ANALYSIS: Doing business in China is difficult. A clash over human rights is making it harder

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'An escalating diplomatic dispute over human rights is underscoring the stark choice facing Western executives: Put profit or principles first'

The strains over Xinjiang — where US, EU and UK authorities have accused the Chinese government of repressing Uyghurs and other minority groups through forced labor, mass detention and sterilization — has ensnared a growing number of businesses and trade relationships in recent months.

Beijing has made it clear that multinational corporations have to follow its rules if they wish to operate in the country, and gaining favor can require anything from abiding by restrictive regulations to saying a few good words about China. Many companies have traditionally been willing to play along, given how enticing the giant economy is as a market for everything from cars and clothes to movies and luxury goods.

But breaking into China also means winning over notoriously strict regulators who wield vast control over who gets to enter and what they get to do. And in 2019, the NBA became entangled in its own battle with Beijing after sports executive Daryl Morey, who was serving as general manager of the Houston Rockets, tweeted support for pro-democracy protesters in Hong Kong. Chinese state television network CCTV pulled NBA games, while all of the league's official Chinese partners suspended ties.

"The Chinese have huge economic leverage," Glaser said."They always do this in ways that they are harming a particular sector or industry or particular company, but where China pays no cost." The NBA, for example, didn't just anger Chinese audiences when it attempted to explain the remarks from the Houston Rockets' Morey about Hong Kong. A lukewarm response from NBA Commissioner Adam Silver that supported Morey"in terms of his ability to exercise his freedom of expression" didn't just infuriate Chinese audiences; US politicians criticized the organization for not taking a strong enough stand.

 

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Western businesses made China rich by prioritizing private profit-making above any other considerations including patriotism and concern for ethics. The concept of human rights is alien to most businesses. I speak from experience as I worked in a giant MNC that operated in China.

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