One potentially revealing way of thinking about the respective strengths and weaknesses of the American and Chinese approaches to politics and economics is to consider the performance of their car industries.
For better or worse, the car is the “machine that changed the world”. Its manufacture remains a pivotal industry, not least for the well-paid blue collar jobs it generates. And the production of electric vehicles (EVs) is an especially consequential measure of both the technological prowess and the ability of different political systems to foster “national champions” through targeted industry policies.
Not so long ago, Donald Trump’s “first buddy” Elon Musk seemed set to sweep all before him in a stunning vindication of America’s entrepreneurial capitalism. Yet Tesla’s first purpose-built factory in Nevada not only benefitted from substantial subsidies courtesy of the state government, but the company has been plagued by continuing accusations of fraud and misrepresentation. Add to that the various technical problems and vehicle recalls and the picture looks a lot less impressive, not least because China’s EV sales have overtaken Musk’s.
Significantly, sales of vehicles produced by BYD (Build Your Dreams) overtook Tesla’s before the re-election of Trump and Musk’s unprecedented, wildly unpopular role as Trump whisperer-in-chief and head of the department of government efficiency (DOGE). Musk’s prominent, unelected, seemingly unaccountable place in the Trump administration is not only a major conflict of interest, given the importance of the China market and production sites to Tesla, but an unfortunate illustration of the unhealthy, potentially corrupt relationship between political and economic elites that has come to dominate the United States.
The concerted pushback against Musk and Tesla in America itself, as well as places such as Germany and Canada, which have been the victims of Trump’s erratic policies, has caused a plunge in car sales and a halving in the value of Tesla’s share price. There are signs that Elon may be getting the message and will return to his day job, although nothing is certain in the Trump administration. Meanwhile, Wang Chuanfu, the founder of BYD, is laughing all the way to the bank.
The fact that hardly anyone outside China has even heard of Wang is another revealing difference between the two systems. While it’s clear that both Trump and Musk are self-absorbed self-promoters intoxicated by power, Wang and even Xi Jinping, for that matter, seem relatively unassuming and technocratic by comparison.
It’s difficult to imagine Wang hanging out in Xi’s office, for example, much less taking an axe to the Chinese Communist Party’s pervasive presence in the state apparatus. Some may think this is unfortunate and a telling indictment of the Chinese system. Perhaps so. But as far as we can tell, many Chinese people still have confidence in their government. After all, poverty in China has declined remarkably, and the country is not riven by political polarisation, or teetering on the edge of growing domestic unrest and possible civil war.
Even when judged solely by the less demanding calculus of technological prowess, an area where the United States is routinely thought to have an enduring advantage, BYD’s development of a battery that can be charged in five minutes could be the proverbial game changer for BYD and the EV industry more generally. Indeed, given the growing international hostility to Musk and Tesla, this could further consolidate BYD’s dominance, not least because its vertically integrated production structure means it’s potentially not as exposed to the vagaries of Trump’s tariff policies or the decisions of external suppliers.
The disappearance and rehabilitation of Jack Ma, one of China’s most successful and prominent entrepreneurs, offers an instructive lesson in capitalist class management: pull your head in or risk decapitation.
Indeed, Musk is likely to have divided loyalties when it comes to Trump’s nationalistic economic policies and the influence of prominent China hawks like Peter Navarro. China is a key market and production site for Tesla, so Musk won’t want to jeopardise what has been a lucrative relationship with the People’s Republic. Countering the influence of the America-Firsters in the administration and convincing Trump that trade is potentially a good thing might take some doing, however. Compounding that challenge is the manner in which security concerns are increasingly raised about China’s EV technology.
Many commentators have predicted that the relationship between two such monstrous egos and potentially divided interests is bound to founder sooner rather than later. They could be right. But given Trump’s admiration for Xi Jinping, perhaps he can take a leaf from the CCP’s playbook. The disappearance and rehabilitation of Jack Ma, one of China’s most successful and prominent entrepreneurs, offers an instructive lesson in capitalist class management: pull your head in or risk decapitation. Comrade Wang has clearly taken that lesson on board. As Deng Xiaoping observed, “to get rich is glorious” – especially if you don’t upset the boss.
