Elon Musk's ties to China: Lawmaker explains why Congress is worried
Rep. Chris Stewart (R-UT) fears China and Tesla CEO Elon Musk might be getting too close.
Musk — who's also CEO of aerospace company SpaceX — isn't necessarily to blame. Stewart believes China might try to steal “incredibly innovative technologies” from SpaceX via foreign suppliers and other means, possibly without the CEO's knowledge.
“We know that they [China] can many times mask their intentions, the parties that are involved, and they're very, very effective at coming in through back doors, so to speak,” Stewart, the third ranking Republican on the House Intelligence Committee, told Yahoo Finance Live this week.
Stewart says he spoke directly with Musk about his concerns. The lawmaker is also seeking confidential briefings from the National Reconnaissance Office, the wing of the Defense department tasked with launching intelligence satellites and ensuring American security in space.
“It would be reasonable for us to want to be assured and want to be secure and know what Elon Musk's companies and what their relationships with China might be,” Stewart says. “We just want to make sure that there's not technology transfer taking place.”
The concerns, first reported in the Wall Street Journal, stem in part from Musk’s embrace of China largely on behalf of his electric vehicle company Tesla (TSLA). He has focused on the Chinese market for Tesla vehicles and has even appeared on Chinese state television as he works to get a stronger foothold there. Musk also took a $1.4 billion loan from Chinese banks for a Shanghai Tesla factory, which he says has been repaid.
The economic prosperity that China has achieved is truly amazing, especially in infrastructure! I encourage people to visit and see for themselves.
— Elon Musk (@elonmusk) July 1, 2021
The relationship between Musk and China has been far from bump-free, though. Chinese officials recently complained to the UN that its space station had to take evasive actions in space to avoid satellites launched by SpaceX’s Starlink project. Musk has also faced persistent recalls of Teslas in China — nearly 300,000 vehicles — over concerns about the cruise control system.
‘We have no reason to believe that there's anything malicious’
China also has interest in Tesla’s technology such as its batteries, but it's SpaceX that worries Stewart and other lawmakers the most. There have been covert efforts — which were eventually rebuffed — by Chinese operatives to gain access to SpaceX as a third party investor, according to Stewart.
“We have no reason to believe that there's anything malicious taking place here,” he says. “We don't think that SpaceX wants or, in any way, would deliberately share their technology and in fact, they've been a good U.S. citizen here.”
Sen. Marco Rubio (R-FL.) has also weighed in, recently introducing a bill to ban NASA and the Department of Commerce from working with companies that have suppliers with ties to the Chinese Communist Party.
“The United States should not sit idly while the CCP infiltrates American companies, steals our intellectual property, and exploits our domestically produced technology,” Rubio has said in a statement.
SpaceX didn’t respond to a Yahoo Finance request for comment on actions it's taking to protect its technology.
For his part, Stewart says he doesn’t believe new legislation will necessarily resolve his concerns.
“We have to be persistent in our oversight and in our expectation that China is going to do everything they can and they're not going to try once and just give up," he said. "They're going to try again and again and again.”
Ben Werschkul is a writer and producer for Yahoo Finance in Washington, DC.
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