Dear Elon, Let's Talk Cooperation

Hi folks,

Doing an extra edition today, detailing one rather interesting article in the paper today. This one is bylined Hua Ping (华平).

It talks about the Tesla Effect as part of China’s NEV sector. The article’s purpose is to praise Tesla’s impact on China’s NEV sector and make the case for open economic cooperation between China and the US. The argument is that China’s opening benefited Tesla; Tesla’s factory and presence in the Chinese market benefited the Chinese NEV sector as a whole; and the consequent expansion of China’s NEV sector has benefited the global economy and green transition. 

Ergo, Dear Elon, your company is awesome; please let President-elect Donald Trump know that the US and China must focus on win-win and multi-win collaboration.

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“The article argues that after the Third Plenary Session of the 20th CPC Central Committee, restrictions on foreign investment in the manufacturing sector were fully lifted, demonstrating China’s confidence in steadily expanding institutional opening-up.” 党的二十届三中全会后，制造业领域外资准入限制措施全面取消，彰显了中国稳步扩大制度型开放的自信。

It adds:

“In April 2018, General Secretary Xi Jinping announced, ‘we must quickly relax foreign ownership restrictions, especially foreign investment restrictions, in the automotive industry’. Three months later, Tesla announced the construction of a factory in Shanghai, with a total investment of 50 billion yuan and planned annual production capacity of 500,000 vehicles. In January 2019, Tesla’s Shanghai Gigafactory broke ground, and in December of the same year, the first complete vehicle rolled off the production line. As the first wholly foreign-owned new energy vehicle project, Tesla’s ‘complete vehicle manufacturing’, with its ‘Tesla speed’ of starting construction, completing construction, and starting production all in the same year, provided Tesla with broad development space, and also brought a ‘catfish effect’, compelling Chinese automakers to accelerate innovation. China’s new energy vehicle production ‘exceeding 10 million annually’ has one important reason: facing fierce competition in an open environment and facing Tesla’s ‘catfish effect’, Chinese auto companies dared to confront challenges directly and actively adapted and sought change. Developing real capabilities through open competition, today’s China has become the world’s most active industrial center for new energy vehicle technological innovation. In 2023, China’s automobile exports jumped to first place globally, among which new energy vehicle exports exceeded 1.2 million units, increasing by 77.6% year-on-year.” 2018年4月，习近平总书记宣布，“要尽快放宽外资股比限制特别是汽车行业外资限制”。3个月后，特斯拉宣布在上海建厂，总投资达500亿元，规划年产能50万辆。2019年1月，特斯拉上海超级工厂奠基，当年12月第一辆整车下线。作为首个外商独资新能源汽车项目的特斯拉“整车制造”，当年开工、当年竣工、当年投产的“特斯拉速度”，为特斯拉提供广阔发展空间，也带来“鲇鱼效应”，倒逼中国车企加快创新. 中国新能源汽车数量“年产过千万”，一个重要原因就在于，面对开放环境下的激烈竞争，面对特斯拉的“鲇鱼效应”，中国车企敢于直面挑战、积极应变求变。在开放竞争中练就真本事，今天的中国成为全球新能源汽车技术创新最活跃的产业中心。2023年，我国汽车出口量跃居全球第一，其中新能源汽车出口逾120万辆，同比增长77.6%。

The article then makes the following points:

• Starting from November 1, the new version of the negative list for foreign investment access will be implemented. The number of restrictive measures will be reduced from 31 to 29. This means that China has the firm determination to promote a higher level of opening up, and is brave enough to enhance its openness in expanding international cooperation and win new advantages in international competition. 11月1日起，新版外资准入负面清单施行，限制措施由31条压减至29条。这意味着中国具有推动更高水平开放的坚定决心，勇于在扩大国际合作中提升开放能力，赢得国际竞争新优势。

• China’s NEV sector’s growth is a product of “integration of scientific and technological innovation and industrial innovation.” And they have “achieved a strong rise, transitioning from running alongside others to leading the way in terms of production and sales, core technologies, and levels of intelligence.” 从发展的基石看，这个“年产过千万”建立在科技创新与产业创新加快融合的基础之上。中国一批新能源汽车自主品牌实现了强势崛起，在产销量、核心技术、智能化水平等方面实现了由并跑变领跑.

• China’s NEVs hitting the 10 million production volume is a “‘green milestone’ for the global new energy industry.” Green and low-carbon development is a universal trend, which cannot be blocked by ‘small yards and high walls’. In the first three quarters of this year, China exported a total of 928,000 NEVs, a year-on-year increase of 12.5%. Faced with ‘additional tariffs’ and other big sticks, global consumers have used their actions to express their love for quality products and their pursuit of green and low-carbon concepts.” 绿色低碳发展是潮流、是大势，不是“小院高墙”所能阻挡的。今年前三季度，我国新能源汽车累计出口92.8万辆，同比增长12.5%。面对“加征关税”等大棒，全球消费者用行动表达了对优质产品的喜爱、对绿色低碳理念的追崇.

It then says:

“Cooperation and mutual benefit are the right path and broad way, while isolation and exclusivity are dead ends. Only through cooperative win-win can things be accomplished, be done well, and be done on a grand scale. Leveraging advantages in technology and brand, and backed by China’s super-large-scale consumer market, Tesla’s substantial sales growth has driven rapid development of upstream and downstream industry and supply chains. Today, Tesla’s Shanghai Gigafactory has achieved a localization rate of parts exceeding 95%, and more than 60 suppliers have entered Tesla’s global supply chain system. Relying on China’s perfect supply chain system and first-class intelligent manufacturing capabilities, Tesla’s Shanghai Super Factory has an average of one vehicle rolling off the assembly line every 30 seconds. In 2023, the output of Tesla’s Chinese factory accounts for more than half of its global production capacity, of which 36% caters to the export market. Tesla’s success in the Chinese market is a process of mutual and multi-win collaboration, aligning with the global division of labour in industrial and supply chains in the era of economic globalisation. It exemplifies the philosophy of cooperative win-win outcomes and harmonious coexistence.”

“Today, more and more multinational car companies are utilising the advantages of China’s market, technology, and policy openness to achieve the transformation of ‘in China, for the world’. In Hungary, Spain, Myanmar, Malaysia, Brazil ... Chinese new energy vehicle companies are establishing overseas factories to promote green cooperation and facilitate the green, low-carbon transition in more countries and regions. On the evening of November 14, the Peruvian Chancay Port, a key BRI project jointly built by China and Peru, opened. As South America’s first intelligent green port, its operation will create over 8,000 direct jobs annually for Peru, generate $4.5 billion in revenue, and mark the emergence of the new Asia-Latin America land-sea corridor in the new era. ‘From Chancay to Shanghai’, from win-win to multi-win. Human society is closely linked, and the greatest consensus on win-win and multi-win cooperation is the future.” 合作共赢是正道大道，封闭排他是死胡同。只有合作共赢才能办成事、办好事、办大事。凭借技术、品牌等优势，背靠中国超大规模消费市场，特斯拉销量的大幅增长，带动了上下游产业链供应链快速发展。如今特斯拉上海超级工厂零部件本土化率已超过95%，超过60家供应商进入特斯拉全球供应链体系。依托中国完善的供应链体系和一流的智造能力，特斯拉上海超级工厂平均30多秒就有一辆整车下线。2023年，特斯拉中国工厂的产量在其全球产能中占比过半，其中36%对外出口。特斯拉在中国市场的成功，正是一个双赢、多赢的过程，顺应的是经济全球化时代产业链供应链全球分工的大趋势，彰显的是合作共赢、和合共生的理念。今天，越来越多的跨国车企利用中国市场、技术和制度开放等优势，实现了“在中国，为世界”的转变。在匈牙利，在西班牙，在缅甸，在马来西亚，在巴西……中国新能源车企海外建厂促进绿色合作，带动更多国家和地区绿色低碳转型。当地时间11月14日晚，中秘共建“一带一路”重点项目秘鲁钱凯港开港。这座南美首个智慧绿色港口投入运营后，每年将为秘鲁创造逾8000个直接就业机会，带来45亿美元收入，新时代亚拉陆海新通道破浪而出。“从钱凯到上海”，从双赢到多赢。人类社会休戚相关、福祸相依，凝聚共赢、多赢的最大共识才有未来.

“Chinese-style modernization is modernization on the path of peaceful development. Based on the concept of win-win cooperation, we continue to provide new opportunities for world development with new achievements in Chinese-style modernization, and are willing to work with all parties to promote the realization of world modernization of peaceful development, mutually beneficial cooperation and common prosperity. Great opening up brings great development, and high-level opening up promotes high-quality development. In opening up, we have not only acquired real skills, but also greatly enhanced our confidence in development. Having faced countless risks and challenges, by steadfastly expanding openness and focusing on managing our own affairs well, we have ultimately turned dangers into safety and crises into opportunities. Using openness to drive reform and promote development, today’s China is more resilient and steadfast than ever. By working together globally and embracing harmonious coexistence, and with an even more open and inclusive mindset, the world will surely reach its next ‘green milestone’ more quickly.” 中国式现代化是走和平发展道路的现代化。本着合作共赢的理念，我们不断以中国式现代化新成就为世界发展提供新机遇，愿同各方一道努力推动实现和平发展、互利合作、共同繁荣的世界现代化。大开放带来大发展，高水平开放促进高质量发展。在开放中，我们不仅练就了真本事，更极大增强了发展的自信心。历经多少次风险挑战，坚定不移扩大开放，集中精力办好自己的事，我们最终都化险为夷、化危为机。以开放促改革，以开放促发展，今天的中国，更加富有底气和定力。同球共济、和合共生，秉持更加开放包容的胸襟，世界一定能更快迎来下一个“绿色里程碑”。