IN FOCUS
By Keerthana Nambiar

China, Tesla and Xinjiang: Where profits matter

The premise
On 31 December, Elon Musk’s company Tesla opened a new showroom in the capital of Xinjiang region, Urumqi. Tesla announced: “On the last day of 2021, we meet in Xinjiang. In 2022 let us together launch Xinjiang on its electric journey” on the Chinese social media network Weibo along with photos of opening festivities and placards reading “Tesla [heart] Xinjiang.”

The US has enacted several sanctions and regulations against China on the basis of accusations of human right violations in Xinjiang. The opening of the new Tesla showroom drew a lot of criticism from the US, but garnered some support on Chinese social media.

Tesla and reactions from the Chinese state and social media
Xinjiang is the site for controversial accusations of human right violations by the Chinese authorities on the Uyghur Muslims- ethnic minorities brought into light by the US. China unreservedly denies the allegations of human rights issues and terms it as ‘anti-China’ moves and sees it as a tactic by the Western countries to hinder China’s development. In Tesla’s case, the Chinese social media helped the company gather support for the new showroom.

On Weibo, one user posted: "Thank you for expanding in Xinjiang, happy new year!". Another said: "You see, Tesla supports the development and construction of Xinjiang, unlike some companies.  

On the other hand, the announcement drew condemnation from Muslim activist groups. National communications director of the D.C.-based Council on American-Islamic Relations, Ibrahim Hooper said: “No American corporation should be doing business in a region that is the focal point of a campaign of genocide targeting a religious and ethnic minority.” He further added that “Elon Musk and Tesla must close this new showroom and cease what amounts to economic support for genocide.”

In April 2021, Tesla faced mounting pressure from Chinese state media following a woman’s protest at a major automobile show. The woman wore a t-shirt which read “brakes don’t work” claiming of a brake failure in her car which created momentum among social media wherein many Tesla drivers added their issues. Tesla responded to the accusations as ‘unreasonable demands’ which was heavily criticized by state media followed by the Chinese government’s warning statements. The negative press that Tesla had received in China a few months ago has now been minorly repaired with the recent move on the showroom.

Tesla’s stance: A profit affair
Tesla is supporting the development of Xinjiang unlike other Western companies who are reducing the business links with Xinjiang over the sanctions. The new showroom outraged the West claiming the move represents Tesla’s stance on the human rights issue, rather can be considered as supporting the violations on the minority groups. Despite the recent developments between China and Tesla, the latter’s electric cars remain popular with the reported sales of USD 3.11 billion in the third quarter of 2021. China’s overall share increased from 20 percent in 2020 to 22.6 percent in the third quarter of 2021.

Tesla is the poster child for China’s efforts of letting in foreign companies into domestic markets and for Tesla, the leadership in the Chinese market. 

References
“China berates US after ‘close encounters’ with Elon Musk satellites,” The Guardian, 28 December 2021
“China urges U.S. to act responsibly in space after SpaceX satellites endanger space station,” CGTN, 28 December 2021
“Elon Musk rejects mounting criticism his satellites are clogging space,” The Guardian, 30 December 2021
“Tesla’s China sales have grown to nearly half the size of the company’s U.S. sales,” CNBC, 26 October 2021
“Tesla criticised for opening showroom in Xinjiang despite human rights abuses,” The Guardian, 4 January 2022
“Tesla faces criticism for opening showroom in China’s Xinjiang province, where Uyghurs face persecution,” Washington Post, 4 January 2022

IN BRIEF
By Avishka Ashok and Dincy Adlakha 

INTERNAL
China’s NEA shows an increase in power usage in 2021
On 18 January, China’s National Energy Administration (NEA) released its data on the total power used in China in 2021. The data shows that China reached 8.31 trillion kilowatt-hours representing a growth of 14.7 percent with an average of 7.1 percent for two years. The NEA said: “power consumed by the primary, secondary and tertiary industries climbed 16.4 percent, 9.1 percent and 17.8 percent year on year, respectively.” Data also shows that in 2021 had an increase of residential power consumption of 7.3 percent year-on-year increase to 1.17 trillion kWh. China’s gross domestic product expanded to 8.1 percent year on year to 114.37 trillion yuan in 2021. (“China's power use surges 10.3 pct in 2021,” Xinhua Net, 18 January 2022)

China launches a new freight train route between east China and Moscow
On 18 January, Xinhua reported that a new cargo train departed from Quanzhou, east China’s Fujian Province loaded with 445 tonnes of goods and was headed to Moscow. Chen Hanhe, chairman of Mega Soft (China) Co., Ltd said, “The new train service will significantly lower our transport costs.” The train route has historical significance as it is the starting point for the Maritime Silk Road. According to Zhang Xiohong, director of Quanzhou’s bureau of commerce, in 2021 Quanzhou’s export volume increased up to 31.5 billion US dollars. (“New cargo train route between east China, Moscow opens,” Xinhua Net,18 January 2022)

Chinese Vice Premier made remarks on containment of COVID-19 outbreaks
On 17 January, Chinese Vice Premier Sun Chunlan made remarks on the swift containment of COVID-19 outbreaks. Sun urged the local anti-epidemic authorities to improve efficiency and stay alert for containing the cluster of cases before the Chinese New Year. His remarks were made while “researching and directing the anti-epidemic work in north China's Tianjin” and added that Tianjin made a progress in containing the Omicron variant. Sun called in for measures to be taken for screening procedures and early detection of infections. (“Chinese vice premier stresses swift containment of COVID-19 outbreaks,” Xinhua Net, 18 January 2022)

Ministry of Ecology and Environment releases its plan for marine protection
On 17 January, the Ministry of Ecology and Environment released its plan for protecting the marine environment. The plan is a part of the 14th Five-Year Plan 92021-2025) and involves action by five other departments. The Ministry said: “During the 13th Five-Year Plan period (2016-2020), China saw an overall improvement in its marine environment but more protection efforts should be made, given that problems such as pollution and ecological degradation remain prominent, and governance systems and capacities still need to be strengthened.” (“China outlines marine-protection tasks for 2021-2025,” Xinhua Net, 17 January 2022)

ECONOMY
The Chinese yuan weakens against the leading currencies
On 18 January, China Foreign Exchange Trade System (CFETS) announced that Chinese currency yuan weakened “against a basket of currencies” reported Xinhua. Chinese yuan was on the course of performing to be the best for the two consecutive years but the yuan conversion weakened last week. According to CEFTS, “The CFETS yuan exchange rate composite index, which measures the yuan's strength relative to a basket of currencies, lost 0.84 points to 102.14,” added Xinhua. The index was compared with the rest of the leading currencies like US dollar, euro and Japanese yen. (“Chinese yuan weakens last week,” Xinhua Net,18 January 2022)

REGIONAL
Freight rail services resume between China and North Korea
On 17 January, the Chinese Foreign Ministry spokesperson Zhao Lijian announced that the freight train between China and North Korea had resumed its services after being shut for months due to the coronavirus pandemic. Zhao explained that after much consideration by both countries, the authorities had decided to reopen the rail port in China’s Dandong and North Korea’s Sinuiju. He said: “The two sides will facilitate normal trade on the basis of epidemic prevention and safety.” (“China, North Korea resume rail freight, to facilitate normal trade,” Global Times, 17 January 2022)

INTERNATIONAL
Premier Li and German Chancellor pledge to improve relations 
On 17 January, the Chinese Premier Li Keqiang held a telephonic conversation with the German Chancellor Olaf Scholz and promised to deepen their bilateral relations in the coming years. Premier Li urged Germany to open their mind to China and Chinese investments. Li reasoned that Germany’s relations with China will not just benefit the two countries but also ameliorate China’s relations with Europe. Premier Li said: “Governments of the two countries should strive to create a fair and non-discriminatory environment for businesses from both side.” (“Chinese premier and German chancellor vow to further boost ties during phone call,” Global Times, 18 January 2022)

President Xi delivers a speech at the World Economic Forum
On 17 January, President Xi Jinping delivered a speech at the World Economic Forum and warned the countries against containment, confrontation and suppression, hegemonic practices and bullying. He urged the member countries to peacefully resolve issues to achieve win-win results. The speech international speech was the first by the Chinese President in 2022. (“No ‘countercurrents’ can stop globalization trend: Xi,” Global Times, 18 January 2022)