Los Angeles Lakers forwards LeBron James, in grey T-shirt, and Anthony Davis, in front, leave a Shanghai hotel on October 10, 2019, prior to the team's pre-season match against the Brooklyn Nets. Photo: Hector Retamal / AFP

Chinese consumers and United States’ companies are now frontline fighters in a proxy war between the world’s rising and declining superpowers.

There has been a multitude of skirmishes in the last few days on an extraordinary variety of commercial fronts as Beijing reacted angrily to support from US companies for Hong Kong pro-democracy demonstrators.

It’s a diverse list of US enterprises including the National Basketball Association (NBA), jeweler Tiffany & Co, leading on-line game developer Activision Blizzard, iPhone maker Apple, and Vans, the manufacturer of skateboarding shoes with street cred.

All this, of course, is against the broad backdrop of the increasingly bitter trade war between Washington and Beijing, in which both sides are using every embargo and sanctions weapon that comes to hand in an effort to gain a psychological advantage at the negotiating table.

In all cases this week the US companies have rushed to retreat or distance themselves from the words and products that excited Beijing’s ire, apparently in the hope they can keep their access to the massive Chinese consumer market.

This pandering to Beijing has angered many of these companies’ non-Chinese customers and followers. There is a consumer backlash, and even members of the US Congress have got into the act.

There are several takeaways from the clashes of the last few days.

Clashing cultures and values

The most apparent is that we are now deep into the war of clashing civic cultures and values between the People’s Republic of China (PRC) and the western liberal democracies, led by the US. This cultural and economic contest, rather than military conflict, maybe the battlefield where the struggle for global dominance is fought and resolved in the coming years.

Equally evident is that many people worldwide, especially the young, feel personal attachment to the demonstrators in Hong Kong. They see their own hopes, aspirations and fears being played out on Hong Kong’s streets. That has many potential long-term implications.

The furor began last weekend when the general manager of the NBA’s Houston Rockets, Daryl Morey, posted a Tweet supporting the Hong Kong protesters.

The pushback was immediate. Chinese state television said it would not broadcast NBA exhibition games scheduled to be played in China this week.

There were also retaliations aimed at the Houston Rockets, which has a strong direct relationship with China because the Chinese player, Yao Ming, played for the team for a decade. Two Chinese sponsors of the Rockets said they would no longer work with the team.

Morey quickly posted a new message saying: “I did not intend my tweet to cause any offense to Rockets fans and friends of mine in China. I was merely voicing one thought.”

The NBA first came out in firm support of the outrage in the PRC. In an English language statement, the association said Morey’s expression of his views was “regrettable.”

But the NBA went much further in a Chinese language message. This said the association was “extremely disappointed in the inappropriate remarks” made by Morey.

By Tuesday, things had got complicated as US lawmakers weighed in, criticizing the NBA for apparently abandoning US values of freedom of speech. NBA Commissioner Adam Silver was forced to say the organization could not “put itself in the position of regulating what players, employees and team owners say or will not say.” Though, of course, it had in its first responses.

Online game players

On the same day, Tuesday, the cultural contest sprang up in the relatively new world of professional online game players.

Chung Ng Wai is a professional player in Hong Kong of the game Hearthstone, developed by the US company, Activision Blizzard, whose stable of games includes Warcraft, Overwatch, and Call of Duty.

Chung, whose game name is Blitzchung, gave an interview after winning this year’s Heartstone contest, with its $US10,000 prize. For the interview, Chung wore goggles and a face mask, the essential accessories for Hong Kong protesters facing police tear-gas barrages.

And to ensure no one missed his message, Chung said: “Liberate Hong Kong, revolution of our time,” one of the slogans of the demonstrators.

Activision Blizzard responded quickly. Chung’s prize money was grabbed back and he was banned from competition play for five years.

Now, in the second quarter of this year, Activision Blizzard earned $173 million from the Asia-Pacific region, about 12% of its $1.4 billion revenue. But the Wall Street Journal has reported the company is trying to get permission to release in China its latest version of its massively popular Call of Duty game.

US Republican Senator Marco Rubio was outraged. He tweeted that it is intolerable that China is “using access to [its] market as leverage to crush free speech.”

Democrat Senator Ron Wyden also weighed in saying: “Blizzard shows it is willing to humiliate itself to please the Chinese Communist Party.”

At least one employee at Blizzard’s Irvine, California, campus appears to feel the same. A sheet of paper was taped over a plaque on the grounds that said: “Think Globally. Every voice matters.”

The week was still beginning when Reuters news agency reported that Vans, the Santa Ana, California maker of sneakers favored by skateboarders, had ditched a few entries for its annual shoe design competition.

Every year Vans gets about 100,000 entries for the contest, which sees the winner getting $25,000 and his or her entry manufactured.

This year, according to Reuters, the initial winning design was from someone called Naomiso in Canada. This entry included a yellow umbrella, the symbol of the Hong Kong pro-democracy movement, and there were other entries with shoes decorated with images from the Hong Kong protests.

When the issue created a minor storm on Facebook, the company acknowledged that “a small number of artistic submissions have been removed.” The reason, said the statement, was that the company has “never taken a political position.”

Also at the beginning of the week, the jeweler and up-market accessories retailer Tiffany & Co posted an online advertisement for finger rings and a T-shirt.

But the Asian model in the picture was holding her right hand over her right eye. “Eye patch” protests have been made by Hong Kong demonstrators since a woman was hit in the eye by a police pellet gun on August 11.

Tiffany issued a statement saying the picture had been taken in May, before the June start of the Hong Kong protests, and had no political implication.

“We regret that it may be perceived as such, and in turn have removed the image from our digital and social media channels and will discontinue its use effective immediately.”

Mid-week, iPhone maker Apple got caught up in the culture war when the Chinese Communist Party newspaper People’s Daily charged the company “facilitates illegal behavior.” It went on to ask: “Is Apple guiding Hong Kong thugs?” This is a clear tie-in to Beijing’s allegations that Washington is encouraging the demonstrations.

At issue is an app called HKmap.live, which allows users to report police locations and where tear gas is being used. The Beijing newspaper said demonstrators are using the app to ambush police and “threaten public safety.”

A statement from Apple said they had verified Beijing’s allegations, though many Hong Kong people told the Associated Press they only use it to avoid trouble. “This app violates our guidelines and local laws, and we have removed it from the App Store,” said Apple.

This extraordinary week of cultural skirmishes comes after months of intensified indications from Beijing that foreign companies doing business in the PRC must conform to its political view of the world or be shut out.

But US and other foreign companies that bow to these demands will only buy themselves a little time. These pressures will return, most likely with a heightened backlash at home, and companies are not going to be able to avoid the reality that civil liberties and human rights are essential parts of commerce.


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