FINANCIALLY SPEAKING China vs. the NBA
Houston Rockets general manager Daryl Morey recently posted a tweet supporting pro-democratic demonstrations. The tweet was an image that read “Fight for Freedom. Stand with Hong Kong” and was in support of protests that began last month when Hong Kong officials created the Fugitive Offenders and Mutual Legal Assistance in Criminal Matters Legislation Bill 2019.
According to Wikipedia, it was “a proposed bill regarding extradition to amend the Fugitive Offenders Ordinance (Cap. 503) in relation to special surrender arrangements and the Mutual Legal Assistance in Criminal Matters Ordinance (Cap. 525) so that arrangements for mutual legal assistance can be made between Hong Kong and any place outside Hong Kong. The bill was proposed by the Hong Kong government in February 2019 to establish a mechanism for transfers of fugitives not only for Taiwan, but also for Mainland China and Macau, which are excluded in the existing laws.”
In short, the bill allowed the Chinese government to go outside of China and arrest citizens of foreign nations. The bill has been tabled for now, but the protests have not stopped. The Hong Kong citizens are still peacefully protesting the encroachment of the China state.
The Houston Rockets have long been “China’s Team” since Hall of Famer Yao Ming, a resident of China, played for the Rockets back in the 2000’s. However, their team is now being blacklisted. NBA commissioner, Adam Silver, came after responding to the tweet of Morey. Silver was quoted as saying, “it is inevitable that people around the world — including from America and China — will have different viewpoints over different issues.”
Silver, in a statement Tuesday, went on “it is not the role of the NBA to adjudicate those differences.
However, the NBA will not put itself in a position of regulating what players, employees and team owners say or will not say on these issues. We simply could not operate that way.” Silver wants to keep ties with China strong as the Chinese bring in billions of dollars of revenues to the NBA. A few days later Silver awkwardly backpedaled on his stance saying he believes in freedom of speech and supports Morey and his personal beliefs.
Although the NBA is not a publicly traded company, American citizens as well as citizens throughout the free world are watching closely as to how other companies respond, especially those with close economic ties to China. Activision/Blizzard (ATVI), a video game company just suspended professional gamer after his support for the protests.
The media, as are we, are witnessing how these companies react to the ongoing tensions.
We believe China is a major economic threat to the United States. That will not nor should it change as America welcomes competition. Where we as well as others have a problem is how the Chinese government treats their own citizens. It is now time for U.S. Companies to stand up to China that in addition to the above, continually steals our Intellectual Property. Whether Democratic or Republican, left of center or right, we believe this is something that as a nation, we should unite against.
Although China is a major part of the global economy, we cannot sit still and continue to let China do whatever they want without suffering the consequences. In may hurt our economy/financial markets over the shortterm and create volatility.
Economic sanctions may be the only course of action that may stop China from continuing their corrupt policy of economic piracy and more important, violations of human rights. We call for China to take a bold step and to leave their suppressive policies behind. and more from the world.
We will continue to monitor companies and their response to what is going on in China. Our belief is that, although standing up to China may hurt the profits of American companies and their stock prices over the short term, America needs to follow its moral compass rather than the dollar sign. This will in turn win out for the shareholders over the long run.
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