Orwellian Nonsense: Don’t Fear China’s Boycott Threats

If history is any guide, the latest dispute over Taiwan will fizzle.
By Adam Minter
It’ll be fine. 

The Chinese government has given the world's airlines until July 25 to recognize Taiwan as part of China. 

So far, Delta Air Lines Inc. and American Airlines Group Inc. are among the very last holdouts. According to Bloomberg News, if the companies don't comply, China could "prompt travelers from the mainland to boycott American airlines."
The airlines are understandably concerned about this threat, given that China is a key growth market. But the fears are overblown: Chinese consumer boycotts have historically been short-lived and relatively painless, and there's little reason to believe that this one will turn out any differently.
The airlines are caught up in a long-running dispute. 

China regards Taiwan as a wayward province, and its self-image and geopolitical vision are deeply connected to reunifying the two territories. 

Pressuring foreign companies to refer to Taiwan as part of China -- on tickets, website drop-down menus and so forth -- is a means of advancing its foreign policy.
But like shoppers anywhere, China's consumers tend to be value-oriented more than anything else, and surveys indicate that while patriotism plays a role their purchasing decisions, quality, brand and price are typically far more important.
Hence a decade's worth of short, over-hyped Chinese boycotts.
The first notable one occurred in April 2008, after a Tibetan activist attempted to seize the Olympic torch as it was paraded through Paris. 

In Shanghai and other cities, protesters surrounded stores owned by French supermarket chain Carrefour SA as part of a general boycott. 

Keeping up that effort proved challenging, though, especially in China's summer heat. 

And before long, Chinese had turned their attention to other matters -- like the Olympics. 

Less than three months after the closing ceremonies, Carrefour announced 10 new store openings in booming south China. 

Shoppers flocked to them.
Similarly, after a territorial dispute with Japan erupted into violent protests across the mainland in August 2012, a boycott caused Mazda Motor Corp.'s sales to decline by 36 percent. 

But that drop, too, was short-lived. 

By November, sales were recovering (even as China faced its worst auto-market growth in a decade) and by April Japanese car exports were up by more than three-and-a-half times over their October low. (Post-boycott discounts likely helped.)
Protests targeted at specific corporate missteps also typically fizzle. 

Last year, footage of passenger David Dao -- who is partly of Chinese descent -- being beaten and dragged off a United Express flight in Chicago received tens of millions of views per hour in China, sparking calls for boycotts and widespread speculation that the airline's reputation would be permanently damaged among Chinese consumers. 

Despite the fury, United remains the largest foreign operator between China and North America.
Where company boycotts have been more successful, they've usually coincided with bigger problems. 

For example, when South Korea agreed to host an American antimissile system in 2017, a resulting protest appeared to put a big dent in Korean car sales in China. 

But that decline had actually begun before the protest, partly due to stiffening local competition and a poor mix of models on offer for the Chinese market. 

China's enthusiasm for other South Korean products -- such as soap operas and cosmetics -- continued unabated.
For similar reasons, Chinese passengers are unlikely to sustain a boycott of U.S. airlines. 

The government has long restricted domestic competition on the most popular routes to North America. 

And customers looking for choice, convenience and seamless transfers to U.S. cities will naturally turn to American carriers to provide them -- however they refer to Taiwan. 

Few fliers are going to choose Air China over Delta if Delta's prices and travel times are superior.
Of course, even a brief boycott can inflict damage. 

And the airlines can't dismiss this controversy entirely; China could also impose measures such as air-traffic control delays and intensified inspections. 

But like their counterparts everywhere else, Chinese consumers are far more interested in whether a product meets a need and a budget -- and far less on whether it was made by a rival.

China's Orwellian nonsense

U.S. Airlines Unbowed by Beijing’s Demand to Call Taiwan Part of China
Delta, American and United hold out after Chinese insist they change websites, other materials
By Trefor Moss

A United Airlines Boeing 777 takes off from Hong Kong. 

SHANGHAI—Many global airlines have bowed to Chinese demands to refer to Taiwan as part of China, but a handful of others—including the three main U.S. international carriers—haven’t, amid a U.S. backlash against Beijing’s insistence on conformity with its views.
The U.S. airlines look to be taking their cue from Washington, with a bipartisan group of U.S. senators urging the carriers to stand up to Chinese bullying and the White House branding China’s request “Orwellian nonsense.”
“We have deferred the matter to the U.S. government since this is a diplomatic issue to be resolved among governments,” a United Airlines spokesman said in a statement given to The Wall Street Journal on Wednesday.
Though China claims Taiwan, the island is run by its own democratically elected government.
A spokeswoman for Delta Air Lines, which has yet to change its stance, said the airline was in close consultation with the U.S. government on the matter. 

An American Airlines spokeswoman declined to comment on the carrier’s noncompliance.
Other holdouts as of Thursday included Japan’s ANA and JAL, Korea’s Asiana and Korean Air , Air India and Vietnam Airlines. 

These carriers are from countries with historical or political reasons for wanting to stand up to China—including territorial disputes. 

Beijing has set a June 24 deadline for compliance.

A model China Southern Airlines Co. aircraft displayed at the Guangzhou Baiyun International Airport in Guangzhou, China, last month. U.S. airlines have thus far not bent to Beijing’s demands to refer to Taiwan as part of China. 

“This is another example of China using its growing global heft to ensure that its view of the world informs the behavior of organizations, countries and companies world-wide,” said Kenneth Jarrett, president of the American Chamber of Commerce in Shanghai.
“For companies doing business in China this may eventually boil down to a choice: Amend your global websites to reflect China’s view of its territorial sovereignty, or face being excluded from or disrupted in the China market,” Mr. Jarrett said.
China wrote to airlines in April demanding that they change their websites and other materials—not just in China, but globally—and adopt language approved by Beijing regarding self-ruled Taiwan.
Hong Kong and Macau, which are special administrative regions of China, are also included in the order.
Airlines were initially given 30 days to comply, though the deadline was later extended until June 24 to give them extra time to make the required changes. 

Airlines that don’t comply are liable for punishments including more frequent government inspections and the loss of landing slots at Chinese airports, according to China’s civil aviation authority.
The country’s authorities are more aggressively demanding that consumer-facing information reflect China’s world view. 

This year alone, at least a dozen U.S. and other Western brands and companies—including Marriott International, the Zara apparel chain and Daimler’s Mercedes-Benz unit—have drawn Beijing’s ire for what it considered inflammatory content.

The Taipei Marriott hotel earlier this year. The international hospitality giant has come under fire from China’s government. 

Most companies have acquiesced, fearful of being cut out of the world’s second-largest economy. Marriott even fired an hourly worker who used a company Twitter account to “like” a tweet by a Tibetan separatist group. 

Beijing has zero tolerance for "separatist" movements in Tibet, which is a colony of China.
But China’s latest demands are drawing political counter-fire in the U.S., from the Trump administration and from the bipartisan group of senators, which wrote to U.S. airline chief executives last month vowing to oppose Chinese interference in American companies.
The demands come against a backdrop of trade tensions between the U.S. and China and more interaction between Washington and Taipei.
The U.S.-backed American Institute in Taiwan on Tuesday opened a new $240 million de facto embassy in the Taiwanese capital, a move which drew stern criticism from Beijing.
Surprisingly, two Hong Kong-based airlines with strong links to the Beijing government have so far not made the changes demanded.
Cathay Pacific is 20%-owned by state-run Air China, while Hong Kong Airlines is controlled by HNA Group, another Chinese state company. 

Yet the two carriers don’t describe Taiwan as part of China or refer to Hong Kong as a special administrative region of China.
Neither airline responded to questions.
Among the airlines that have complied with China’s wishes are Air France , British Airways, Lufthansa , Emirates, Qatar Airways, Malaysia Airlines, Philippine Airlines, Singapore Airlines , Thai Airways , Turkish Airlines and Air Canada. 

They now refer to “Taiwan, China” in their list of destinations.
Australia’s Qantas had yet to make changes to its website, though its chief executive, Alan Joyce, said last week that the airline would do so before the deadline.
A spokesman for Montreal-based International Air Transport Association said China had set out some “very stringent requirements” in demanding that airlines make global changes.
“Airlines are nonpolitical businesses serving many global markets,” he said, adding that they find it tough “when government requirements are politically rather than operationally motivated.”

Rogue Nation

How China forces American companies to do its political bidding
By Josh Rogin 

As China’s economic might grows, Beijing is leveraging that power to coerce foreign companies to advance its political narrative and punish them when they step out of line. 

The Chinese Communist Party’s treatment this month of hotel giant Marriott after a minor website error takes the effort to a new and dangerous level.
In Washington, the Chinese government’s overreaction to Marriott listing Taiwan, Tibet, Hong Kong and Macau as “countries” on an emailed questionnaire has sparked alarm. 

Trump administration officials, lawmakers and experts said the Communist Party is escalating how far it is willing to go in enforcing strict adherence to its political positions among foreign actors.
After a Marriott Rewards employee “liked” a Jan. 9 tweet by the “Friends of Tibet” group praising the questionnaire, Chinese authorities called in Marriott officials for questioning, shut down their Chinese website and mobile apps, and demanded an apology. 

The Jan. 11 apology from Marriott CEO Arne Sorenson parroted the language the Communist Party uses to describe groups that stand opposed to Chinese repression or advocate for Tibetan autonomy. 

“We don’t support anyone who subverts the sovereignty and territorial integrity of China and we do not intend in any way to encourage or incite any such people or groups,” Sorenson wrote.
Marriott has more than 300 hotels in China, its second-largest single market, after the United States. While it began disciplinary proceedings against the employee who “liked” the offending tweet, Chinese netizens scoured the Internet and found dozens more foreign corporations that had listed as countries territories that are claimed by China. 

Chinese Internet bots fueled the purportedly popular outrage.
Corporations including Delta Air Lines and Zara rushed out apologies of their own. 

But the Chinese government didn’t stop there. 

Dozens of companies were told to scrub their websites for any related content or face severe consequences. 

The state-run media organ China Daily piled on with an op-ed headlined “No flouting of China’s core interests will be tolerated.” 

Chinese government officials even threatened the family of a Chinese student in Canada who responded favorably to the Friends of Tibet tweet.
By combining government power, manufactured public outrage and negative state-sponsored media coverage, the Chinese government can place massive pressure on American companies to tow the party’s political line. 

That aggressiveness is now becoming an issue in the U.S.-China relationship.
“Everyone should be deeply concerned by the PRC’s growing comprehensive campaign to exploit trade and commerce to advance its global Communist agenda,” Sen. Ted Cruz (R-Tex.) told me. 

“For decades the Communist Party has limited speech within China on topics and opinions that threaten their one-party rule, and we are now seeing this form of information warfare influence the way American companies conduct business.”
For example, by parroting the Communist Party line on Tibet, Marriott helps the Chinese government whitewash its systematic and brutal repression of Tibetans. 

As the International Campaign for Tibet wrote in a letter to Sorenson, Marriott could have changed the emailed questionnaire without endorsing China’s political position on Tibet.
“China has been continually attempting to silence international public debates on the issue of Tibet, and your statement unfortunately furthers their efforts,” the group wrote, pointing out that the Chinese propaganda machine can use Marriott’s statement to further undermine Tibetan human rights.
The question for Washington policymakers is: Where does this end? What if a Tibetan group wanted to hold a conference at a Marriott hotel in Washington? Would Marriott be within its rights to prevent that? Does official Washington have a role to play?
Rep. Mike Gallagher (R-Wis.) told me that as China becomes more brazen in its efforts to coerce or control American businesses, the United States must devise a comprehensive public-private effort to push back.
“This is only the latest in a long pattern of the Chinese government leveraging access to its marketplace to extract painful concessions from foreign businesses,” he said. 

“Our actions, or lack thereof, can influence their behavior. To this end, we need to stand firm in defense of American interests, both security and economic.”
For now, Marriott is more concerned with how it is viewed in Beijing than in Washington. 

A Marriott spokeswoman said the company had no response to the concerns of lawmakers or human rights groups about its behavior.
Marriott International Asia Pacific President Craig Smith turned down an interview request from me but gave an interview to China Daily, in which he called the incident probably one of the biggest mistakes of his career. 

In fact, the biggest mistake that American corporations can make is allowing themselves to be used as tools by the Chinese Communist Party to advance illiberal norms.
Washington is awake to the threat of Chinese economic coercion of American companies for political objectives. 

Now policymakers must persuade corporations to ask themselves if there is a larger interest at stake than their bottom line.