MULTINATIONALS: Microsoft, Tesla China Woes Go Missing As Gates, Musk Attend Local Pow-wow
Bottom line: The failure of 3 major tech leaders to discuss issues confronting their companies at a major forum in China reflect a Chinese preference to avoid thorny issues in public and instead focus on more trivial matters.
It’s not often that 2 of the hottest US tech personalities can share the stage with one of China’s biggest Internet names and fail to say anything newsworthy. But that’s exactly what has happened in the southern Chinese city of Bo’ao, where Microsoft (Nasdaq; MSFT) founder Bill Gates and Elon Musk, CEO of electric car sensation Tesla (Nasdaq: TSLA), failed to say much of interest as they shared the stage in a dialogue hosted by Robin Li, founder of leading Chinese search engine Baidu (Nasdaq: BIDU).
The lack of insight is even more notable because both Microsoft and Tesla have faced big challenges in China lately, as the former comes under scrutiny for tax evasion and monopolistic practices, and the latter has fallen far short of its ambitious sales targets. But then again, Robin Li isn’t a reporter, and embarrassing his 2 high-profile guests about their recent woes probably wasn’t one of his big priorities as the at 3 men met at the annual Bo’ao Forum in southern Hainan province.
Still, the lack of any discussion of Tesla’s or Microsoft’s woes testifies somewhat to the kind of “land of make-believe” that some of China’s top tech executives inhabit. That land is one where underhanded battles frequently occur, as executives resort to tactics like intellectual property violations and development of manipulative products to undermine their competitors. They seldom talk publicly about these things, though such matters do occasionally pop up in the legal system in the form of lawsuits involving the constant battles taking place behind the scenes.
I was quite excited to see the names of Gates, Musk and Robin Li appear in the headlines of some of my favorite Chinese news sites as the new work week began, and looked forward to reading insights from these industry leaders. But a quick review of English websites showed that none had even mentioned the discussion between the trio in their coverage, even though all major western media send reporters to the Bo’ao event.
A quick look at the Chinese headlines revealed why the western media ignored the dailogue, as it became painfully obvious that even the Chinese struggled to find anything newsworthy from this meeting of major minds. One story led with the fact that Robin Li, who hosted the session, had gotten more than 500 suggested questions to ask Gates and Musk when he solicited the public before the event. (Chinese article) Another led with comments from Gates on his philosophy about inheritances, and Musk saying it would be at least 5 years before driveless car technology matures. (Chinese article)
Those relatively benign remarks came just days after Musk gave slightly more substantive comments in an interview with China’s official Xinhua news agency, saying Tesla was planning to localize some of its car production in China in the next 3 years. (English article) The subtext to that story is that Tesla is looking for a new formula in China after stumbling badly during its first year in the market.
Tesla recently completed a major overhaul of its Chinese operations, including big layoffs and the departure of its China head. (previous post) The company had previously hoped to sell as many as 4,000 to 8,000 of its high-end electric cars in China each year, but only managed to notch 120 vehicle sales in January.
Microsoft’s story also looks shaky, with the company currently under investigation by 2 separate Chinese regulators. One story has Beijing tax officials saying an unnamed company, which was widely cited as Microsoft, was being investigated for owing 840 million yuan ($137 million) in unpaid taxes. (previous post) The other has Microsoft being probed by one of China’s antitrust regulators for monopolistic practices, in the latest of a series of similar probes against foreign firms in China. (previous post)
At the end of the day, some might argue that Gates is no longer involved in the day-to-day operations of Microsoft and thus shouldn’t comment on the company’s situation in China. They could also say that both Musk and Gates were in Bo’ao to focus on bigger issues, and that topics for discussion were a decision for moderator Robin Li. But the failure of anything substantive to come from such a big meeting of minds is certainly a disappointment for many, and does seem to reflect a Chinese fondness for focusing on prettier but more trivial matters in public, while leaving troublesome but important issues out of the spotlight.
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