The author is the head of the industry team at JoongAng Ilbo.
American pride took a hit after the National Basketball Association (NBA) kowtowed to the Chinese to avoid doing anything to threaten its $4 billion market and potential for tapping an audience of 1.4 billion. The preseason game between the Los Angeles Lakers and Brooklyn Nets did take place in Shenzhen, China, last weekend as scheduled. Live coverage was permitted despite the Chinese government’s earlier warning. The NBA did not issue an apology as demanded by the host, but nevertheless expressed regret over a spat triggered by a simple tweet in support of Hong Kong protesters from Houston Rockets’ general manager Daryl Morey. Beijing stopped itself from going too far — canceling the preseason games and blacking out coverage.
Still, China excluded the Houston Rockets — which used to be the most popular NBA team in China before Morey’s tweet — from live broadcast schedules. Its games will be banned indefinitely by China’s state-run broadcaster CCTV. Multinational enterprises and observers around the world were awed by the swift and concerted sanctions from China, ranging from government authorities to apparently sincere outrage from the hoi polloi. Beijing issued a statement, followed by CCTV’s announcement not to cover NBA games and Tencent’s threat to cancel sponsorship of the internet live feed. Fans went viral with a boycott, ripping up their tickets, and 12 out of 25 Chinese companies called off their sponsorships.
The NBA is not the only one to suffer. Multinationals like Apple, Blizzard and Google have caved in to Chinese pressure. Apple removed HKmap.live, a crowdsourced map app that shared data on Hong Kong’s pro-democracy protests and police activity. Blizzard banned its Esports players from game tournaments over their comments on Hong Kong and Google deleted a game based on the Hong Kong protests from its Google Play Store. They now face consumer boycotts in other countries for bending their principles for commercial interests.
The South China Morning Post in Hong Kong observed that gone are days when multinational enterprises only needed to beware of the three taboos: Tibet, Taiwan, and Tiananmen. Beijing has become blunter in its censorship and pursuit of Sinocentrism. Social media made matters worse.
Americans are beginning to regard the situation with gravity. The New York Times noted that American soft power — blue jeans, rock music, Coca-Cola and Hollywood — that prevailed over the Soviets does not work against the Chinese. All the icons of American culture — Apple, Disney, Lady Gaga, and lately the NBA — must get used to taking orders from the Communist Party of China.
These developments pose a serious challenge to Korean companies deeply invested in the Chinese market. They are no strangers to the bullying ways of Beijing. They did not even have the luxury of making choices a few years ago. Hyundai Motor and Kia Motors have not recovered from a Chinese consumer boycott launched after South Korea deployed the Terminal High Altitude Area Defense (Thaad) antimissile system that Beijing vociferously opposed. Lotte Group had to sell its grocery chain, Lotte Mart, after losing nearly $3 billion in the Chinese market after it became the primary target for retaliations in the Thaad controversy. It had swapped a golf course that became home to the missile defense shield at the request of the military.
Korean companies should become extra vigilant as they grapple with multiple challenges: export curbs from Japan, a trade war between the United States and China and Hong Kong risks. They are advised not to make any comments related to Beijing’s One China policy or the Hong Kong protests.
But if Korean companies come under fire from China once again for political reasons, there is no other way but to surrender like the NBA, Apple and others. As seen in the past, the government is of little help. They can only brace for the challenge by diversifying their export markets and devising an exit plan to minimize any damages. That can be easier said than done, as such a gigantic market as China cannot be dismissed easily.
JoongAng Ilbo, Oct. 16, Page 30