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The Journal Gazette

  • Associated Press A woman carrying a bag containing goods from American brand Abercrombie & Fitch walks past an Apple store at the capital city's popular shopping mall in Beijing. Companies who do business with China walk a fine line to stay aligned with U.S. values such as freedom of speech and democracy while avoiding offending China.

Wednesday, October 09, 2019 1:00 am

Businesses balancing US values versus making money in China

MAE ANDERSON | Associated Press

NEW YORK – The furor over a tweet by the Houston Rockets general manager in support of Hong Kong protesters is highlighting the fine line that U.S. companies must walk when doing business with China.

The NBA is trying to manage that delicate relationship after Daryl Morey posted a now-deleted tweet of an image that read “Fight for Freedom. Stand with Hong Kong,” referring to the 4-month-old protests in the semiautonomous Chinese territory. That set off an immediate backlash, with China's state broadcaster canceling plans to show a pair of preseason games in that country later this week.

With a population of 1.4 billion people, a rapidly growing middle class and easing economic restrictions, China is highly appealing to U.S. companies looking for growth overseas. But companies must balance the potential for growth with the potential for pitfalls in dealing with a country that aggressively goes after its detractors.

Paul Argenti, professor of corporate communication at Dartmouth's Tuck School of Business, cautions that companies should know what they're getting themselves into when they enter a relationship with a country that's heading into 70 years of communist rule.

“It has a regime that doesn't look like the United States,” Argenti said. “We can pretend it is a democracy, but it's not.”

Western governments dislike China's attacks on companies but are unlikely to get involved, said David Zweig, a politics specialist at the Hong Kong University of Science and Technology. So it's up to companies to navigate situations themselves.

Most of the time that means companies that face trouble quickly acquiesce to Beijing, apologize and try to “build bridges” instead of standing up to China, said Jonathan Sullivan, director of China programs at the University of Nottingham's Asia Research Institute.

In 2018, Gap pulled a shirt with a map of China that did not include Taiwan, a self-ruled island that Beijing regards as Chinese territory, and apologized.

Delta Air Lines, hotel operator Marriott and fashion brand Zara have all apologized to China for referring to Taiwan, Hong Kong or Tibet as countries on websites or promotional material. And Mercedes-Benz apologized for quoting the Tibetan spiritual leader, the Dalai Lama, in a social media post.

“Everyone – states and companies – seem to accept that they have to tread on eggshells when it comes to China for fear of offending them and being punished,” Sullivan said in an email.