Elon Musk's Influence on US-China Policy: A Double-Edged Sword

Elon Musk, the world's wealthiest man and CEO of Tesla, SpaceX, and Twitter, has emerged as a significant political force in recent years. His influence on U.S. politics has raised concerns in China, with academics expressing doubts about the potential consequences of his growing sway. This article explores the implications of Musk's influence on U.S.-China policy and the strategic responses China might adopt to counter his impact.



Musk's alignment with Donald Trump and support for right-wing parties in Europe have led to concerns in China about the potential for a global trade war and geopolitical pressure. Musk's opposition to the outbound investment screening bill, which aimed to scrutinize American companies' investments in sensitive Chinese industries, has further exacerbated these concerns. China views Musk's actions as an attempt to contain China's technological advancements and prevent U.S. firms from being complicit in human rights abuses or a Chinese military buildup.



The potential economic consequences for China if Musk's influence on U.S. policy increases are significant. These include:

1. Outbound Investment Screening: Musk's opposition to the outbound investment screening bill could lead to increased U.S. investments in sensitive Chinese industries, such as AI, quantum computing, and semiconductors. This could result in technology transfer and intellectual property leakage, benefiting U.S. companies but potentially harming China's long-term technological development and security.
2. Trade Tensions: Musk's influence on U.S. policy could exacerbate trade tensions between the U.S. and China. If Musk pushes for more protectionist policies, it could lead to increased tariffs, export controls, or other barriers to trade, negatively impacting Chinese exports and economic growth.
3. Geopolitical Risks: Musk's alignment with both the U.S. and Chinese governments could create geopolitical risks. If Musk's influence leads to a more confrontational U.S. policy towards China, it could increase the likelihood of conflicts or crises, which would have significant economic consequences for both countries.
4. Market Access: Musk's influence on U.S. policy could impact China's market access in the U.S. If Musk pushes for more restrictive policies, it could make it more difficult for Chinese companies to enter or operate in the U.S. market, limiting their growth and profitability.
5. Investment in China: Musk's influence on U.S. policy could also impact foreign direct investment (FDI) in China. If Musk's influence leads to a more hostile U.S. policy towards China, it could deter other U.S. companies from investing in China, reducing the inflows of FDI and slowing down China's economic growth.
6. Tesla's Operations in China: Musk's influence on U.S. policy could also impact Tesla's operations in China. If U.S.-China relations deteriorate, it could lead to increased scrutiny or restrictions on Tesla's activities in China, potentially harming its business and the Chinese economy.

Chinese academics' doubts about Musk's influence may shape China's strategic response to U.S. policy in several ways:

1. Expanding unilateral openness: Zheng Yongnian, a prominent Chinese academic, has suggested that China should expand its "unilateral openness" measures to countries, including the United States, to counter U.S. attempts to establish a parallel trade system independent of China. This strategy aims to create an external driving force for China's institutional reforms and isolate U.S. hardliners, Cold War advocates, and anti-China forces (Zheng, 2024).
2. Increased scrutiny of U.S. tech companies: Musk's influence and the potential for U.S. tech companies to be complicit in human rights abuses or a Chinese military buildup may lead China to scrutinize U.S. companies' investments in sensitive Chinese industries more closely. This could result in stricter regulations or increased oversight of U.S. companies operating in China (FT, 2025).
3. Strengthening domestic markets and institutions: Chinese academics have emphasized the importance of accelerating institutional reforms and supporting domestic markets to adapt to the changing global environment. This focus on internal growth potential may lead to a more assertive stance on trade and economic policies, as well as a greater emphasis on self-reliance in technology and innovation (Zheng, 2024).
4. Countering U.S. influence in global tech: Musk's influence on global politics and technology may prompt China to invest more resources in developing its own tech industry and reducing its dependence on U.S. technology. This could lead to increased competition between the two countries in the tech sector and a more assertive stance on intellectual property and technology transfer issues (Slobodian, 2024).

In conclusion, Elon Musk's influence on U.S.-China policy presents a double-edged sword for China. While Musk's actions could exacerbate trade tensions and geopolitical risks, they also offer opportunities for China to expand its unilateral openness measures, increase scrutiny of U.S. tech companies, and strengthen domestic markets and institutions. Chinese academics' doubts about Musk's influence may shape China's strategic response to U.S. policy, encouraging a more assertive stance on trade, technology, and economic policies, as well as increased scrutiny of U.S. tech companies and a greater focus on domestic market development and self-reliance in technology.