Tesla's big bet shows there is something special about China

Tesla CEO Elon Musk poses with Tesla China-made Model 3 vehicle owners during a ceremony in Shanghai, east China, Jan. 7, 2020. (Xinhua/Ding Ting)

A year ago on January 7, Tesla CEO Elon Musk attended the Tesla Shanghai Gigafactory groundbreaking ceremony in Shanghai, China. In less than a year after construction of the factory started, it delivered its first Model 3, taking Tesla one-step closer to achieving its ambitious goal of becoming a true global carmaker. How is that possible?

Not everyone thought that Tesla would be able to start production at its plant just one year later, but that is exactly what happened. In fact, the plant is already pumping out more than 1,000 vehicles a week and it aims to bump that up to about 3,000 per week. A new multibillion-dollar plant seemingly rising out of nowhere in about half the time it took the Gigafactory in the US state of Nevada to start churning out batteries shows that there is something special about China.

Over the past 70 years, China has developed at a rapid pace. It has become the world's second largest economy and the country has made huge strides in economic development and technological innovation, especially since reform and opening-up. For example, official data shows that China has lifted some 850 million people out of poverty over the past 40 years, accounting for about 70 percent of the global total. China also leads the world in high-speed railways, with a network that stretches about 35,000 kilometers.

Behind this is "China speed." "China speed" is what turns the "impossible" into the "possible" and it reflects the strength of China's unique model of development. Tesla was able to build a massive plant in record time because China has a comprehensive industrial system, a pragmatic approach to governance, construction expertise, abundant talent, and fast logistics to name a few. There are many destinations worthy of foreign investment, but Musk chose Shanghai.

Tesla's multibillion-dollar investment was the result of careful consideration and it is a strong signal regarding Tesla's plans and intentions. On multiple occasions, Musk has expressed appreciation at the speed at which China can do things. In February 2018, he said that China's progress in advanced infrastructure is more than 100 times faster than the United States. Months later in December, he praised China for its amazing space progress. China's development and efficiency impress Musk, and he is betting big on China.

If we zoom out and look at the bigger picture, we can see that Tesla's success in China is a win for everyone. By setting up shop in China, the American company can leverage "China speed" for production and other projects and Tesla has positioned itself for big growth in a country with a growing electric vehicle market and a middle class that is already bigger than the entire US population. In return, Chinese enterprises can learn from and compete with a company that places high value on innovation.

Musk's decision to make a significant investment in China and his desire to increase the investment mean that he is very optimistic about China. With billions of dollars, Musk has expressed strong confidence in the future of China. At the same time, by welcoming the foreign automaker with open arms, China has shown that it is determined to deepen opening-up and improve its business environment.

For years, people have been waiting for China's economic collapse. Some people have even made entire careers out of this sort of thing. However, the decisions of visionary entrepreneurs like Musk, who believe that China is the future, should remind us that China's economy is more resilient than sometimes presumed and that the amazing China story is far from over.