Corporate America’s Deplorable Cost-Benefit Analysis in China

Though stemming from a nation across the globe, China’s censorship agenda, evident in its attempts to regulate discourse on its policies, has dangerous implications for American businesses that operate on an international scale. Those consequences have already begun to rear their ugly heads. Recent events in relation to Hong Kong’s pro-democracy protests have confirmed American companies’ willingness to succumb to Chinese regulatory demands in order to continue to profit from China’s substantial and proliferant market. 

Last October, Activision Blizzard, a titan in the American gaming industry, suspended a professional player of its competitive card game Hearthstone for voicing solidarity with protests in Hong Kong during an official Blizzard interview. These ongoing protests in particular were sparked this summer by China’s aggressive demands for the extradition of Hong Kongese criminal suspects to mainland China, effectively as a means of consolidating Chinese control and undercutting Hong Kong’s judicial sovereignty. As a result of his suspension, the player, named Chung “Blitzchung” Ng Wai, was stripped of his earnings and removed from the competitive circuit altogether.

Chung’s punishment is not an isolated instance of a public actor facing blowback for wading into the China-Hong Kong controversy. Just two days prior, Daryl Morey, General Manager of the National Basketball Association’s (NBA) Houston Rockets, was similarly reprimanded for showing support for Hong Kong’s freedom fighters. After voicing his solidarity with the protesters via a tweet, Chinese internet-services conglomerate Tencent halted broadcasts of the Rockets’ games in China in retaliation, prompting Morey to quickly remove the tweet and the NBA to issue a statement clarifying that his opinion “does not represent the Rockets or the NBA.” Morey’s alleged misstep was a quintessential public relations disaster for the association, given the immense popularity of the Rockets and the NBA at large in China.

Viewed in tandem, both of these cases paint a rather bleak image of American freedom with respect to overseas corporate forces. Yet the grimmest aspect of the situation at hand is not the simple fact that American companies are bending to Chinese demands for censorship, but rather how it reflects the deeper issue of the priorities of American corporations. Governments enforce broad censorship to muzzle forces that threaten them, as is the case with the Hong Kong protests. American companies, though, have deemed implicit support for the suppression of these just cries for freedom and liberty as more valuable than validating them. That is a frightening prospect, even if one understands the reality of corporate motivations.

In practice, Chinese censorship occurs through the “Great Firewall”: a combination of legislation and internet technology that prevents Chinese citizens from using websites with foreign domain origins. Chinese contemporary culture has adapted to provide homegrown alternatives to banned foreign services: for example, Weibo is the Chinese equivalent of Facebook or Twitter, and Tudou is a massively popular website akin to Youtube. These readily available, popular, and domestic substitutes shift demand within China away from the foreign service providers that are outlawed by the Great Firewall, placing the burden on these exiled American companies of finding creative ways to break into the fruitful but problematic Chinese market.

The Chinese market has proven to be a tough nut to crack for many American corporations. The businesses that have established footing in China—among them Blizzard Activision and the NBA—will go to extraordinary lengths to maintain their position. The NBA has amassed an immense and devoted Chinese following predicated on basketball’s national popularity. China is also a major esports hub, and games manufactured by Activision Blizzard tend to sell exceptionally well there. These two companies have major financial stakes in keeping the Chinese government satisfied, or else they risk finding themselves banging on the doors of the Chinese market like many of their less fortunate American competitors.

The NBA and Activision Blizzard seem to have legitimate reasons behind their compliance with Chinese censorship and their enforcement of these policies in the face of transgressions that occur in America. These were calculated business decisions, not simply proactive declarations of support for China. The question then becomes a familiar “do the ends justify the means?” dilemma. If these companies were simply acting to preserve their spot in a market that contributes significantly to their profits, can their acquiescence to a foreign government’s censorship be considered acceptable? The answer is a definitive and unequivocal “no.”

In another world, it might have been possible to somehow justify such censorship if one of its side effects were not depriving a just movement of much-needed overseas support, but it is doing exactly that. Businesses bending to China’s demands is inevitable as long as the Chinese market continues to fill up their balance sheets. But right now, protestors in Hong Kong are being left for dead due to the American corporate “profit-first” mindset. In past instances, the side effects of American compliance with Chinese censorship have usually never made waves outside the borders of the two nations. But this time there is a third actor on the stage, Hong Kong, which is the subject of controversy and the site of injustice, and whose citizens are impacted by the life-or-death consequences of corporate inaction.

The NBA specifically has long been a bastion of progressive values within the United States, but its decision regarding China shines a light on its hypocrisy. When social justice is financially beneficial or its costs are deemed negligible, the NBA empowers its stars to speak out in support of marginalized groups; take the Colin Kaepernick incident of three years ago, when LeBron James and other NBA players were vocal supporters of kneeling during the national anthem. Because the action led to only a domestic debate related to a sport played only in the United States, it could not possibly have had serious repercussions globally. The NBA thus assumed a progressive persona. 

Many would deem protecting the liberties of freedom fighters in Hong Kong an equally, if not more, progressive cause. Yet James’ words of support are now nowhere to be found; rather, he boldly criticized Morey’s solidarity as “misinformed.” The NBA has proven themselves to be a “selectively progressive” body, a truly condemnable ethos to follow as one that compromises the very idea of corporate responsibility. 

It seems irrational to decry a business for following the money; at its core, business revolves around profit. However, it is not unreasonable to expect businesses to weigh the relative importance of those profits against the life-or-death scenarios that play out in the real world, and subsequently decide if maximum profit is still worth pursuing. Companies like Activision Blizzard and the NBA have proven unwilling to even attempt to navigate that chasm and, accordingly, deserve the ire of the American public. We cannot hate a company for acting intuitively with their bottom line in mind, but we can hate them for still doing so in the face of an enormous humanitarian cost.

The image featured with this article is used under the Creative Commons Attribution 2.0 License. The original was taken by Mike Mackenzie and can be found here.