Instead of blanket-banning Chinese EVs, replicate China's Tesla playbook
China turned Tesla into a teacher for its domestic industry by mandating localized supply chains and separating hardware from software. America should apply the same strategy to Chinese EVs instead of imposing an outright ban.
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The argument · tap a timestamp to hear it
Corruption once lubricated a broken institutional system
In 2008, China ranked 172nd hardest globally for building permits, yet half the world's construction cranes were in China—proof that formal systems couldn't keep pace and corruption became the workaround to bypass bureaucracy and get things done. This level of corruption was tolerated in the 80s and 90s because it served rapid growth; the real crisis came when conglomerates like Anbang, HNA, and Wanda weaponized the same playbook at scale—funneling assets through hundreds of subsidiary companies, using dark transfers between unlisted firms to hide holdings. This crossed from lubricant to systemic theft.
— Meg RithmireWhen policy shifts, entrepreneurs' horizon collapses from 3 years to 6 months
Rithmire sees Chinese private enterprise cycling through repeated rounds of tolerance followed by crackdown, training owners not to trust institutions but to stay close to the Party and ready to flee. Normally they frame business horizons around the policy environment of the next 3 to 5 years. But the moment they sense a shift, that window compresses to 6 months: move money overseas, deploy the mutual dirt you've accumulated to secure yourself, extract whatever you can before the door closes.
— Meg RithmireThe Party refuses both legal constraints and judicial discipline
Legal scholars describe China's system as ‘法制’ (lawfulness) rather than ‘法治’ (rule of law)—the Party doesn't accept rulings from independent courts. Rithmire extends this: China practices what she calls ‘rule by market’ either—the Party won't tolerate being disciplined by market forces. This explains why China still has no genuine bankruptcy framework, no effective minority-shareholder protections. The Party insists on picking winners and losers itself; land, labor, capital—all production factors ultimately flow from Party decisions, not markets.
— Meg RithmireZombie firms got rebranded: from asset shells to unprofitable makers
The old zombie enterprises were Anbang and Wanda—shells that produced nothing, just shuffled assets around. After resources tilted toward industrial policy, zombie firms evolved into real manufacturers that actually make things. The difference: they don't make money. Paired with the anti-involution campaign—government subsidies flooding in to see who survives—overcapacity crushes margins, forcing genuinely competitive firms like BYD to race to the bottom on marginal products like massage chairs just to move volume.
— Meg RithmireOrdinary households are locked out of the wealth-creation cycle
Real estate and finance were systemically corrupt, but they gave ordinary families a sense that their money was growing. Now resources flow to BYD and DJI, the policy champions—but those firms employ far fewer people. A family can afford an EV, yet can't touch the upside. Rithmire notes that Xi's framing has shifted from ‘eliminate poverty’ to ‘maximize national power’. Personal healthcare and pensions deteriorating in the bargain doesn't appear in his cost-benefit calculus.
— Meg RithmireNational security law itself betrays the Party's loss of control
The West assumes the CCP can command any Chinese firm at will. Reality is the inverse. Laws like the National Security Law and Foreign Espionage Law—vaguely worded, almost never cited in court—exist precisely because the Party is unsure it can actually direct private tech companies when it needs to. These laws function as deterrent and backstop, not as day-to-day operating mechanisms. The dynamic between Party and firm is an ongoing dance of negotiation, not a command chain.
— Meg RithmireHer solution: replicate how China once handled Tesla's entry
Rithmire rejects both blanket bans and full openness. She advocates flipping China's Tesla playbook: allow CATL and BYD to build US factories, but mandate localized supply chains, enforce supplier diversity with ongoing audits, and split hardware from software—exactly as Tesla was forced to use Baidu for maps and data residency in China. This preserves security guardrails while importing the know-how America's EV sector needs: the engineering to hit $15,000 EVs.
— Meg RithmireAmerican graft is brasher, therefore more corrosive to society
Rithmire contrasts the two systems: in China, you must be discreet—Guo Wengui was already washed up and cornered before he bragged about wealth; normal practice means staying invisible. Now America's problem is Trump minting money with meme coins, doing it openly, the President himself bragging. She argues the ‘everyone's cheating so why shouldn't I’ reflex is more dangerous than the dollar amounts—smaller scale, but it's accelerating erosion of belief in business fairness itself.
— Meg RithmireIn their own words · checked verbatim
we have to stop the disorderly expansion of capital, disorderly deployment of capital. And a lot of people read that as super Marxist.
Meg Rithmire2:15
in 2008, China was like the 172nd worst country in the world for getting a construction permit. But also in 2008, half of the world's construction cranes were in China.
Meg Rithmire3:18
the party state doesn't want to be disciplined by markets any more than it wants to be disciplined by judicial decisions.
Meg Rithmire16:38
there's very few avenues for the Chinese household to participate in an exciting way in the exciting part of the contemporary Chinese economy.
Meg Rithmire27:18
U.S. EV ecosystem currently is missing now is someone who knows how to make these cars for 15 grand.
Meg Rithmire49:10
we don't have to read the New York Times articles every two months about how good the Chinese EVs are, right? We need to see them on the roads.
Meg Rithmire55:23
everyone's scamming so i might as well scam right and now we have just a ton of scams in the united states
Meg Rithmire1:16:14
it's all a little qvc in a way that feels like especially especially gross and especially pointless
Meg Rithmire1:19:27
Figures
| China's building permit difficulty rank (2008) | 172nd from hardest globally | 3:18 |
| Global construction crane distribution (2008) | Half in China | 3:18 |
| Real estate as share of China's GDP (2000s) | ~20% | 9:23 |
| Population in China's affluent urban centers | ~75 million (top 15 cities) | 33:40 |
| ZTE's acceptance of US judicial review for market access | Began 2018 | 51:15 |
Glossary
- Mafia firms
- Conglomerates using complex shareholding structures to move assets through real estate and finance, producing minimal tangible goods.
- Gray rhino
- A slow-building but inevitable systemic risk that causes catastrophic damage once set in motion.
- Mutual endangerment
- Business owners and officials each holding compromising information on the other, trading silence for survival.
- Jiexiaoren
- Middleman intermediary who connects private firms to bank credit, taking a commission for the arrangement.
- Anti-involution campaign
- Government intervention to suppress ruinous price wars and capacity gluts among competitors.
- Reverse Tesla
- Allowing Chinese automakers US production under enforced local supply chains and hardware-software separation, inverting the constraints Tesla faced in China.
How to listen
Followers of Chinese political economy and US-China industrial policy; investors and policy researchers weighing whether Chinese automakers and battery manufacturers should build US factories.
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