May 31, 2023: On Tuesday, shares of Tesla increased after CEO Elon Musk met with China’s Foreign Minister Qin Gang.
It comes as Beijing is pushing to show it is open to foreign business, as Musk reportedly signaled the further expansion of his car company’s business in China.
Qin, who was until recently China’s ambassador to the U.S., said “Chinese-style modernization,” represented by a vast population and “common prosperity,” will create “unprecedented growth potential and market demand,” according to a statement from the Chinese foreign ministry.
He added that China’s electric car market “has broad prospects for development” and that China will continue to open up and create a better market-oriented and law-based enterprise environment for foreign firms like Tesla.
According to the Chinese foreign ministry statement, Musk praised the Chinese people and China’s achievements. The report said that Tesla opposes “decoupling” and will continue expanding its business in China.
Shares of Tesla bounced 5% soon after markets opened before later paring gains as of 10 a.m. ET, the stock was trading at $202.93, up 2.6% for the session.
The meeting between Musk and Qin comes at a time of continued tensions between the U.S. and China over technology. Last year, Washington enacted import restrictions on critical chips and semiconductor equipment to China, which could hobble Beijing’s attempts to boost its domestic industry in indispensable technology.
This month, Chinese regulators barred operators of “critical information infrastructure” in China from buying products from U.S. chipmaker Micron.
The Chinese foreign minister on Tuesday said that a “constructive” U.S. and China relationship is in the interest of different places and the world.
On Tesla’s side, Musk’s visit on Tuesday comes as the company faces heightened competition and a price war in China. Tesla has been adjusting the prices of its cars in China amid a more challenging macroeconomic environment in the world’s second-largest economy.
The Chinese foreign ministry statement did not supply much detail on what was discussed between Musk and Qin. China is Tesla’s second-biggest market, and Musk has sought to maintain good relations with Beijing. The billionaire has pledged investments over the years and praised the country’s technology.