Why American Companies Keep Caving In to China | Fast Company

– What do Instagram, Lady Gaga, and the letter N have in common? They’ve all been banned in
China for political reasons. Maybe even this video
will be banned in China. With an estimated GDP of $14 trillion, China has the power to
allure American companies which want in on the sizeable market. And, if they want a slice of the pie, they have to play nice. That means placating China politically so they don’t end up in
censored oblivion with the rest. So time and time again American companies have folded to China. This time, Chinese and American ideals are at loggerheads over basketball. The geopolitical firestorm was
sparked from a single tweet from the manager of the Houston Rockets, who voiced support of
the Hong Kong protests. It’s ballooned into a
battle of ideologies, of territorial nationalism
versus freedom of speech. But China has the upper hand. It’s pulled NBA games from the state-controlled broadcaster CCTV and from the streaming service Tencent, and it’s promised to punish the NBA for slighting its values,
threatening retribution. – What this speaks to is the fragility of the Chinese government. It really does reveal a
deep-seated lack of confidence within the Chinese leadership
about their own legitimacy. – The reality is the overblown
reflex is nothing new. Experts used to talk about the 3 Ts: Tibet, Taiwan, and Tiananmen,
the touchy territorial taboos. When foreign companies
imply that these regions are their own autonomous states,
China is quick to punish. Take airlines. All the major U.S.
carriers have gotten flack for listing Taiwan as a separate country on their dropdown menus, so did Marriott Hotels, for
listing Taiwan and Tibet. Mercedes-Benz was disciplined
for quoting the Dalai Lama on an Instagram post. – Oh oh oh, yeah, no no,
we don’t wanna go there. Talking about the Dalai
Lama doesn’t go over well with the Chinese. – The what? – In the entertainment world, China often gets to
shape Hollywood content and retaliates if it doesn’t get its way. For a long time, Brad
Pitt was banned from China for starring in “Seven Years in Tibet.” Oh, and so was Winnie the
Pooh, for other reasons. – No, no, no, no, that’s
definitely off limits. Winnie the Pooh is illegal in China because some Chinese students said he looked like the Chinese president. – Oh, come on, that’s ridiculous. – What’s more astounding than the dramatic
reactions and the sanctions is how quickly and cooperatively Western companies cave to China. Now, the semi-autonomous
region of Hong Kong has become another sensitive
geopolitical subject after months of protest about
a proposed extradition bill. Cue: more yielding to China. Luxury fashion brands have
issued these fawning apologies after designing T-shirts listing Hong Kong as a separate nation. And e-sports company Blizzard
Entertainment banned a player who called for the
liberation of Hong Kong. The fear of alienation
from the Chinese market is remarkable. With so much revenue at stake, it’s simply bad business
to put principles first. Take the NBA, which is
incredibly popular in China. The streaming partnership
between the NBA and Tencent is reportedly worth $1.3 billion. Tencent’s NBA audience was
more than 490 million in 2018. And, as a whole, it’s estimated that the NBA makes $4 billion a year from this Chinese partnership. That’s not to mention
lucrative sponsorship deals that keep NBA stars submissive to China. – When you’re misinformed or you’re not educated about something, and I’m just talking
about the tweet itself, you never know the
ramifications that can happen. – But other players and politicians on both sides of the aisle have spoken out against
kowtowing to China. – And some of the NBA’s
biggest players and owners who routinely exercise their freedom to criticize this country lose their voices when it
comes to the freedom and rights of the people of China. In siding with the Chinese Communist Party and silencing free speech, the NBA is acting like
a whole-owned subsidiary of that authoritarian regime. – The Vice President is also taking a shot at athletes and coaches
who’ve used their platform to speak out on civil rights
and gun violence in America. Still, human rights abuses
are flagrant in China. A million Uygur Muslims are reportedly in concentration camps
in Xinjiang province, where the NBA set up a training academy. Is it time for American companies to take ethical stances on free speech? They may no longer have a choice. – Companies are gonna have to
be aware that this NBA issue has elevated the issue of
Chinese economic coercion into the popular consciousness in a way that it never has been before. – One solution is for
multinational companies to form coalitions. – What they fail to recognize
is that if they were to unite, they would have significant
leverage over China. If the airline industry
had united and said, “We are going to recognize Taiwan “in any way that we see fit,” what is Beijing going to say? They’re gonna tell all
international airlines that you cannot have access to China? We’re going to cancel all of your routes? – But, naturally, companies
are going to compete with each other to strike that
lucrative deal with China. So, China knows it can get away with it. Ultimately, it’s hit a
nerve for the Chinese and exposed some home truths for the U.S. China’s response to Pence? Americans need to “look
themselves in the mirror “and get their house in order” before pointing the finger at China. This is a deeply nuanced issue, rooted in centuries of history, without a clear-cut answer. – Well, you know what they say. You gotta lower your ideals of freedom if you wanna suck on
the warm teat of China. – And, if it wasn’t clear, “South Park” is definitely
banned in China.

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