Elon Musk makes unexpected China visit as Tesla fights local rivals

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Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

Good morning. Elon Musk made an unexpected visit to Beijing yesterday to meet China’s premier as Tesla contends with declining sales and data security concerns in the world’s biggest car market.

Musk met Li Qiang, China’s number two leader, as the electric vehicle maker’s chief sought to overcome recent setbacks — including in China — by refocusing Tesla on artificial intelligence with a planned “robotaxi” service.

China is Tesla’s second-biggest market after the US. But sales have been sliding this year and Musk’s ambitions to boost Tesla’s appeal with new autonomous driving capabilities have been curtailed due to Chinese restrictions on the use of customer data.

The visit came little more than a week after Musk abruptly cancelled a trip to India, where he had been expected to meet Prime Minister Narendra Modi.

It also took place at a time of heightened trade tensions between Beijing and Washington, particularly over technology. But Chinese state media reported that Li described Tesla’s business in the country as a “successful example” of economic and trade co-operation with the US. FT China correspondent Edward White has more on Musk’s surprise visit to Beijing.

Here’s what else I’m keeping tabs on today:

• Economic data: Vietnam releases April CPI, industrial output and trade balance data. Thailand publishes trade figures and South Korea reports department store sales.

• Spanish prime minister: Pedro Sánchez is due to announce whether he will resign from office. Last week, Sánchez said he was considering quitting after a judge opened a preliminary investigation into his wife over accusations of corruption.

• Results: China Construction Bank, PetroChina and the Industrial & Commercial Bank of China report first-quarter earnings.

• Japan: The Golden Week holidays begin. Today financial markets are closed for Shōwa Day.

Five more top stories

1. The commander of US forces in the Indo-Pacific region has accused China of pursuing a “boiling frog” strategy, raising tensions in the region with increasingly dangerous military activity. “This is [China’s] pressure campaign in action. I’ve watched it increase in scope and scale, it is not slowing down,” retiring Admiral John Aquilino told the FT. Read the full interview for more on US-China relations, spy balloons and what Aquilino said was the most nerve-racking incident during his command.

• US-China competition: Concern over China’s economic clout has created “a hell of a chance” for the US to pass legislation paving the way for more free trade deals with Latin American countries, said President Joe Biden’s special adviser for the region.

2. A rally in Chinese government debt has sparked alarm among regulators in Beijing, who warn that regional banks’ appetite for the bonds risks a crisis similar to the collapse of Silicon Valley Bank last year. The People’s Bank of China has signalled its discomfort over the scale of the banks’ move into long-dated sovereign bonds, which are vulnerable to moves in interest rates — as was SVB’s portfolio of US Treasuries.

• Chinese economy: Factory profits in China have retreated from a two-year high, according to official data, highlighting concerns that industrial overcapacity is complicating Beijing’s efforts to revive momentum in the economy.

3. Baltic ministers have warned that GPS jamming blamed on Russia risks causing an air disaster as incidents of interference with navigation signals have increased recently. Last week, two Finnish flights were forced by the GPS jamming to turn around mid-journey as they were unable to navigate safely to their planned destination.

• More Russia news: Russian police have launched a fresh crackdown on associates of deceased Kremlin critic Alexei Navalny, arresting two more journalists on charges of working in the past with the media team of the opposition leader.

4. Israel has said that it would be willing to delay a long-planned assault on Rafah, Hamas’s last stronghold in the Gaza Strip, if a deal to secure the release of Israeli hostages can be agreed. But in a sign of the domestic political hurdles ahead of any deal, Israel’s foreign minister said that any ceasefire should not harm Israel’s war aim of eliminating Hamas. Here’s the latest on the Israel-Hamas war.

5. Paramount is preparing to fire chief executive Bob Bakish, adding more uncertainty at the Hollywood group controlled by Shari Redstone as it holds merger discussions with Skydance Media and prepares for another potential bid, according to three people familiar with the matter. Bakish, previously viewed as a loyalist to Redstone, has clashed with her over the Skydance offer. Read more on the drama at Paramount.

FT Magazine

As an anthropologist, Rahile Dawut’s life was devoted to the preservation of cultural diversity across China’s vast Xinjiang region. The famed Uyghur academic regularly travelled hundreds of kilometres from the capital Ürümqi to isolated villages to document the at-risk culture of the local Mazar. Then, in December 2017, Rahile disappeared. Her case has become emblematic of the Chinese government’s crackdown on the Uyghur people and its obliteration of Islamic culture. Edward White tells the story of a remarkable life — and the fight for Dawut’s freedom.

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