From: allin

The relationship between the United States and China has seen a significant shift in tenor regarding US policy towards China, impacting business leaders with deep ties in the region [00:32:05].

Business Exposure in China

Elon Musk clarified the exposure of his various companies to the Chinese market:

  • SpaceX and Starlink: These companies have “zero business” in China [00:33:06]. SpaceX is not allowed to launch China satellites, and Starlink is banned in the country [00:33:00].
  • Tesla: One of Tesla’s four vehicle factories is located in China [00:33:15]. China is a significant car market, and Tesla has found considerable success domestically within China [00:33:59]. Despite this, the bulk of Elon Musk’s business interests are outside China [00:33:29].

Musk stated that he believes he understands China well, having visited many times and met with senior leadership at various levels over many years [00:33:43].

Geopolitical Tensions: Taiwan

The fundamental issue driving the heightened tensions between the US and China is Taiwan [00:34:07].

  • For over half a century, China’s policy has been to reunite Taiwan with China [00:34:11].
  • China views Taiwan as an “integral part of China that is arbitrarily not part of China,” primarily due to the US Pacific Fleet’s intervention in preventing forceful reunification efforts [00:34:28].
  • China’s military strength is increasing year-over-year, while US military strength in the region is “more or less static” [00:34:55].
  • Defending Taiwan is strategically difficult because it is very close to the coast of China [00:35:09].
  • Musk predicts a point in the “not too distant future” where China’s military strength in the region will “far exceed US military strength” [00:35:15].
  • China has explicitly stated that if a diplomatic solution for reunification is not achieved, there will be a “solution by force” [00:35:50].

Escalating Economic Conflict

Both China and the US are preparing for a potential showdown, possibly in the South China Sea [00:36:01]. This preparation is manifesting in increasing restrictions on technology exports:

  • The US has imposed restrictions on the export of US technology to China, such as Nvidia H100s, which are not allowed to be shipped to China [00:36:19].
  • Advanced chip-making equipment is also restricted from being shipped to China [00:36:33].
  • Musk anticipates that China will respond with “reciprocal sanctions,” leading to a “tit-for-tat reciprocal sanctions increasing in the next few years,” creating a “very hot temperature” in the relationship [00:36:37].

The future of Taiwan’s reunification remains uncertain, with the possibility of either a diplomatic or non-diplomatic solution, but China has made it clear that a solution will occur “one way or another” [00:37:08].