The NBA's poisoned China chalice

The NBA has fallen into the whirlpool of hurt Chinese feelings, global discourse control, separatism and the risks from and to free speech to and from any business with PRC interests.

Daryl Morey, General Manager of the Houston Rockets, the team that brought Yao Ming to the NBA and one that is wildly popular in China, tweeted his support for the Hong Kong protests. Then the gates of commercial hell opened for him, the Rockets and the NBA.

The NBA issued different statements in English here and in Chinese on Weibo, with the Chinese one much heavier on the pandering. Then Joe Tsai, Executive Vice-Chairman of Alibaba and owner of the Brooklyn Nets, issued a statement:

As a Governor of one of the 30 NBA teams, and a Chinese having spent a good part of my professional life in China, I need to speak up.

What is the problem with people freely expressing their opinion? This freedom is an inherent American value and the NBA has been very progressive in allowing players and other constituents a platform to speak out on issues.

The problem is, there are certain topics that are third-rail issues in certain countries, societies and communities.

Supporting a separatist movement in a Chinese territory is one of those third-rail issues, not only for the Chinese government, but also for all citizens in China…

I will continue to be an outspoken NBA Governor on issues that are important to China. 

NBA Commissioner Adam Silver addressed the mess in Tokyo earlier today. He is in a very difficult spot and I am sympathetic to his comments, as reported here by Kyodo News:

"There is no doubt, the economic impact is already clear," he said. "There have already been fairly dramatic consequences from that tweet, and I have read some of the media suggesting that we are not supporting Daryl Morey, but in fact we have."

"I think as a values-based organization that I want to make it clear...that Daryl Morey is supported in terms of his ability to exercise his freedom of expression."..

"What I am supporting is his freedom of political expression in this situation," he said.

"I am also supporting Joe Tsai. I realize, as I said again, these are complex issues they don't lend themselves easily to social media. I can't ultimately run the NBA based on trying to satisfy everyone on Twitter."

"For those who choose also to engage, they'll see that we are dealing with a complex set of issues. And I will just add that the fact that we have apologized to fans in China is not inconsistent with supporting someone's right to have a point of view."

The NBA has leverage in China, if it works as a united front. PRC fans, sponsors, web sites and broadcasters can shun one team, but they can not and will not shun an entire league. Do you really think those fans are going to be satisfied watching CBA games? There would be a social stability cost to banning the NBA in China. I am serious.

This NBA episode may backfire on Beijing here in the US as there is bipartisan outrage. That said, given the DC news cycle Commissioner Silver will likely remain much more worried about CCP Commissars than the US Congress.

The broader context for this crisis is that the CCP has long pushed to increase its “international discourse power 国际话语权“, and as with many things its efforts have intensified under Xi. The idea is that China’s share of international voice is not commensurate with its growing economic, military and cultural power and that the Party should have much more control over the global discussion of all things Chinese, in any language, anywhere.

The Party is taking at least a two-track approach to rectifying this problem. On the one hand it is launching, buying, co-opting and coercing overseas media outlets. On the other it uses the power of the Chinese market to co-opt and coerce global businesses, their executives and other elite voices. The Global Times summed up the second track nicely:

The biggest lesson which can be drawn from the matter is that entities that value commercial interests must make their members speak cautiously. Chinese consumers are not overly sensitive. Wherever it is, touching a raw political nerve is extremely risky. Morey has neither the IQ nor the EQ to talk about political topics. He will become an example of clumsiness on some MBA courses.

In an interesting bit of timing, the latest episode of the US comedy show “South Park” is called “Band in China”. The punch line, on Twitter:

The full episode is available for free on the Comedy Central web site here.

The reaction from the CCP? South Park is now banned in China.

James Palmer at Foreign Policy sums up the challenge:

It will take political power in the United States to counter political power wielded by China. For U.S. companies to stop appeasing Chinese censorship, corporate decision-makers are going to have to believe that the reputational and political costs of doing so outweigh the damage done to their interests in China. That’s going to take concerted action from members of the public elsewhere in the world—boycotts, protests, public anger—and a shift in mood that makes giving in to China seem shameful or weak for CEOs among their corporate peers instead of forward-looking and pragmatic. The Communist Party’s political power can be checked, in part, by open democratic discussion of the power of Chinese money.

But it will also need targeted effort from politicians who say they care. That may mean dragging executives to testify about their decision, forcing more public embarrassment. It may mean threatening the government contracts and cozy tax breaks that firms often rely on. And ultimately, it may mean forcing tough decisions on firms about whether they can be in China at all.

I am not optimistic. Are you?

Thanks for reading.

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