In 2019, China’s gross domestic product was more than $14 trillion. For global firms, the prospect of being shut out of one of the world’s most lucrative markets is terrifying. “China is applying the same economic statecraft playbook that it has used in the past to intimidate multinational corporations,” says Bonnie Glaser, the director of the China Power Project at Washington’s Center for Strategic and International Studies. “In almost every case, companies have prioritized their bottom line and have been willing to offer groveling apologies.”
Last year, more than 40 airlines, including United, American, and Delta, were ordered to erase their websites’ references to Taiwan as a “country.” All have operations there, but they readily complied. The Marriott hotel chain was given a similar diktat, and acquiesced with a cringing mea culpa. Mercedes-Benz was rebuked for an Instagram post so toothlessly clichéd that it could have come from a fortune cookie: “Look at situations from all angles, and you will become more open.” The person quoted was Tibet’s Dalai Lama, so the carmaker immediately made a confession to propagating “wrong information.”
The attempt to enforce guidelines for international firms is particularly noteworthy in the entertainment industry, where content is the product rather than the by-product. Beijing already limits the number of foreign films shown in theaters within China to only a few dozen a year, so producers could theoretically be as bold as they wish in offerings that will never reach Chinese consumers. But with a $4.8 billion market on the line, there is a strong incentive to avoid getting put on the party’s blacklist.
This month, the comedy show South Park bucked the Hollywood trend with a story line that sent one of its characters to a Chinese labor camp. The series was promptly banned—not necessarily a bad thing for a controversy-courting work of satire, but hardly a scalable business model. “Like the NBA, we welcome the Chinese censors into our homes and our hearts,” the show’s creators tweeted, tongues firmly in cheek. “May this autumn’s sorghum harvest be bountiful! We good now, China?” To make certain that the ban would never be lifted, they referenced Xi’s supposed resemblance to Winnie the Pooh.
Talk to security strategists anywhere in Asia (living in the region, I frequently do), and they’ll almost universally express greater concern about China’s economic power than about its military might. “China has a lot of money—and they use it,” says Manoj Joshi of New Delhi’s Observer Research Foundation. “India can defend its own borders, but we can offer nothing remotely like Beijing’s BRI investments.” Similar sentiments can be heard from Kuala Lumpur to Kathmandu.
Global corporations show little sign of pushing back against Beijing’s demands. Big tech companies such as Facebook, Google, and Twitter are still jockeying to enter the market; they are kept out not by any sense of principle, but by “the Great Firewall of China”—the party’s tool for enforcing online ideological purity. Three years ago, the NBA set up a training camp in Xinjiang, the province where some 1 million ethnic-minority Uighur Muslims are currently interred in camps designed not for basketball, but for what is euphemistically termed “reeducation.”
The pressure to conform will increase in lockstep with China’s economic power. International firms have a stark choice: Take a stand for the principles they so often claim to respect—or just keep getting dunked on by the Beijing Cadres.