Tesla’s China Dream Threatened by Standoff Over Shanghai Factory

Hearsay, for all I know.

The knowledge won't stay in a bottle. I doubt any treaty in the world could keep an automotive industry from developing in China. Maybe the only potential progressions are (a) let local clones develop while ignoring the market, watch hopelessly if those local clones then go on to innovate further than you or (b) do ventures like this to at least be directly exposed to any potential upside if the local folks surpass you?

There's also a side question here about the difference between physical goods and software. Something like WeChat faces a really steep uphill climb to conquer the west because the starting conditions are so different - I'd have to be convinced to change from our existing ways of doing the same thing, vs being one of the first to enable things in a new market. On the other hand, smartphone clones can sell everywhere with the same hardware (especially once Google gave Android away freely). Japanese/Korean auto manufacturing is more the example for that (and obviously for Tesla), and that happened on its own.

https://en.wikipedia.org/wiki/Samuel_Slater

    Samuel Slater (June 9, 1768 – April 21, 1835) was an 
    early English-American industrialist known as the 
    "Father of the American Industrial Revolution" (a phrase
    coined by Andrew Jackson) and the "Father of the
    American Factory System."

    In the UK, he was called "Slater the Traitor" because he
    brought British textile technology to America, modifying 
    it for United States use. He memorized the designs of
    textile factory machinery as an apprentice to a pioneer
    in the British industry before migrating to the United
    States at the age of 21.

The other side of this is takeovers in the West - sometimes they get blocked by government, like quite recently in Germany.

The West wanted cheap workforce, it came with a hefty price that will be paid years later after WTO admission, didn't you know?

Not much diff than AirBus has join venture in China for some Airplane assembly works. But it certainly didn't share all the Jet Engine technology, Filght Control Software etc with the Join Venture in China.

China knows that it has big market and would like leverage to get more benefit from western companies who like to access that market.

It is just business.

An inflated purchase price thanks to 25% tariffs just makes them more attractive to buyers who don't care about price.