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China Goes Gaga Over Tesla's Musk

BEIJING (TheStreet) -- Elon Musk is getting more attention than a Korean pop star in China this week, even though his Tesla Motors (TSLA) last year sold only one-tenth of 1 percent as many cars worldwide as Chinese consumers bought.

The buzz in the media and among Chinese stock analysts is all about the fact that Musk's plans for building electric cars and solar-powered charging stations in China match the goals of Beijing, Shanghai and central government officials.

Officials want to cut auto emissions in a country where a record-breaking 22 million vehicles were sold last year. They also want to diversify the economy by promoting so-called "new energy" manufacturers of electric cars, batteries, wind turbines and the like.

Musk pushed all the right buttons by announcing that Tesla would open a research center in China and work with the cities of Beijing and Shanghai to build charging networks. His most welcome announcement was that the U.S. company might start manufacturing cars in China in three years.

The buzz began Sunday at the annual Beijing auto show, where Tesla's electric Model S took center stage. It continued Monday when Chen Weihong, the Charlie Rose of state-run CCTV television, interviewed Musk on a nationally broadcast talk show.

The American billionaire chatted with Chen about Tesla's IPO, the Paypal business, colonizing Mars, his family and selling cars in China. "China is very important for the future of Tesla's market. We'll make huge investments," Musk said. "Our sales, our services will be customized for the Chinese."

"The most important message I want to convey (is that) we believe that China is a very, very important country. We will do a lot of investing in China, to ensure that anyone who buys a car has a very good experience."

Musk made another big media splash Tuesday while meeting several buyers of the California-made Model S at a Tesla showroom in Beijing. In a private interview with Hu Shuli, a well-known business magazine editor, he said driving the decision to manufacture in China was the fact that "importing cars into China from California is not reasonable."

Indeed, Tesla has cited taxes, trans-Pacific shipping costs and import duties for a Model S sticker price in China that tops the U.S. price by more than $40,000.

The buzz was scheduled to continue Wednesday, when Musk was due to appear in Shanghai for more photo ops and handshakes. State media said he planned to meet high-level city government officials while unveiling plans to open the company's China headquarters in the city's Jinqiao district.

Meanwhile, stock analysts who've been following Musk are telling investors that Tesla's expansion is likely to open doors for all sorts of electric car-affiliated businesses that trade on the Shenzhen and Shanghai stock markets. Recommended buys this week included lithium-ion battery makers Capchem, Camel and Shanshan.

Due to low consumer interest and a lack of charging stations, China's original electric-car company BYD (BYDDY) in recent years has switched its focus to gasoline-powered vehicles. Much more successful in China are companies that make battery-powered motorbikes.

At the time of publication, the author held no positions in any of the stocks mentioned.

This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.

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