Elon Musk’s decision to back Kyiv comes days after Vladimir Putin ordered Russian troops into Ukraine.
Less than 48 hours later, Musk’s commercial rocket and satellite business SpaceX dispatched a fleet of Starlink satellite kits to bolster the country’s internet network in a fight against Putin’s military.
Musk has been praised by the West, but his aid is viewed differently by China, a key growth market for his business empire where Tesla earns a quarter of its revenue.
Now, the richest man on earth is facing mounting pressure from Beijing’s national security and data hawks, threatening his entry into The world’s largest consumer market.
Blaine Curcio, founder of Orbital Gateway, a specialist space technology research group, said there was “a major alarm in China” because SpaceX and Starlink are considered key parts of “the U.S. space military-industrial complex” .
Starlink has more than 2,000 satellites in low-Earth orbit, and Musk plans to add thousands more. As the constellation expands and the U.S.-China space race accelerates, experts warn the billionaire will struggle to balance the competing interests of rival superpowers.
Military planners in Beijing fear deploying thousands of Musk’s satellites to spy on China or, more sensitively, to support Taiwan, the democratic state that Beijing claims.
Drew Thompson, a former U.S. defense official, said Musk’s donation to Starlink after Russia’s invasion of Ukraine raised China’s “practicality and effectiveness” of low-Earth-orbit satellites to help strengthen communications systems during wartime.
Tesla, SpaceX and Musk did not respond to requests for comment.
‘Chaos or disaster’ in the $40 billion space race
Musk estimates that SpaceX, which is reportedly worth $100 billion, will spend as much as $30 billion to expand Starlink.
SpaceX’s dominance of the nascent commercial space market — expected to be worth nearly $40 billion a year by 2030 — has become a vital part of Musk’s expanding empire and a source of growing competition from China.
In December, Chinese diplomats complained at the United Nations that SpaceX satellites forced the Chinese space station to avoid a dangerous collision, an allegation that sparked a wave of diatribe against Musk on social media.
Criticism intensified after Putin invaded Ukraine. China Military Online, the official publication of the People’s Liberation Army, last month blasted SpaceX’s deep ties to the U.S. armed forces, including commercial contracts with the military, and slammed Starlink’s ability to “enhance the combat capabilities of the U.S. military.”
“There is a high chance that Starlink could be exploited by a hegemonic-obsessed United States to bring the world into . . . chaos or disaster,” the publication said.
The PLA research group, the Beijing Institute of Tracking and Telecommunications, went further. In April, analysts at the institute said Beijing’s defense planners should prepare a “soft and hard kill approach” to shoot down a Starlink satellite and destroy its operating system.
The threat comes as Chinese private start-ups and state-owned groups, including Galaxy Space and China Aerospace Science and Technology Corporation, are rushing to deploy their own satellite constellations into low-Earth orbit to compete with Starlink.
Dexter Roberts, a U.S.-China expert and senior fellow at the Atlantic Council, said military researchers with ties to the state are “very well aware” that Starlink “poses a threat to China.”
“Their concerns are almost certainly the same as those of the Chinese government and military,” he said.
Change the fate of “Silicon Valley Iron Man”
Beijing’s internet regulator is stepping up its focus on Tesla just as competition from Chinese electric vehicle rivals intensifies.
Tesla’s China business has been a huge success. In 2021, the company’s sales in China doubled from the previous year to $13.8 billion, compared with $23.9 billion in the U.S. and $16 billion elsewhere.
Last year, six of the world’s 10 best-selling electric cars were Chinese brands, including the low-cost Wuling and the high-end BYD. But newcomers NIO, Xpeng Motors, China Express and Jidu Motors are also challenging Tesla, pinning their hopes on a future dominated by driverless cars.
Competition has intensified as China’s powerful National Cyber Administration and a range of security-focused agencies are rolling out sweeping new data security laws that tighten controls over data collection and privacy.
Samm Sacks, a senior fellow at the Paul Tsai China Center at Yale Law School, said that “Tesla is under enormous pressure with regard to data collection in China,” especially from individuals and proximity to military or politically sensitive sites and their cross borders. data flow in the environment.
Last year, Tesla dealt a major blow to its global data collection efforts crucial to research and development by committing to store information collected in China in local data centers.
The challenges facing Tesla and SpaceX mark a clear shift in the popularity of the 50-year-old Musk in China, where he is known as the “Iron Man of Silicon Valley” and has inspired a cult following.
In 2018, he was favored and given special treatment by Beijing, launching the entire domestic electric vehicle supply chain by building Tesla’s high-end electric and self-driving car gigafactory in Shanghai.
Musk told the Financial Times in May that he believed the rise of Chinese electric car makers was a threat to his business.
Tesla’s grip on the luxury electric car market is loosening. “Tesla is good, but now that domestic cars have made great progress, Tesla is no longer needed,” said Xia Boyang, a Tesla owner in Beijing.
Musk is generally optimistic about his relationship with Chinese officials.
“I think it’s been very successful so far and the government is very happy about it,” he said of the Gigafactory, adding that he expects China to be “25-30% of our market in the long term.”
However, June Teufel Dreyer, a China expert at the University of Miami, predicts that Beijing will eventually restrict Tesla’s access to the Chinese market.
Roberts was also “sure” that Beijing would move to impose restrictions on foreign companies investing in “competitive industries, especially technology-related industries.”
He added that Beijing will “restrict business practices” [the government] deemed to have data and other security risks”.
Musk’s satellites have helped the fallen Ukrainians keep a lifeline for Kyiv and the world, but for China they fuel suspicion. Musk may find that Beijing’s goodwill has a limit.
Additional reporting by Maiqi Ding in Beijing, Cheng Leng in Hong Kong and Peter Campbell in London
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