(Photo: FINANCIAL TIMES)
BY DANIEL WRIGHT-MASON, Editor-In-Chief
The story of China and the United States’ contentious rivalry is certainly not a new one, with the two global superpowers perpetually locked in a war of economic and cultural dominance, especially since the fall of the Soviet Union, with Xi Xinping’s China evidently having its eyes firmly locked on the title of ‘Global Hegemon’.
However, in a world of ever-expanding globalised markets, the U.S and China have seen a huge growth in economic interdependence, with around $635 billion dollars’ worth of imports being exchanged between the two of them in 2017 alone. With China being largely unscathed by the 2008 financial crash, due to it having a heavily state controlled system (often dubbed ‘state capitalism’), it has made far bigger economic leaps in the past decade than has the U.S. This growth has led to billions being invested into U.S companies by China, including notable companies such as Motorola, AMC and Starwood Hotels being fully bought by Chinese corporations in just the past five years. This rapid influx of Chinese money into Western markets, and therefore growing access to the Chinese markets, has led to many companies changing the focus of their business.
And therein lies the problem. Because whilst the Chinese and the U.S governments may both share an economic desire to trade, they very much differ in their views on social issues, and perhaps most crucially, on democracy. This naturally brings us to the current situation in Hong Kong, in which millions of people have taken to the streets for the past five months to protest at the erosion of their democracy by the Chinese government. These protests have been met with almost universal support in the West, with many countries heavily criticising China for infringing on a formally democratic entity.
These protests have also created, in a mere matter of weeks, four stories that ordinarily would have nothing to tie them together but are all bound by the same problem – the actions of U.S companies when they are caught between money and principle.
The first of these four stories comes from the Esports world. On October 6th, professional Hearthstone player (and Hong Kong native) Ng Wai ‘Blitzchung’ Chung was giving a post-match interview after the ending of the ‘Grandmasters’ Season 2. During the segment, Chung dons the informal ‘uniform’ of a pro-democracy protestor (a ski mask and respirator), before exclaiming “Liberate Hong Kong. Revolution of our age.”
This interview was met swiftly with anger from Hearthstone developer, Blizzard, who immediately announced they were banning Chung from competing for a year, as well as confiscating all prize money that he had won at the tournament. Even more controversially, they also stated they would no longer be re-hiring the two interviewers, who they claimed were “knowingly breaking the rules”. This decision was met with backlash from much of the gaming community, as well as in U.S Congress, and whilst Blizzard subsequently halved the ban for Chung, they have taken no action in apologising or retracting their overall decision. Many have pointed to the economic ties that Blizzard has with Chinese tech powerhouse TenCent, which reportedly owns around 5% overall shares in the company. TenCent has also worked with Blizzard’s parent company Activision Blizzard in ‘porting’ Call of Duty online to a Chinese audience. Another motivator for Blizzard is the immense size of the Esport market in China, with recent estimations valuing it at around a $3 billion industry, with an expected 354 million Chinese players by 2023, a number which is greater than the entire population of the U.S. The decision made by Blizzard has been a cause for concern for many, with the worry that if one of the world’s largest video game companies feels compelled to censor calls for democracy at the behest of the Chinese government, then who else will be able to resist?
This leads almost perfectly on to a story from the non-virtual sports world of the NBA (National Basketball Association). On October 4th, just two days before the Blitzchung incident occurred, General Manager of the Houston Rockets, Daryl Morey, tweeted out his own support for the pro-democracy protests, with the words “fight for freedom, stand with Hong Kong”. This once again was met with immediate rejection from the governing association, with the NBA releasing a long statement in which they distanced themselves from Morey’s message, and apologised for him “deeply offending our Chinese friends and family”. This comes just three years after the NBA and recurring company TenCent signed a reported $1.5 billion deal to stream the NBA in China, which is furthered by another $3.5 billion which the NBA also generates in China, which is believed to contain around 500 million fans of the sport.
The Morey controversy was further fuelled when venerated basketball legend Lebron James gave a statement on the subject whilst on a press tour in China, claiming that Morey was “misinformed or not really educated” on the issue, before backing down on Twitter. This issue once again raises questions about the motives of companies like the NBA, whose Commissioner Adam Silver claimed that Morey’s tweet had cost the company millions, and that there had even been pressure from Chinese officials to fire Morey.
Following the response from the NBA, it was the TV cartoon South Park’s creators, Matt Stone and Trey Parker, who took to social media to produce their own parody of a apology to the Chinese government, following their own controversy surrounding China. This arose due to the reactions to their biting show episode “Band in China”, in which the show took aim at Hollywood’s dependence on the Chinese market, and the media censorship that often comes with that. In their apology they stated “Like the NBA, we welcome Chinese censors into our homes and hearts. We too love money more than freedom and democracy” before ending their satirical ‘apology’ with “we good China?”.
However, this does not put an end to the rabbit hole, but simply extends it. This is because, shortly after the South Park episode was aired (which resulted in all references to the show being completely removed from the Chinese state monitored internet), it was reported that Apple had withdrawn its bid to obtain the streaming rights to the show for its streaming service, Apple TV. This was revealed shortly after Apple had come under fire for removing the news app “Quartz” from the Chinese version of the app store, after reported complaints by the Chinese government over coverage of the Hong Kong protests. As well as this, Apple recently removed the Taiwanese flag from users in Hong Kong and Macau, spreading further outrage over apparent censorship. Much like Blizzard and the NBA, Apple have huge economic ties to China, with Apple predicted to make $43 billion in China in 2019, which means once again they face a heavy price if they decided to alienate the Chinese government.
This leads to the moral dilemma of all these stories. To what extent should we expect corporations to take principled or ethical stances in line with Western values on political issues, or do we expect them to function purely as profit making bodies? A proponent of the free market would suggest that if U.S companies actively boycotted, or were banned by China due to adopting a particular political stance, then Chinese companies would simply evolve to take their place with a potentially less principled or open standpoints on these issues. Some may argue that if the West wishes to make money in China, they must be somewhat forthcoming to its customs, a sentiment echoed by a recent headline in ‘China Daily’ that read: “You cannot make money from China while insulting the country.” Others may go even further, and suggest that the U.S is in no position to claim the moral high ground on this issue, given it has followed what is perceived in many eyes as an aggressive and anti-democratic foreign policy over the last 70 years.
However, it is very difficult to avoid a culture of ‘woke capitalism’, in which companies will actively use liberal politics as marketing tools when appealing to a Western audience, and then throw these same values under the bus as soon as Chinese money is involved. One thing’s for sure, with the influence of China only likely to increase in the coming years, and with more and more companies becoming economically linked, it is likely that this problem of profit over principle with be a topic of debate for many years ahead.