This article was originally published by Radio Free Asia and is reprinted with permission.
U.S.-based electric carmaker Tesla has bowed to pressure from Beijing and announced it will move Chinese user data to a new center in China, sparking concerns that the move will set a precedent for other tech companies when dealing with the Chinese Communist Party (CCP).
The company said in a Weibo post Tuesday it would expand its network of data centers and store all data generated by the cars it sells in China within the country’s borders, according to Reuters news agency.
Tesla currently makes Model 3 sedans and Model Y SUVs in China, which is home the world’s largest automobile market and the second-biggest market for Tesla.
The move comes amid a flurry of concern that Tesla vehicles could pose a threat to China’s national security.
Staff at some Chinese government offices have been told not to park their Tesla cars inside government compounds amid fears that the vehicle cameras could be used to spy, Reuters quoted two people familiar with the matter as saying.
Tesla vice president Grace Tao, along with executives at search giant Baidu and sales portal Alibaba, took part in talks at a CCP-sponsored think-tank on data security last week.
Tseng Yi-shuo, cybersecurity chief at the Institute for National Defense and Security Research on the democratic island of Taiwan, said recent state media reporting had tried to frame data security as linked to user privacy, but that the new regulations would also achieve surveillance aims for the government.
“China has a habit of controlling and monitoring its citizens’ every move,” Tseng said. “[A lot of] foreign businesspeople, foreign residents and even foreign officials in China use Tesla electric vehicles.”
“Now their data will also be stored in a data center in China,” he said. “That’s something that those who manage foreign personnel in China must take into account.”
Financial commentator Si Ling said Tesla vehicles collect a rich array of data from GPS, cameras, voiceprints and censors as owners drive around.
“All of this is collected and sorted through by the Chinese authorities,” Si said. “There is basically no data security for those users.”
Si said Tesla had set an alarming precedent.
“It doesn’t matter how much Chinese consumers like foreign products … Behind Chinese consumers is the Chinese government, a powerful and totalitarian regime,” he said.
“This is a wake-up call to other foreign companies.”
Si said it will normalize demands on foreign investors that they hand over core technology and data to the CCP as the price of doing business in China.
“Unless the Chinese government controls [the data], these companies are going to struggle to thrive or even survive in China,” he said.
In 2018, search giant Google was lambasted by rights groups over reports it was developing a version of its search app that complied with CCP censorship and other requirements.
In 2005, Chinese journalist Shi Tao, who circulated a government order to suppress media commemorations of the 1989 Tiananmen crackdown, was jailed for 10 years after Yahoo handed over his e-mail records to the authorities.
Google left China in 2010 after a showdown with China’s ruling Communist Party over internet censorship, and currently redirects Chinese language users from the mainland to a search site run from its Hong Kong-based servers.