KRWG

China And The NBA

Oct 21, 2019

Commentary: Two recent incidents that are still playing out illustrate the interconnectedness of the world, in this case, in relation to China. The first has to do with Houston Rockets Basketball General Manager Daryl Morey, who issued a tweet in support of the Hong Kong residents protesting against the Chinese government’s clampdown on freedoms in that province. The Chinese government’s reaction was swift in condemning Morey’s message and blocking or scaling down NBA-scheduled events in China, and canceling broadcasts of NBA games in the country. Morey quickly deleted his tweet and stated that he was merely, “Stating one thought,” meaning his comments were his alone.

Morey’s tweet and China’s reaction put NBA Commissioner Adam Silver in a tight spot. He quickly issued a statement that said, “We recognize that our two countries have different political systems and beliefs. And like many global brands, we bring our business to places with different political systems around the world. It is inevitable that people around the world -including from America and China - will have different viewpoints over different issues. It is not the role of the NBA to adjudicate those differences.” Silver goes on to say that his league will not regulate what players, employees, and team owners have to say on political issues such as Hong Kong. He then closes the memo by stating, “Basketball runs deep in the hearts and minds of our two peoples. At a time when divides between nations grow deeper and wider, we believe sports can be a unifying force that focuses on what we have in common as human beings rather than our differences.”

On the heels of the NBA’s controversy in China, another one transpired related to Apple. The company has partnered with an outside developer to offer a smartphone app called HKmap.live that allows users to report police movements, a particularly effective tool in protest-racked Hong Kong. The app is available on Apple’s online site. The People’s Daily, which is the Chinese Communist Party’s newspaper, accused Apple of directing thugs involved in the Hong Kong riots, and warned Apple that it is damaging its standing with Chinese consumers. What the Chinese government really meant was that it was damaging its reputation with the Chinese government, which can bring to bear actions that could hurt the company.

China’s government is made out of glass when it comes to criticism, from both internal and external parties. It is steadfastly determined to manage a hybrid capitalistic economy, while adhering to the centrist communist strategy of the past in controlling its citizens. It is particularly sensitive to outside forces through which its citizens can be influenced. The NBA is very popular in China, especially after the Chinese basketball star Yao Ming, who played in the NBA -, ironically from the standpoint of the current NBA-China controversy, for the Houston Rockets - from 2002 to 2011. Many people view the NBA’s delicate handling of the situation as a sign that it is kowtowing to a bully. U.S. citizens and companies have a right to free speech and the development of their own business models – these are inalienable rights.  However, the use of free speech can often have negative consequences when it comes to business.  

Is it as simple as saying the U.S. and its companies should withdraw from world economics and politics and just focus on domestic issues? This is unrealistic, because the U.S. accounts for less than five percent of the world’s population, and approximately 22 percent of the world’s GDP. If the U.S. wants to grow its economy and remain a competitive force throughout the world, our companies must establish business in other countries, such as China, which is the most populous country in the world and the second largest economy.

It is good that NBA- and Apple-type controversies with China occur. They serve to highlight to the world the lines in the sand that the Chinese government creates when it feels its citizens are being unduly influenced by outside forces. As more and more foreign companies trade with China, and its companies establish business throughout the world, the Chinese government is going to have to resolve the question of how much freedom that is demanded by its citizens is going to be granted. Limiting NBA activities in China is bound to rile up Chinese fans who are not involved in any current controversy, and make them realize how petty the controlling forces in the government can be.

With the proliferation of worldwide trade and social media, it will be impossible for China to put the genie back in the bottle when it comes to limiting the forces shaping the beliefs of its citizens. After more than 30 years of transforming its economy and connecting it to the world, China finds itself at the unusual crossroads of being connected politically and socially, whether it likes it or not, to the rest of the world. This entails dealing with a little criticism and outside support of protestors within the country.  

Jerry Pacheco is Executive Director of the International Business Accelerator, a non-profit trade counseling program of the New Mexico Small Business Development Centers Network, and the President/CEO of the Border Industrial Association.  He can be reached at 575-589-2200 or jerry@nmiba.com