Analysis: Will Elon Musk's Twitter Kowtow To Chinese Communist Party Influence?

When Elon Musk first notified the U.S. Securities and Exchange Commission about his desire to take over Twitter TWTR and turn it into a privately-held company, he stated, “I believe free speech is a societal imperative for a functioning democracy. Twitter has extraordinary potential. I will unlock it.”

Musk did not give details on how he would “unlock” the “extraordinary potential” at Twitter, which was founded in 2006, nor did he offer a hint of his concept of “free speech” — contrary to popular opinion, the First Amendment doesn’t apply to messaging on private sector platforms. Many people assumed Musk would be returning many Twitter-banned individuals and entities to the platform, including former President Donald Trump and The Babylon Bee news satire site, but Musk never said that was his goal.

Indeed, no one knows how Musk plans to run Twitter now that he has acquired the company. One of Musk’s most prominent critics, Amazon AMZN founder Jeff Bezos, opined: “Interesting question. Did the Chinese government just gain a bit of leverage over the town square?”

Maybe Bezos is the wrong messenger in this particular case, considering his business ties to China and his rivalry with Musk, but the message deserves attention. China’s government and several Chinese corporations working with the government’s blessings have provided the cash to support Musk’s corporate success, and he has responded with near-slavish devotion to his Beijing benefactors.

Quite frankly, what role, if any, will China’s government play in a Musk-run Twitter?

A Reason For Concern? Musk wasn’t always the world’s richest man, and on multiple occasions he received Chinese financial assistance. According to a Wall Street Journal analysis, this included loans that Musk received from Chinese banks in 2019 and 2020 plus a $1.4 billion facility to help with the construction of the Tesla TSLA factory in Shanghai.

In 2017, the Chinese company Tencent Holdings Ltd. TCHEY acquired a 5% stake in Tesla, which Musk welcomed by tweeting about how he was “glad to have Tencent as an investor and advisor to Tesla.” Tencent operates the WeChat social media app banned under the Trump administration over data privacy issues; President Joe Biden lifted that ban last June.

Last November, the Shanghai-based Leo Group attempted to make a $50 million investment in Musk’s privately held SpaceX through a partnership deal, but that fell through when the partnership was abruptly terminated after Leo Group’s input.

The extent of Chinese investment in SpaceX is not clear, and U.S. Rep Chris Stewart (R-Utah), a senior member of the House Intelligence Committee, has been seeking confidential briefings with federal agencies to ascertain the links between SpaceX and China’s government.

“I am a fan of Elon Musk and SpaceX, but anyone would be concerned if there are financial entanglements with China,” said Stewart. “Congress doesn’t have good eyes on this.”

There is also the question of how Musk is paying for this acquisition. Washington Post columnist Maureen McArdle acknowledged the news of Musk’s transaction by tweeting, “The carrying costs for the debt he's using to fund the acquisition are major, possibly as much as a billion a year. Even for Elon Musk, this is a lot of money.”

With Twitter going private, it's not inconceivable that Chinese money could help Musk pay for Twitter’s operations in a manner that is opaque to the U.S. public. But the Chinese would expect something in return for this funding — the Communist government in China has no history of freely giving without demanding a response for its generosity.

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Musk’s China Syndrome: While it's not unusual for U.S. corporate leaders to flatter Chinese officials in their pursuit of business deals, few have gone as far and as deep as Musk in cheerleading on behalf of Beijing while maintaining a stony silence when pressed about China’s problematic policies.

In a July 2020 podcast with Automotive News, Musk gushed, “China rocks in my opinion — the energy in China is great.”

In the same podcast, he took potshots at his adopted country by claiming the Chinese were “not entitled, they’re not complacent, whereas I see in the United States increasingly much more complacency and entitlement especially in places like the Bay Area, and L.A. and New York.

“When you’ve been winning for too long you sort of take things for granted,” he added. “The United States, and especially like California and New York, you’ve been winning for too long. So, just like some pro sports team they win a championship you know a bunch of times in a row, they get complacent and they start losing.”

Musk also stood out from other U.S. corporate leaders by praising the Chinese Communist Party on its 100th anniversary last year, tweeting that the “economic prosperity that China has achieved is truly amazing, especially in infrastructure!”

But when it comes to some of the less-than-stellar aspects of Chinese government actions, Musk has been elusive. After Tesla opened a dealership last December in the Xinjiang region which is the center of what human rights advocates have identified as unprecedented Chinese persecution of the Uyghur Muslim minority, Musk ignored all attempts at engagement by Twitter denizens — including Benzinga’s reporting staff — about his business dealings in Xinjiang and his concerns on the fate of the Uyghur population.

And when Chinese authorities forced Shanghai residents — including Tesla employees — into borderline-imprisonment in their homes during the current wave of COVID cases, Musk said nothing about these actions, although he was a highly vocal critic of the far-less restrictive U.S. lockdowns that took place in the spring of 2020 at the start of the pandemic, calling American authorities “fascist” for demanding “forcible imprisonment.”

Musk has also gone out of his way to host Qin Gang, China’s ambassador to the U.S., at the Tesla facility in Fremont, California. Musk curiously failed to acknowledge Qin’s visits to his 82 million Twitter followers, although the ambassador complimented Musk on his Twitter page — incredibly, China’s government shared news that Musk tried to hide.

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What To Expect: The Chinese government has made diverse attempts to influence U.S. public opinion, with not-too-subtle efforts including the Confucius Institute programs aimed at college and university students and distributing free copies of the state-run China Daily newspaper across Washington, D.C.

Beijing can also be heavy-handed, notably in its refusal to allow Marvel Cinematic Universe films from the Walt Disney Co. DIS and Sony Pictures SONY to play in China based on critical comments from filmmaker Chloé Zhao and actor Simu Liu about their homeland. All of these efforts share the common goal of shutting down a negative focus on issues that makes the Chinese leadership uncomfortable, including Xinjiang, Tibet or Taiwan.

China’s state-run Xinhua News Agency offered a four-paragraph summary of the Twitter acquisition, with one paragraph devoted to an explanation that the deal is not secured and is subject to regulatory approvals. This is rather interesting because China’s government has blocked Twitter since 2009 — another China-related fact Musk has never tweeted about — and dozens of Chinese nationals who managed to access the site to criticize their government leaders have been imprisoned — Musk never publicly acknowledged that situation.

Musk also maintains an account on the China-facing Weibo social media platform and has roughly 2 million followers. Musk’s Weibo account is severely self-censoring — he has yet to mention his actions regarding Twitter to his Weibo audience, nor has he said anything that contradicts Chinese government policy, especially in regard to his gift of Starlink terminals to the Ukrainian government or his challenges to Russian President Vladimir Putin for a physical duel.

His most recent Weibo message, from April 23, has no counterpart on Twitter: “Tesla China's work is progressing amazingly. Tesla China is doing incredible work.” What was not mentioned was that Tesla China workers are laboring 12 hours a day on a six-day work week and are forced to live in the factory and sleep on floors.

Given Musk’s track record at being over-generous with his praise of China’s leadership while staying mum on controversial issues, it's unclear if his Twitter team will be charged with erasing or shadow-banning tweets critical of China.

Of course, this would fly in the face of his great plans for “free speech” on Twitter, but Musk does have a history of saying one thing and doing another — most notably in his giddy advocacy of Bitcoin BTC/USD and Dogecoin DOGE/USD despite his continued refusal to allow Tesla buyers to make their purchases in cryptocurrency.

On Monday afternoon, Musk tweeted, “I hope that even my worst critics remain on Twitter, because that is what free speech means.” However, Musk has a reported history of firing people and terminating vendor contracts if anyone disagrees with him or goes public with criticism about him and his businesses.

Musk also blocks anyone who questions his actions on Twitter. Among those blocked by Musk are former Labor Secretary Robert Reich (after a tweet on the treatment of Tesla workers), photographer Richard Angle (after Musk posted a copyright-protected photo by Angle and refused repeated requests to give Angle proper credit), “The Moral Case for Fossil Fuels” author Alex Epstein (for sharing an article he wrote for Forbes in 2013 that questioned Tesla’s sketchy green energy claims) and 19-year-old college student Jack Sweeney (for publishing public domain information about Musk’s private jet travels — hey, doesn’t every climate change champion fly in a private jet?).

It will most likely be months before Musk receives all of the necessary clearances to put his hands on the Twitter steering wheel. But considering Chinese influence on Musk and his own erratic behavior, the question still remains: will his version of “free speech” come with asterisks that would make the new Twitter look very much like the one he is supposedly trying to restructure?

The story is only just beginning.

Photo: Thomas Hawk / Flickr Creative Commons