Policy Summary:
Earlier this month, the surging video communications company Zoom joined the growing ranks of enterprises that have made concessions to or followed Chinese directives on content, censorship, and other aspects of company policy. On the 31st anniversary of the Tiananmen Square Massacre, several activist groups that had organized meetings over Zoom had their accounts suspended and later reinstated following public backlash in the West, with Zoom attempting to strike some semblance of compromise by promising to develop applications for the control of accounts based upon geographical location. As many companies have already discovered, the tantalizing consumer base in China comes packaged with strings, and these strings are often at odds with Western conceptions of free speech in the capitalist market.
The past and current year have been full of such clashes between the demands of the CCP party line and the expectations of Western consumers for their beloved corporate powers to champion the all-American values of democracy and free speech. The General Manager of the Houston Rockets made a now notorious tweet expressing support for the pro-democracy Hong Kong protests, which was met by a statement of condemnation from China and an apologist statement by the NBA that would later be walked-back following public outcry. In a similar episode, Activision Blizzard banned an e-sports player from official events for a year in response to said player voicing support for Hong Kong autonomy during a live-streamed interview, along with firing the two casters conducting the interview. Once again, Blizzard walked back the severity of the punishment following Western public backlash, reducing the bans on both the casters and the player to six months.
Looking at the NBA, Blizzard, and Zoom as case studies in this emerging phenomenon, one notices immediate parallels. All of these companies have significant and growing consumer bases in China. 10% of total NBA profits are currently generated in China, with this being projected to only increase to 30% in the years to come. In 2019, Blizzard made almost $100 million in revenue in China. Zoom has regularly listed China as one of its top markets and around 30% of its workforce is based in the country. All three of these companies, and all companies within the international market for that matter, have a lot to lose if they resist the demands of the CCP.
Analysis:
If I may be blunt and let a bit of my more radical, liberal-arts background peek through, what Western audiences are confronting with such consternation is the purpose, and by extension the inevitable limits, of the capitalist market that they so strongly cling to. The purpose of an enterprise within capitalism is the generation of profit. It is not to respect free speech, freedom of assembly, or what have you. If these concepts and their support increases one’s revenue, praise be! A corporation, a company, a capitalist entity within the market is meant to make money. Everything else is secondary. Therefore, if (in a wholly hypothetical situation of course) an authoritative regime demands certain concessions in order to allow a company access to a demanding consumer population, it is by all the best logic of capitalism that a company does so.
However, this linear thinking of capitalism does not account for the issue of world systems. The U.S. is and continues to be the greatest consumer market in the world. China, despite its formidable capacity, will not surpass it for at least a few decades by most accounts. Companies within the world market must therefore contend with the competing giants of the dominant American-led, Western market demands and the growing CCP-controlled market demands. In the West, enterprises are expected to uphold and respect the tenets of democracy, free speech, etc. In China, the CCP expects enterprises to censor certain topics, encourage public stability, and maintain a relatively positive image of the party. These two systems do not play nice with each other for obvious reasons. I feel almost sorry for Zoom and the others. How is one to make money off both?
American and Western audiences expect their businesses to preach and support democratic values. Capitalism and the American identity have become so intertwined by our nation’s very founding by the Virginia Company, the fight against communism, and much more that we forget that capitalism does not care about our identity. Sure, the people within a company might, but capitalism cares about growth and profit. Politics, ethics, and what have you only becomes of interest when it impinges upon them. And at the moment, it does not appear that CCP demands have in any way stifled their economy. State-led capitalism has in fact seemed to have ushered in an extremely long-winded period of unrivaled growth and expansion within China.
I see three options for companies in the current world market. One, they can continue on their current course of stumbling between the CCP and the West, giving out and redacting apologies and condemnations depending on which system pushes harder. Two, they can choose to operate solely within the Western or Chinese market system. This eliminates any possible tension because due to the following of only one ruleset but brings with it the cost of losing out on a formidable consumer base. Or three, they can go the road of Zoom. This would most probably look like the provision of tools for CCP censorship use and control, the isolation of U.S. consumer information from Chinese sources, and the donning of a public image of walking an incredibly fine line.
I also see two options for Western, and particularly America, consumers. One, we can accept that companies will pursue profit and that this is simply the natural outcome of our market system. This would involve the surrendering of the notion that businesses based or founded in the U.S. should pursue our values in all areas of operation. Or two, we can demand that companies operating or founded in the U.S. enforce and support the propagation of American ideals. This would most probably involve boycotting companies that fail to do so, public action, policy from the government, and substantial growing pains as the companies in question choose sides. However, I would argue that both options must include some degree of disassociation of capitalism from the American identity. We must realize that although capitalism may have been integral in the formation of the U.S., it is not ours to claim sole ownership of. It has only been stained with our values within our system. Its core has not changed to fit free speech or other notions within it. One may only look to corporate lawsuits against negative journalism and whistleblowers as proof. The sooner we recognize this crucial fact, the sooner we will come to understand the plight of companies caught between Washington and Beijing.