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Elon Musk Makes a Very Risky Move in Asia

The CEO of Tesla, who has interests in China, just offered a plan to solve the Taiwan issue.
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Elon Musk is a businessman. 

But he has recently turned into a diplomat, proposing solutions to some of the most sensitive world conflicts.

These conflicts have the potential to redefine the balance on the international scene. And they are often defined as the clash between democracies and autocracies.

The richest man in the world sees himself as a global CEO. 

For him, it is necessary to fill the current vacuum of leadership which was created by the divorce between the people and the politicians throughout the world. Musk, who has promised to change civilization as it is today, is an admired figure around the world.

His direct and punchy style appeals to older generations and Gen Z alike. The billionaire has managed to forge a close connection with millions of people around the world via the social networks which he masters perfectly.

It is therefore no surprise that he meddles in geopolitical affairs as he feels that he owns the responsibility to do something.

Taiwan, the New Hong Kong?

"I’m trying my hardest! Perhaps more people might consider loving humanity," recently said the CEO of Tesla  (TSLA) - Get Free Report, after offering a controversial peace plan to end the war between Russia and Ukraine. "Our collective light of consciousness is a tiny candle in a vast darkness. Please do not let it go out."

The billionaire has indeed offered an unsolicited peace plan to end the conflict between Moscow and Kyiv since Russia invaded Ukraine on February 24. This plan, presented on October 3, stipulates that the Ukrainians renounce two of their regions - Crimea and Donbas - annexed and occupied by the Russians. 

Ukraine should also not pursue to become a member of the European Union and NATO. 

The plan was widely rejected by Ukrainian authorities and Twitter users whom Musk had asked to vote.

Despite this strong repudiation, the tech tycoon continues to seek solutions to prevent the conflict from turning into a nuclear war. 

Not scalded by his failure on the Ukrainian question, he has just proposed a plan to resolve the tensions between China and Taiwan.

"My recommendation ... would be to figure out a special administrative zone for Taiwan that is reasonably palatable, probably won't make everyone happy," Musk just told the Financial Times. "And it's possible, and I think probably, in fact that they could have an arrangement that's more lenient than Hong Kong."

Basically, the billionaire believes Beijing, which considers Taiwan to be a part of its territory, must have some control over the island. Taiwan currently has an independent government.

Musk Makes China Happy

Musk's remarks come at a time of tensions between the United States and China over the sovereignty of Taiwan. President Joe Biden had warned China that the United States would militarily defend Taiwan in the event of an armed conflict.

On September 28, a US Senate committee passed a bill titled the “Taiwan Policy Act of 2022.” The text provides for a sizeable increase in US military aid to Taiwan as well as a significant revision of Washington's approach to this ultra-sensitive issue, a first since 1979.

The current policy, which was adopted in 1979, intentionally leaves it unclear what the United States would do in the event of a Chinese attack on Taiwan. At the same time, it carefully refrains from recognizing any Chinese sovereignty over the island. 

The relations between Washington and Beijing became even more strained with the visit to Taiwan last August of Nancy Pelosi, the speaker of the House. This visit provoked a violent reaction from China, which almost immediately organized naval air maneuvers around the island on an unprecedented scale since 1945.

These tensions have as a backdrop the upcoming Congress of the Chinese Communist Party which, from October 16, will almost certainly see the re-election of Xi Jinping for a third term.

Unsurprisingly, China welcomed Musk's proposal, which makes Taiwan a special administrative zone à la Hong Kong.

"I would like to thank @elonmusk for his call for peace across the Taiwan Strait and his idea about establishing a special administrative zone for Taiwan," said Qin Gang, China's ambassador to the US on Twitter on October 9. "Actually, Peaceful reunification and One Country, Two Systems are our basic principles for resolving the Taiwan question."

Taiwan Says No

He added: "And the best approach to realizing national reunification. Provided that China's sovereignty, security and development interests are guaranteed, after reunification Taiwan will enjoy a high degree of autonomy as a special administrative region, and a vast space for development."

"The rights and interests of the people in Taiwan will be fully protected, and both sides of the Taiwan Strait will share the glory of national rejuvenation. Peaceful reunification of China is also conducive to peace and development in the Asia-Pacific and the wider world."

Taiwan for its part, rejected the billionaire's proposal. 

The island wouldn't accept the proposal which is "based on investment interests to turn a democratic country into a special administration," Taiwan's Mainland Affairs Council Deputy Minister Chiu Chui-cheng told Bloomberg.

Washington has yet to officially react to Musk's proposal.

China is a key region for Tesla as it seeks to dominate the global electric-vehicle market. The company owns a factory in Shanghai which is of high importance to the EV maker's global ambitions. 

Its temporary lockdown in March and April due to COVID-19 surely hurt Tesla's production and deliveries.