I don't buy that at all. Twitter has been able to withhold tweets from certain countries (e.g. EU) based on local laws, for many years. They can just keep doing that with China. You can't be held hostage if you just comply with the law and take a bunch of tweets down in China, which every company must do.
> if you just comply with the law and take a bunch of tweets down in China
Note the last qualifier in your statement. "in China". I think the concern is that a potential adversary could influence Musk outside of their jurisdiction too. So "in China" becomes "everywhere". Which means that one day your might find that you're not able to criticize Putin or Xi Jingping or whoever else on Twitter because Musk has a large Tesla presence in that country
Fair, but I doubt that would be in China's interest. For example, we haven't seen China try to do that with Apple Podcasts, Apple News or (less significantly) Apple Music content that might be anti-China. I'm not seeing a track record here.
China will do what it always did before with other companies: try to hack Twitter to get sensitive data, and try to place spies in high places to obtain trade secrets, IP, and technology.
I'm not sure if China even needs to actively do anything in order to create a chilling effect on Musk. Maybe he will just censor things on the platform proactively to appease the relevant authorities/interests. That's of course speculation, but there's precedent for it happening already (see Disney[0])
Honestly though I'm just entertaining the idea. I'm not too worried about Musk's acquisition of Twitter
