As the ongoing controversy with the NBA over a team general manager’s tweet in support of Hong Kong has laid bare, foreign corporations and other entities operating in China face an increasingly erratic environment, where they cannot easily predict how their actions will impact their status in the country. For the NBA, the one tweet set off a chain of events which has threatened the franchise’s highly successful, decades-long foray into the China market. In The New York Times, Amy Qin and Julie Creswell discuss several recent cases that have put the foreign business community on edge:
Fast-changing geopolitical tensions, growing nationalism and the rise of social media in China have made it increasingly difficult for multinationals to navigate commerce in the Communist country. As the National Basketball Association has discovered with a tweet about the Hong Kong protests, tripwires abound. Take the “wrong” stance on one of any number of issues — Hong Kong, Taiwan, Korea, Japan, for instance — and you risk upsetting a country of 1.4 billion consumers and losing access to a hugely profitable market.
Now, multinational companies are increasingly struggling with one question: how to be apolitical in an increasingly politicized and punitive China.
“You used to know what would get everyone fired up,” said James McGregor, chairman of the greater China region for the consulting firm APCO Worldwide. “And now you don’t know. You just wake up and discover something new.”
[…] Navigating the potential for backlash in China’s commercial landscape now involves managing not just products, but employees and anyone else affiliated with a company. [Source]
Musician Zedd announced today that his upcoming tour in China had been cancelled simply because he had liked a tweet from South Park, the animated TV show that had recently mocked corporate acquiescence to the Chinese government:
I just got permanently banned from China because I liked a @SouthPark tweet.
— Zedd (@Zedd) October 10, 2019
He has since clarified his tweet, which is helpful. From his Instagram: "Just to clarify, this is NOT a joke. The government informed our promoters that if they don’t cancel my scheduled shows in China they would pull their cultural permits."
— Melissa Chan (@melissakchan) October 11, 2019
So on the Zedd thing – I have friends in music promotion in Beijing and the last few years have been *nightmarish.* For instance, one venue was told that it couldn't host acts unless it installed, at its own cost, an entire surveillance system hooked up to the police network.
— James Palmer (@BeijingPalmer) October 11, 2019
The ongoing protests in Hong Kong–which over the past four months have expanded from ultimately successful calls to withdraw a proposed extradition bill to more general demands for democratic rights and an end to police brutality–have been a special flashpoint between global corporations and the Chinese government. Any corporation that shows signs of support for the protests has faced consequences from Beijing. The CEO of Cathay Pacific airline resigned and several employees were fired after they took to social media to show solidarity with protesters. Celebrities and foreign brands have been threatened with boycotts and other financial repercussions if they fail to explicitly label Hong Kong (and Taiwan) as an inseparable part of China. Companies are increasingly caught in the middle between anger from the Chinese government and nationalistic citizens who may threaten their business prospects in the country, and American customers who expect them to uphold values of free expression and human rights.
Gaming company Blizzard Entertainment has faced a boycott from users after it banned a professional Hong Kong gamer, Ng “blitzchung” Wai Chung, from competing in Hearthstone tournaments for 12 months after he voiced support for Hong Kong protesters at the end of a recent tournament. [Update 9/11/2019 10:30 PM PST: Blizzard issued a statement on the penalty for blitzchung, returned his winnings, and reduced his suspension to six months. Blitzchung later responded.] Steven Asarch reports for Newsweek:
“Liberate Hong Kong, revolution of our age,” Wai Chung shouted into his webcam in Chinese according to a translation by site Inven Global. The two casters streaming from Taipei ducked under their desks, saying “Ok, that’s it Blitz bro,” according to the translation. The clip of the incident, as well as the stream of the entire day of play, was removed from the Taiwanese Hearthstone channel, meaning that users can no longer see the footage on Twitch. The clip itself has gained traction on Reddit and Twitter, with many standing by Wai Chung’s message.
In a broader statement to Inven Global, Wai Chung said that his “call on stream was just another form of participation of the protest that I wish to grab more attention.” Focusing on the Grandmasters tournament proved difficult because of his “efforts with that social movement,” and this display might even endanger his “personal safety in real life” but believes that his “actions on stream” stand for something.
Wai Chung has been quiet on social media since the stream and did not respond to a request for comment from Newsweek. [Source]
— 🎃 Inven Global 🎃 (@InvenGlobal) October 6, 2019
This is Blizzard’s official worded response in China. I checked and the translation is accurate.
Can you imaging anything more mealy mouthed and slobbering for forgiveness? pic.twitter.com/hRIiM2Eq2V
— Mark Kern (@Grummz) October 10, 2019
meanwhile, in general chat. pic.twitter.com/JafNCjcCzw
— needlessly obscenity-laced (@randileeharper) October 10, 2019
The two casters who were conducting the interview have also found themselves out of favour with the company, with Blizzard saying they would end the relationship.
The company, in which Chinese firm Tencent has a stake, reportedly issued a statement in Chinese saying: “We will, as always, resolutely safeguard the country’s dignity.”
It may have cost him $10,000 but Blitzchung says he has no regrets; Blizzard, on the other hand, might. The backlash has been swift, with gamers and politicians alike weighing in. There has been talk of a boycott, with #blizzardboycott trending on Twitter, and not just from the average players disgruntled with Blizzard’s actions. [Source]
Gaming company Legend of Legends eSports followed suit by issuing a statement saying players should “refrain” from discussing “sensitive issues” on air.
A message from John Needham, Global Head of League of Legends Esports pic.twitter.com/5Au9rE7T86
— lolesports (@lolesports) October 11, 2019
But other gaming companies took a different tack, with the CEO of Epic, producer of Fortnite, speaking out in support of gamers’ rights to express themselves freely. Makena Kelly reports for The Verge:
Lawmakers, angry fans, and other games publishers all came out with statements and forum posts condemning Blizzard for its decision to ban a player for expressing speech unfavorable to the Chinese government. Epic Games, the developer of Fortnite, told The Verge that it would never ban players or content creators for political speech. In a statement, an Epic Games spokesperson said, “Epic supports everyone’s right to express their views on politics and human rights.”
Epic’s founder and CEO Tim Sweeney took to Twitter later Tuesday afternoon to support his company’s position. Critics were quick to point out that Tencent, a Chinese holding company, owns a 40 percent stake in Epic Games, but Sweeney said that the company wouldn’t influence Epic’s position on political speech.
“That will never happen on my watch as the founder, CEO, and controlling shareholder,” Sweeney said. [Source]
Blizzard users took a unique approach to protesting the company’s actions by turning a game character into an icon of Hong Kong protesters, in an effort to punish the company by getting the game banned in China.
— The Video Games (@TheVideoGamesUK) October 9, 2019
Jessie Yeung reports on the Blizzard boycott for CNN Business:
Satirical art, like the Blizzard logo superimposed on a Chinese flag, quickly spread on social media. One viral animation shows a player in a Blizzard video game shooting down a target. Text then pops up on the screen, reading, “Eliminated Blitzchung,” “Eliminated self-respect,” and “Eliminated credibility.”
[…] All across gaming community platforms, players are holding discussions about the intersection of gaming, capitalism and politics. Many longtime fans accuse Blizzard of sacrificing its values to protect business in China. One user pointed out that Blizzard’s decision seemed all the more hypocritical given its most popular games revolve around “the fight against the forces of control, domination, and enslavement.”
There are even hints of possible discontent within Blizzard. On the Blizzard campus in California, where the company is based, there is a statue surrounded by the company’s “core values” inscribed on metal plates on the ground. On Wednesday, former Blizzard employee Kevin Hovdestad tweeted a photo of the “values” plates covered by pieces of paper. [Source]
Daily Beast reports that a group of Blizzard employees staged a walkout on Tuesday in protest.
Former Blizzard game designer Mark Kern explained why he was joining the boycott in a lengthy Twitter thread:
I am ethnically Chinese. I was born in Taiwan and I lived in Hong Kong for a time. I have done buisiness with China for many years, with serveral gaming companies there.
So I think I have a valid perspective here, having been a Team Lead at Blizzard and having grown up in Asia.
— Mark Kern (@Grummz) October 9, 2019
I’ve seen firsthand the corruption of Chinese gaming companies, and I was removed from a company I founded (after Blizzard) for refusing to take a 2 million dollar kickback bribe to take an investment from China. This is the first time I’ve ever spoken pubically about it.
— Mark Kern (@Grummz) October 9, 2019
Meanwhile, Apple came under fire from customers for taking several steps designed to limit access to information for and about the Hong Kong protesters, including removing the Quartz news app from their Chinese store. Nick Statt at The Verge reports:
In a statement, Quartz CEO Zach Seward, who assumed the role of chief executive just two days ago, tells The Verge that “We abhor this kind of government censorship of the internet, and have great coverage of how to get around such bans around the world.” The statement points to the publications’ coverage of VPNs, which can be used to bypass restrictions on accessing certain parts of the internet from mainland China. Quartz also links out to its coverage of the Hong Kong protests.
Apple capitulating to the Chinese government is nothing new. The company’s deep business interests in China, which include a majority of its consumer electronics supply chain, mean that in almost all cases, it abides by the country’s censorship policies and its sensitive reactions to any and all criticism of the Chinese government.
Earlier this week, Apple removed the Taiwan flag emoji from iOS 13 for users in Hong Kong and Macau at the request of the Chinese government, which treats any suggestion that Taiwan, Tibet, Hong Kong, and Macau should be considered independent entities as an offense to the sovereignty of the People’s Republic of China. [Source]
Apple also removed the the HKMapLive app, which has been widely used by Hong Kong protesters to track the movements of police, after it was criticized in the official People’s Daily newspaper. In a statement, Apple claimed: “We have learned that an app, HKmap.live, has been used in ways that endanger law enforcement and residents in Hong Kong.” But HKMapLive and others disavowed those claims:
2. There is 0 evidence to support CSTCB's accusation that HKmap App has been used to target and ambush police, threaten public safety, and criminals have used it to victimize residents in areas where they know there is no law enforcement.
— HKmap.live 全港抗爭即時地圖 (@hkmaplive) October 10, 2019
So @hkmaplive has shared what purports to be an internal email from Tim Cook to Apple employees. As a user of the app, and an observer of the Hong Kong protests, I would like to address two serious allegations in this email that I believe are false. https://t.co/rLT7xhVO6c pic.twitter.com/YYNwlFGHvP
— Pinboard (@Pinboard) October 10, 2019
As the developer and @charlesmok, a Hong Kong legislator, have pointed out, the app aggregates reports from Telegram, Facebook and other sources. It beggars belief that a campaign to target individual officers would use a world-readable crowdsourcing format like this.
— Pinboard (@Pinboard) October 10, 2019
The Hong Kong police force is 30,000 strong, one of the biggest police to population ratios in Asia. They do not lack the manpower to patrol a city of 7 million. Rather, they are abundantly present and harass, detain, search and arbitrarily arrest people without warning.
— Pinboard (@Pinboard) October 10, 2019
Tencent Holdings, which has invested in several of the foreign companies facing controversy this week including the NBA, Blizzard, and Epic Games, is being criticized by nationalistic Chinese customers for not better managing the companies it invests in. From Lulu Yilun Chen at Bloomberg:
But there’s more trouble ahead: Tencent’s gaming portfolio is spurring controversy too. For years, the WeChat operator took a hands-off approach with the startups and studios across its empire, reaping the benefits of importing Western content and technology for a vast Chinese market. Now the two are increasingly at odds, and Tencent is beginning to realize the downside to its passive approach.
Blizzard’s stern reprimand of the pro-Hong Kong player was popular in China, but drew outrage from the U.S. to South Korea. Online, gamers called for a boycott of the company and proudly posted their cancellations.
Then Epic CEO Sweeney jumped into the crossfire, explicitly giving Fortnite players the green light to discuss politics. The game maker is 40% owned by Tencent, but Sweeney is the controlling shareholder.
His statement earned accolades in the U.S., but was shunned in China. “Tencent why are you not holding your dog on a leash? They are biting you in your face,” one person wrote on Weibo. Tencent spokeswoman Jane Yip didn’t respond to a request for comment.
With its investments in Epic and Blizzard, Tencent has its brand on the line — but little control. [Source]
Yet for many outside China, investment by or partnership with Tencent and other Chinese entities does appear to be a form of control for some companies, even if it is self-imposed. ESPN has a partnership with Tencent to distribute its content in China; as the recent NBA story broke, the company’s senior news director sent a memo to journalists not to raise political issues in their reporting on it. During an NBA pre-season game in Shanghai, the Chinese government forbid any related media events; the NBA subsequently said its players currently in China would not be available for any officially sanctioned press conferences while agents have warned players against speaking out. The result has been a resounding silence from players and coaches who are known for being outspoken on political issues in the U.S.
Steph Curry: “This situation, there’s a huge weight and gravity to it. There’s going to need to be some things to be sorted out. But I just don’t know enough about Chinese history and how that’s influenced modern society…This is not going away. So we’ll come back to it.” pic.twitter.com/6h6ZGWHQtq
— Anthony Slater (@anthonyVslater) October 9, 2019
James Harden and Russell Westbrook were asked if they would “feel differently” about speaking on political and societal affairs because of the events with the NBA/China.
A spokesperson interrupted and informed the reporter that the players would answer basketball questions only. pic.twitter.com/zMe8uWz2hY
— Alykhan Bijani (@Rockets_Insider) October 10, 2019
Amazing. Golden State Warriors head couch manages to criticize American human rights abuses without even criticizing Chinese human rights abuses. https://t.co/WZ2To97OYw
— Isaac Stone Fish (@isaacstonefish) October 11, 2019
At The New York Times, Li Yuan writes about how decades of government propaganda have helped shaped many Chinese citizens’ views, leading them to rally against the Hong Kong protests or other perceived threats to Chinese sovereignty. At The Washington Post, Isaac Stone Fish explores the ways in which foreign companies also internalize Chinese propaganda goals when managing controversies like those seen this week:
Criticism of China’s unfair treatment of American companies has focused on technology transfers, state support of domestic businesses and intellectual-property theft. But Beijing doesn’t just want foreign companies to advance its economic interests. It wants them to advance its political ones, too. In subtle and sophisticated ways, Beijing convinces, cajoles and cudgels American companies to promote the values of the ruling Chinese Communist Party, parrot the party’s views and enshrine self-censorship about China in their corporate cultures. When it’s successful, as with ESPN, the company advances Chinese propaganda.
One way American companies protect the party’s view is by suppressing negative information; Morey did this when he deleted his tweet. So did Activision Blizzard, an American entertainment company that required a professional video gamer to forfeit $10,000 in prize money for shouting, “Liberate Hong Kong, revolution of our times” in a post-match interview. Beijing does not want to weaken these companies or push them out of China. Instead, it wants them to follow the party’s rules, both in China and globally. “China doesn’t just want you to comply with its wishes,” a Singaporean diplomat told a newspaper last year. It wants you to “do what it wants without being told.” Although Tencent owns 5 percent of Activision Blizzard and ESPN owner Disney has worked closely to mollify the party for decades, it seems unlikely that any Chinese source told officials how to act or which map to use. They had internalized Beijing’s demands.
[…] Chinese Chairman Xi Jinping calls this “discourse power” — the ability to shape the narrative and “tell China’s story well.” And foreign companies and their employees are excellent proxies for evangelizing China’s position. In other words, while the United States excels in soft power, China wins in what we could call proxy power. When Chinese basketball star Yao Ming praises China, Americans expect it. When Houston Rockets star James Harden apologizes for his team and professes that “we love China” and “everything there about them,” that feels heartfelt. Though Harden’s sentiments may be sincere, his contrition advances Beijing’s propaganda goals. [Source]
A bipartisan group of members of Congress sent a letter to NBA Commissioner Adam Silver, criticizing the NBA “for failing to put ‘fundamental democratic rights ahead of profit’ and for being ill-equipped to deal with the foreseeable ‘challenges of doing business in a country run by a repressive single party government.'”
See also a Chinese government propaganda directive limiting coverage of the NBA story in an effort to tamp down public anger.
Not only American corporations have faced repercussions in China for their actions or sometimes for the actions of their governments. Some other recent examples:
#Czech president #Zeman announced one hour ago that #China will react to termination of #Prague–#Beijing sister city agreement by diverting Prague-bound direct flights & termination of sponsoring of soccer club #Slavia. It is ironic on sooo many levels.
— Ivana Karásková (@ivana_karaskova) October 10, 2019
Lots of you were into this thread about what happened to Lotte in China. I'm serious when I say Korean corporations and K-pop have been dealing with this shit for years. So here is a K-pop example… https://t.co/oIxSRRHfN6
— T.K. of AAK! (@AskAKorean) October 11, 2019
One of the members, Tzuyu, was waving a Taiwanese flag. It's not as if she affirmatively chose the flag – it was a gimmick by the production team, and in the end the scene did not even make it on TV.
Didn't matter. Chinese internet started going nuts.
— T.K. of AAK! (@AskAKorean) October 11, 2019