Corporates stumble in Hong Kong
The trouble in Hong Kong stands between the values Western companies espouse and the lucrative Chinese market. It is not the first time international corporates have struggled to square their values with business in communist China. But protests in Hong Kong have made it more difficult.
Late last week, John Keefe, head of investigations for the USbased news service Quartz, posted on Twitter. ‘‘Apple just took the Quartz app out of the Chinese app store at the request of China ... Our excellent @qz coverage of Hong Kong protests may be the reason.’’
It is just the latest in a string of concessions Apple has made to placate China. The tech giant recently removed the mapping app, HKmap.live, used by Hong Kong protesters to track both police and protests in the city.
It has also deleted the Taiwanese flag from its emojis for the latest iPhones in Hong Kong and Macau.
Bowing to the Chinese pressure is a remarkable contradiction in an age when conventional marketing wisdom holds that companies and their products must hold moral values in order to court Western world customers. Indeed, polls regularly show consumers insist they want products that stand for something more than their own prosaic end: a tasty sandwich or a sleek phone.
For years, companies like Apple have navigated the Chinese market by steering clear of local politics, and informally warning ‘‘in-country employees’’ to do the same, according to Hans Hendrischke, a professor of Chinese business and management at the University of Sydney business school.
Sometimes, especially in the case of internet companies Facebook and Google, they struggled with Chinese censorship rules and even withdrew. Others, including airlines, fell foul of Beijing on relatively predictable subjects, like Taiwan. But many firms achieved a kind of balancing act.
They espoused values like individual rights and freedoms outside China (if not actively, then passively accepting employees’ rights to express their views). Inside China, they operated apolitically enough not to attract the ire of the state or the legions of patriotic Chinese consumers who often side with their authoritarian government.
That uneasy balance shifted when anti-government protests erupted earlier this year in Hong Kong, a former British colony now under Chinese rule but with significant autonomy.
Apple, for example, has for years been ringing up tens of billions of dollars’ worth of sales in communist China, even as chief executive Tim Cook staunchly defended democratic values at home.
In 2017, in Washington DC, Cook accepted a ‘‘Free Expression Award’’. In his remarks he championed rights, among them: freedom of expression, of speech and peaceful assembly, and the right to petition government for the redress of grievances.
‘‘This is a responsibility that Apple takes very seriously,’’ Cook said. ‘‘First we defend, we work to defend these freedoms by enabling the people around the world to speak up. And second we do it by speaking up ourselves. Because companies can and should have values.’’
Those views are impossible to square with Apple’s recent moves in China.
Paul Argenti is a professor of corporate communications at the Dartmouth College Tuck School of Business in New Hampshire. Companies, he says, should be aware of the different demands made by China.
‘‘They have a different set of values. Companies want to do business with China and they also want to allege they are standing up for freedom of speech. But they can’t have it both ways.’’
That is nettlesome for a wide range of companies, not just Apple. The anti-Beijing protests (which China views broadly as a separatist movement in its home territory) have become a doubly sticky issue. On the one hand they are the subject of enormous sensitivity for China.
And on the other, they have attracted close scrutiny by outsiders, not the least of whom are dismayed employees of companies active there.
In June, sporting goods giant Nike dropped a line of shoes from Chinese stores after the studio of the brand’s Japanese designer posted a photograph of Hong Kong protesters on Instagram with the text, ‘‘no extradition to China’’. The post prompted a backlash by Chinese consumers on social media.
The NBA provides yet another example. Last week a quickly deleted tweet – ‘‘Fight for Freedom. Stand with Hong Kong’’ – by the general manager of the Houston Rockets set off a furore that resulted in Chinese sponsors withdrawing millions of advertising dollars from the league and included China’s state broadcaster dropping plans to air upcoming NBA pre-season games. While the NBA and others apologised, NBA boss Adam Silver did later insist the league would support, ‘‘freedom of expression’’.
The only certainty appears to be that the hotter things get in Hong Kong, the more awkward ethical conundrums there will be for Western companies.