Newsletter 164 - May 14, 2023
Welcome to the 164th edition of Trade War.
China’s market regulator has ordered Tesla to fix a breaking and acceleration flaw affecting almost every car the U.S. company has made in the country. LinkedIn shuts its last major business in China cutting 716 jobs. And consultancy Forester prepares to lay off most of its mainland staff as Beijing business crackdown widens.
Cash-strapped local governments struggle to woo investment as foreign companies feel increasingly unwelcome in the country. The Economist asks: Has China peaked? and earlier bullish bank predictions about its inevitable rise look ever more naive.
China’s imports dip but high-end goods, including electric vehicles, still strong. ‘Small-time earner youth’ is a new phrase to describe China’s struggling young people. And Jake Sullivan and Wang Yi meeting has some hoping for a U.S.-China political thaw.
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Tesla recalls China-made cars
China’s market regulator has ordered Tesla to fix an acceleration and breaking flaw affecting almost every car the U.S. company has made in the country.
“The automaker will deploy an over-the-air software fix to more than 1.1 million vehicles produced in Shanghai from January 2019 to April this year, plus some models imported into China,” reports Bloomberg News, citing a statement (Chinese) by the State Administration for Market Regulation.
Tesla has had its share of previous challenges in China, including earlier episodes when drivers also complained of problems with acceleration and braking. Probably most notable was when a woman climbed upon a Tesla display at the 2021 Shanghai Auto Show, yelling that her family members had almost died due to a brake failure in a Tesla Model 3. More recently, in November of last year, the crash of a Model Y sport utility vehicle killed a motorcyclist and a high school student on a bicycle, and injured three people.
China is extremely important for the Austin-based company, both as a market which brought in $18 billion last year (Tesla has sold some 1.13 million cars in China from 2014 through March of this year), and as a manufacturing base that produced 711,000 cars last year from its Shanghai plant, more than half its global output.
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