[Viewpoint]China bullies international firms

Tiananmen Square and the Forbidden City may be the most well-known tourist attractions in Beijing, China. After the collapse of the Qing dynasty, which succeeded the Ming dynasty, the name of the Forbidden City was changed to the Palace Museum in 1925 and it was opened to the public. The museum is now crowded with visitors, both Chinese and foreigner.
A few days ago I looked for the Starbucks coffee house inside the Forbidden City, which recently created an uproar in Chinese public opinion. If not for the help of a guide, I might not have found the place because it did not stand out at all. The green Starbucks logo that hangs outside every Starbucks store in the world was not there. The store looked shabby and curled up on one side of the backyard of the royal audience hall, the Hall of Supreme Harmony. Compared to the huge main hall of the palace, which measures 60 meters (200 feet) from east to west and 33 meters from north to south, the Starbucks store, with less than 6 square meters of space, looked tiny.
I wondered whether it had gone out of business already, but they were still there, serving cappuccinos and caramel macchiatos. There was not even a Starbucks logo inside the store. Only when I studied my coffee cup carefully, I found the name “STARBUCKS,” both in English and Chinese, written in tiny letters.
The power of Starbucks, which now has about 9,000 stores around the world since the first one opened in Seattle in 1971, could not be seen in the Forbidden City.
They say that the store will be open only through the end of the month.
This is just three months after Rui Chenggang, an anchor man with the government-affiliated China Central Television, claimed on his blog that the Starbucks shop inside the Forbidden City should be closed down because “it undermined the solemnity of the old palace and hurt China’s cultural identity.” And it was the achievement of the Chinese Internet users who ganged up on the “insolent Starbucks” that violated the pride of the “great Chinese people.”
The store had managed to conduct business without trouble for the past six years and even signed a contract for another two-year extension recently. However, the legitimate contract has become nothing but a useless piece of paper. Starbucks, which has about 200 stores in China and plans to build hundreds more every year, backed down without even making a claim to its own rights. Other international companies that have advanced into the Chinese market are experiencing a similar humiliation.
Starting with McDonald’s, the biggest fast-food chain in the world, even KFC and Pizza Hut gave in to the pressure of the Chinese labor unions only two weeks after they got caught up in a controversy over exploiting labor and offering low wages.
An official in charge of labor policy at the Guangdong provincial government said, “We can not confirm whether there were any violations of the law,” and the businesses concerned said they had “abided by the Chinese law.” But the Chinese government accommodated demands for the establishment of labor unions in international businesses after public opinion started to flare up.
They made that painful decision because they were worried that the businesses of about 3,000 McDonald’s, KFC and Pizza Hut stores in China would suffer a serious blow if the complaints of Chinese consumers were systematically organized. There was also the opinion that they raised the white flag of surrender when the Chinese government, which stressed the need to strengthen the rights of workers, press and the labor unions, formed a united front.
China, using the power of its domestic market, with a population of 1.3 billion, is brandishing an omnipotent sword on international businesses all over the world. Prominent global companies such as Google, Carrefour and Sony are not exceptions in the face of Chinese pressure.
We cannot blame China for making an strenuous effort to enhance its competitiveness and expand its sphere of influence. However, if it forces international businesses to follow its rules and takes advantage of its big market, it is an unfair game and an exercise of hegemony.
Even so, things are a little better for the American companies. The U.S. government launched deputy prime minister-level economic strategy talks with China in November. By inducing China into the frame of intergovernmental dialogue, the U.S. government is trying to secure the interests of U.S. companies to the maximum extent. I wonder whether anyone will speak for the Korean companies that cannot cry out when they are victimized by China.

*The writer is a Beijing correspondent of the JoongAng Ilbo.

by Zhang Se-jeong