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Realized the dream
The first camp includes Apple, Boeing, Airbus, Tesla, and Starbucks, which made huge amounts of money by selling into China or making things there and selling them elsewhere. Tesla builds more than half of its EVs in China. The competition is catching up, though: BYD and a whole flock of other Chinese EV makers keep looking better.
Losing the dream
The second camp is made up of companies that realized the dream and now watch it slip away, including Volkswagen, BMW, and Mercedes. Nvidia may belong here too, since US restrictions and Chinese restrictions on its chips have cut into what it earns there.
Never got there
Microsoft sits in the third camp: a big Western company that dared to dream the dream and never realized it. It is worth about 3.7 trillion US dollars, more than the top 10 Chinese companies put together, and China accounts for just 1.5 percent of its global revenue.
Why does Tesla build so many cars in China?
Tesla opened its Shanghai factory in 2019, the first wholly foreign-owned car plant in China, after Beijing lifted its ownership cap for electric vehicle makers in 2018. Building in Shanghai put Tesla next to a deep network of battery and parts suppliers. The plant sells to Chinese buyers and also ships cars to other markets in Asia and Europe.
Why did foreign carmakers need Chinese partners?
For decades China limited foreign carmakers to a 50 percent stake in any passenger car venture, which forced them to partner with local state-owned makers. Volkswagen worked with SAIC and FAW, and BMW with Brilliance. China was Volkswagen's largest single market for years. Beijing removed the ownership cap for passenger car makers in 2022.
How do chip export controls work?
In October 2022 the US Commerce Department issued rules restricting exports of advanced computing chips and chipmaking equipment to China, and it expanded them in 2023. The rules apply to chips above certain performance thresholds, so companies design versions that fall under the limits. China has also restricted exports of materials used in chipmaking, including gallium and germanium, since 2023.
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