking points on issues such as China’s plans to take control of democratic Taiwan, which it wants to do by force if necessary.

This combination has won him the ear of the highest officials in China, such as Li Qiang, Xi’s number two. Musk has also met Xi himself at least twice. 

In a measure of Musk’s close connections, Beijing lifted a ban on the use of Tesla vehicles at government offices — a reversal described by Steve Orlins, president of the National Committee on US-China Relations, as “rare and remarkable” given the current security climate. 

Given all this, undoubtedly, Beijing sees him as an important lever in the White House in trade negotiations, if not an actual mole.

Beijing has even discussed using him to broker negotiations over the sale of Chinese-owned TikTok. (As an aside, the video platform was the subject of one of the few snotty remarks Musk has ever made about his Chinese hosts — that Beijing does not allow X to operate in China but the US allows TikTok in America.) 

Which brings us to his ambitions to turn X into WeChat. 

Musk is right about one thing — WeChat is incredibly convenient. You can do everything on it: chat to your mother, order a moutai (Chinese liquor) latte and buy a house, all while swiping short videos of semi-trailer truck collisions (or whatever else takes your fancy).

But as you said, Ed, there is a dark side — a very dark side — to WeChat. Many journalists and others believe the authorities regularly track messages sent on WeChat. I have been in interviews that were suddenly interrupted by public security personnel who, apparently thanks to WeChat, seemed to know our schedule better than we did. 

Being denied access to WeChat means losing all your contacts, not being able to pay bills and a multitude of other severe inconveniences. So getting kicked off it — a common punishment for those speaking out — is to disappear virtually. 

Which brings us to the overall information environment here — most reporting is state propaganda. Social media provides fleeting moments of reality, but anything deemed too unsuitable quickly vanishes. Even data streams once seen as innocuous — such as economic figures — are regularly discontinued.

Could this be the future for the rest of the world? That would be hard to imagine — China has had decades to perfect its system, which includes physical controls, such as street surveillance and strict household registration rules. 

But would the rest of the world accept a “lite” version of one of China’s superapps that could go some of the way towards achieving 360-degree control over people’s lives and minds? That, unfortunately, seems achievable in the current climate.