China’s Chokehold on American Businesses

Outquote(s): If the current path continues, the cost will be our freedom of speech.

The Chinese Communist Party’s (CCP) flagship journal, Qiushi, printed an article in July of 2020 consisting of 18 separate quotations from President Xi Jinping that all drive home the same theme: Xi and the Party are the supreme and sole authorities in China. The phrase “East, west, south, north and at the center, the Party leads everything” is repeated, with slight variations, seven times. Xi also writes that “without the Party’s leadership, national rejuvenation will remain a fantasy.” In a time when China and the U.S. are more economically interconnected than ever before, Xi has cemented his commitment to authoritarianism.

The U.S. first established a diplomatic relationship with China in hopes of pushing the communist nation toward democracy. Trade between the two countries began in 1979, when, seeking to “open up” China, U.S. President Jimmy Carter signed a bilateral trade agreement with Chinese premier Deng Xiaoping. Since then, commerce between the two nations has grown rapidly, increasing from $4 billion that year to over $600 billion in 2017. The U.S. government was confident that increased exposure to the Western capitalist lifestyle would win over the people of China and gradually transform the country’s worldview. Instead, our economy became increasingly dependent on China’s: our trade deficit increased hugely in the ‘80s to ‘90s, growing from just $6 million in 1985 to $83 billion by 2000, and finally to $419 billion by 2018. Our economic interactions with China were initially spurred by political motives, but now our economy is inextricably linked with that of China, and our corporations have set aside all American liberal ideologies for profit.

China has seen unprecedented, unforeseeable economic growth and social development in the last two decades; the nation has escaped its reputation as a large source of cheap, often subpar manufacturing and grown to become the second-largest economy in the world. China now holds access to a valuable consumer base due to its rapidly expanding middle class, which is projected to increase from 80 million in 2002 to 700 million by the end of 2020, making it now larger than the entire population of the U.S. Most large companies are now dependent on China’s massive consumer base, even those that may appear uniquely American. Ten percent of the total revenue of the Starbucks Corporation came from China in 2019, and KFC now sells more chicken in China than in the U.S.

This economic growth has been accompanied by growing authoritarianism. Since Xi took power in 2012, China has become increasingly imperialist, strengthening its presence in disputed territories like Hong Kong, Taiwan, and the South China Sea with aggressive political and military maneuvers that violate all previously negotiated treaties. Xi has also shown disregard for the rights of his mainland citizens: since 2014, Uyghur Muslims in the Xinjiang province of China have increasingly had their religious, cultural, and social practices restricted. The first detainment camps were discovered on satellite maps in 2017, and while the government initially denied their existence, they have since acknowledged the camps and now claim they are peaceful “re-education” centers. In these camps, detainees are reportedly forced to recite Communist propaganda for hours every day and chant slogans praising Xi. If they show any form of disobedience, they experience horrific torture. Female detainees also face sexual assault and forced sterilization. Though the government denies these claims, it did confirm that birth rates in the mostly Uyghur regions of Hotan and Kashgar dropped by 60 percent between 2015 and 2018.

American businesses refuse to condemn these abuses, because they are entirely dependent on the goodwill of the Chinese government. Foreign companies in China have always been forced to operate under tight government restrictions: each one is assigned a member of the CCP to manage a cell of Party members employed there, and state security recruits personnel to work in the office and discreetly monitor the activities of foreign managers. For most American corporations, this censorship allows them to put aside any personal morals and simply focus on profit. However, as China continually tightens its restrictions, it has become increasingly difficult for foreign companies to avoid violating the government’s vague requirements.

The Marriott hotel chain misstepped and sent out a global survey to its rewards members listing Hong Kong, Macau, Tibet, and Taiwan as separate countries in January of 2018. The company, which operates over 300 hotels in the Chinese mainland, was forced to suspend operation of its Chinese website and app for seven days. Following this conflict, Marriott put out a statement saying the company does not support “separatist groups that subvert the sovereignty and territorial integrity of China” and to “rebuild trust” with the Chinese government and public, they would “expand employee education globally,” implicitly promising they would encourage an undisclosed number of their 50,000 employees to take up imperialist stances.

Three months later, perhaps emboldened by their success with Marriott, the government sent out a letter to 36 foreign airlines that had listed the disputed territories of Hong Kong, Macau, and Taiwan as sovereign countries, demanding they change the listing on their websites. Almost every airline complied, including the U.S.-based Delta, United, and American Airlines, and now list all the disputed territories as provinces of the People’s Republic of China.

China’s censorship of American companies was again seen on October 4, 2019, when in response to pro-democracy protests in Hong Kong, Houston Rockets manager Daryl Morey tweeted an image reading “Fight for Freedom. Stand with Hong Kong.” Morey later deleted his tweet, but the damage had been done: within a few days, Chinese officials called for NBA Commissioner Adam Silvey to fire Morey. This time the NBA refused and the government leveraged the full might of its economic power to punish the American and those who stood behind him for free speech.

The Chinese Basketball Association immediately suspended all operations with the Houston Rockets. The Chinese media company Tencent, which had just established a five-year streaming deal with the NBA worth $1.5 billion, stopped airing Rockets games. Tencent’s close ties to the NBA may also have been the reason the NBA’s statement on Morey’s tweet had marked discrepancies between its English and Chinese translations. By late October, Nike, which makes around 10 percent of its revenue from Chinese consumers, had pulled all Rockets merch from its Chinese stores.

China’s power stretched to affect even the media covering the controversy. Immediately after Morey’s tweet was sent out, Chuck Salituro, the senior news director at ESPN, released a memo to all employees mandating that coverage of the situation avoid any political discussion relating to China and Hong Kong. Then, one of ESPN’s shows broadcast a map of China including not only Hong Kong, Taiwan, and Macau, but also the infamous nine-dashed line in the South China Sea representing China’s much-contested claims there. An expert on Chinese law said he had “never seen that map outside of China” and described its broadcasting as “literal Chinese state propaganda.” This transparent pandering to the CCP is likely due to ESPN’s partnership with Tencent, as well as the fact that its parent company, the Walt Disney Corporation, is hugely dependent on Chinese sales for every part of its movies and theme parks. Despite the public outcry, ESPN did not apologize.

Instead of American businesses “opening up” China, China has instead shut down the free speech of those businesses, turning them into mouthpieces for imperialist positions for the American public. The government will not face resistance from its mainland population in the foreseeable future; most Chinese citizens are unaware of any human rights abuses by the government, and those who are aware are unable to effect change. Since China’s authoritarianism is enabled by its strong economy, it will take purposeful and global-scale economic maneuvers or even outright military aggression to coerce China’s authoritarian leaders to loosen their grip on the nation.

If American corporations won’t change their ways, our government must step in to protect free speech. Right now, the U.S. is engaged in asymmetrical warfare where the government of China uses the tools of our capitalism to assert authoritarianism. We must fight China using our own economic power to ensure that our corporations will not become tools of an antidemocratic government. If the current path continues, the cost will be our freedom of speech.