Elon Musk hopes China will chill out

Asked Monday evening at The Wall Street Journal’s CEO Council summit about his views on China’s economic position in the world, Musk expressed hope that the country—an authoritarian state responsible for imprisoning more than a million Uighurs, stealing trade secrets from U.S. companies, engaging in a sweeping crackdown of its domestic tech industry, and enshrining President Xi Jinping as a forever-leader—will just mellow out, man.

“We’re headed toward a situation where China is probably going to have an economy two to three times larger than the United States. That’s just a different world,” Musk said. 

“I do think there are a lot of people in the government of China who grew up with China being a smaller economy, and maybe who feel like China was pushed around a lot, but they haven’t fully appreciated that China is going to be the big kid on the block. And so if you’re going to be the big kid on the block, you can really be pretty chill about things. Other countries are not really a threat to you if you’re by far the biggest kid on the block. I would say that’s kind of an important mindset change, hopefully, that China goes through.” 

Musk continued his schoolyard analogy by invoking the Golden Rule, hypothetically asking the Chinese government, ”If you are going to be the biggest kid on the block, then wouldn’t you want to behave like you wanted the biggest kid on the block to behave?”

A favorable reading of Musk’s comments would suggest that the world’s richest man is, as much as he can, prodding the Xi administration to cool it with the ethnic cleansing and economic interventionism, while also maintaining Tesla’s valuable footprint in China. 

After all, Musk and nearly every other executive profiting from cheap Chinese labor and favorable subsidies turns the other cheek on human rights violations there. Example A: Apple inked a five-year, $275 billion deal to bolster the Chinese economy in 2016, when government regulators were taking actions that weighed down iPhone sales there, according to a blockbuster story published Tuesday by The Information.

But it’s hard to believe that Musk truly thinks China will suddenly see the light. While nearly 50 years of economic diplomacy have helped raise China’s citizens from extreme poverty, the government’s stranglehold on personal and economic freedoms remains strong as its global sphere of influence grows. Tesla knows this all too well, as The Wall Street Journal reported last week that the Chinese government has already started tightening its grip on the U.S. automaker. 

“To a degree still difficult for outsiders to absorb, China is preparing to shape the twenty-first century, much as the U.S. shaped the twentieth,” The New Yorker’s Evan Osnos wrote last year in a defining account on the Washington-Beijing relationship. “Its government is deciding which features of the global status quo to preserve and which to reject, not only in business, culture, and politics but also in such basic values as human rights, free speech, and privacy.”

We should pay little mind to prophecies on China’s long-term outlook from Musk or other economically-compromised business executives, whose obligations lie with their shareholders, employees, customers, and personal bank accounts. Rather, we should let their actions dictate whether they were on the right side of history.

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Jacob Carpenter

NEWSWORTHY

Throwing Congress an early bone. Instagram said Tuesday that it will roll out several new features designed to bolster privacy and reduce the platform’s negative impact on teens using the social media platform, CNBC reported. The announcement comes a day before Instagram head Adam Mosseri is scheduled to testify before a U.S. Senate subcommittee on consumer protection in response to recent media leaks that showed the product can be harmful to children. The most notable immediate changes to Instagram include a wide-scale rollout of its “Take A Break” feature, which asks users whether they want to log-off after a lengthy period of scrolling. Instagram also plans to give parents more control over their Instagram accounts, including the option to set time limits, starting early next year.

Early intel on Mobileye IPO. Semiconductor giant Intel plans to spin off and hold an initial public offering next year for its self-driving car unit, Mobileye, in an effort to capitalize on investor interest in a hot sector. Officials familiar with the matter told The Wall Street Journal that an IPO could put Mobileye’s value at more than $50 billion, triple the amount Intel paid to acquire the Israeli company in 2017. Mobileye produces chips for camera and safety systems while also developing autonomous vehicles. The planned move, which is not guaranteed to go through, would mark another step in Intel’s business reboot after several years of hiccups.

Microsoft drops a dime on Nickel. Microsoft has taken control of 42 websites tied to a Chinese hacking group after a federal judge in Virginia gave the company permission to seize the sites, The New York Times reported Monday. A five-year surveillance operation of the group, known as Nickel, prompted Microsoft officials to seek control of the sites as hackers ramped up their cyberattacks on unnamed government agencies, human rights groups, and other organizations. Company leaders argued they were entitled to seize the websites because the hackers illegally gained access to Microsoft operating systems used by customers and connected those networks to malicious sites. Microsoft officials said the hackers did not exploit previously unknown vulnerabilities that would impact other customers.

New Delhi aims to cancel crypto. Indian legislators have prepared legislation that would ban all things cryptocurrency in the country and leave violators jailed without bail, Reuters reported Tuesday. The bill, which has not yet been introduced, follows Indian Prime Minister Narendra Modi’s call last month for international governments to heavily regulate cryptocurrency. Under the proposed legislation, the Indian government would ban crypto holding, mining, and selling. Proponents of the bill argue that India must protect its current currencies and stave off potential corruption in cryptocurrencies.

FOOD FOR THOUGHT

Refugees look to make a legal point. Myanmar’s Rohingya refugees filed a class-action, $150-billion lawsuit Monday in California against Facebook, alleging the company failed to curb hate speech that led to mass killings, rapes, and the displacement of more than 700,000 Muslims, Reuters reported. The lawsuit puts a spotlight back on Facebook’s failure to police posts calling for violence against members of the Rohingya community, which Facebook officials conceded that they were slow to take down. However, the refugees likely face a daunting legal battle in the U.S., where Facebook and other social media groups enjoy broad protection.

From the article:

Facebook has said it is protected from liability over content posted by users by a U.S. internet law known as Section 230, which holds that online platforms are not liable for content posted by third parties. The complaint says it seeks to apply Myanmar law to the claims if Section 230 is raised as a defense.

Although U.S. courts can apply foreign law to cases where the alleged harms and activity by companies took place in other countries, two legal experts interviewed by Reuters said they did not know of a successful precedent for foreign law being invoked in lawsuits against social media companies where Section 230 protections could apply.

Anupam Chander, a professor at Georgetown University Law Center, said that invoking Myanmar law wasn't "inappropriate." But he predicted that "it's unlikely to be successful," saying that "it would be odd for Congress to have foreclosed actions under U.S. law but permitted them to proceed under foreign law."

IN CASE YOU MISSED IT

Elon Musk says federal government should ‘get rid of all subsidies’—despite Tesla receiving billions in support, by Rey Mashayekhi

Computer scientist who claims to be Bitcoin inventor Satoshi Nakamoto wins lawsuit over $57 billion crypto fortune, by Nathan Crooks, Jonathan Levin, and Bloomberg

AgentSync, a startup born out of a messy Silicon Valley crisis, is now a unicorn, by Matthew Heimer

Honeywell’s former quantum unit announces its first commercial product—and it’s totally random, by Jeremy Kahn

Devin Nunes to leave Congress to lead Trump’s media startup, by Mark Niquette, Mario Parker, and Bloomberg

The Microsoft paradox: Contributing to cyber threats and monetizing the cure, by Ryan Kalember

Here’s how I signed up for the metaverse, by Felicia Hou

BEFORE YOU GO

The dark web judge will see you now. Even cybercriminals got to have a code, apparently. A new study released Tuesday by cybersecurity firm Analyst1 shines light on an unofficial judicial system employed by hackers, fraudsters, and swindlers to resolve disputes between Internet do-no-gooders. An example case: a ransomware cartel stiffs a hacker, the hacker brings the case to an encrypted network, and an anonymous server moderator serves as judge and jury. The system, ironically, lends some legitimacy to criminals looking for potential hacking partners.