Chinese investors privately take stakes in Elon Musk’s companies

When Tesla tanks, China will buy its remnants at fire-sale prices.

archive.ph - link without registration wall

The investments are being placed through opaque structures known as special-purpose vehicles, which have the benefit of concealing the investors’ identities, to avoid the ire of US authorities and companies wary of Chinese capital during a nadir in relations between the two countries.

Asset managers behind the deals have told investors that the entities are specifically designed to avoid disclosure. The use of special-purpose vehicles in financing is commonplace and there is nothing illegal about the arrangements.

Still, it raises concerns about the potential for undue influence and conflicts of interest at a time when Musk has unprecedented involvement in US policy, politics and business.

Funnily enough, to me personally, there are more questions about what this means concerning Chinese politics and conflicts of interests in the future. The country is not without its own tensions, after all.

The inflow of Chinese capital into Musk’s business empire is primarily profit-driven and has little to do with technology transfer or influencing public policy, according to people involved in the transactions.

With a sluggish domestic economy, wealthy Chinese are looking abroad for investment opportunities.

To me, personally, it serves as a reminder that no amount of red flags waved or social-democratic laws saying "wealth is going to serve the interests of the working class" makes a country communist, only material realities can.

This is what Canadian and European rivals of the US should have been doing for some time, and should be doing now.