Doing business in China comes with major strings attached. This week it became evident that a few provocative words can cause those strings to tighten.
A single tweet by Houston Rockets General Manager Daryl Morey in support of pro-democracy protesters in Hong Kong unleashed massive retaliation from China that put the team and the entire NBA on notice. China's state TV cut off preseason games and ominously announced it would "immediately investigate all co-operation and exchanges involving the NBA." Tencent, a major Chinese social media company with a reported $1.5 billion streaming deal with the NBA, said it will no longer stream Rockets games, even though the team is immensely popular in China.
China's message to foreign companies and their employees is clear: Watch what you say on matters sensitive to our country if you want to do business here. This hardball response to Morey and the NBA fits a pattern of threats and reprisals against foreign organizations wading (even unintentionally) into the country's sensitive internal politics.
Facing boycott threats this summer, Western fashion brands apologized for T-shirts that suggested that Taiwan and Hong Kong were independent countries rather than territories that are part of China. It isn't just top executives who have paid a price for speech that offends China's sensibilities. Last year, a Marriott employee earning $14 an hour used a company account to like a post on Twitter from a Tibetan separatist group. A Chinese tourism organization demanded an apology and urged Marriott to "seriously deal with the people responsible." The employee was fired. When China threatens a foreign business, compliance typically prevails over resistance.
China's efforts to impose speech controls on international companies and their workers have largely succeeded. Morey deleted his tweet. The NBA put out a statement saying the tweet doesn't represent NBA or the Rockets, which led to an uproar in the U.S. and another statement from the NBA.
The league's initial response provoked a torrent of criticism in the United States; in a rare show of unity, leading Democrats and Republicans rebuked the NBA for caving to China and failing to stand up for Morey's free speech rights.
American companies have grudgingly accepted all kinds of Chinese rules for years. They may bristle about how they are forced to transfer technology in exchange for access to China's market and about Chinese cyber spies who threaten their intellectual property. But the potential rewards — all those consumers, a middle class that's expected to reach 550 million by 2022 — are just too great to spurn. And that means playing by China's rules.
One notable recent exception: South Park, the sardonic, boundary busting Comedy Central cartoon. Last week's episode, "Band in China," appeared to offend authorities so much that all traces of the show — episodes, clips, discussion groups and social media posts — vanished from major platforms in China.
South Park's creators, Trey Parker and Matt Stone, seized on the moment to issue a fake apology mocking China's President Xi Jinping and the NBA:
OFFICIAL APOLOGY TO CHINA FROM TREY PARKER AND MATT STONE.
"Like the NBA, we welcome the Chinese censors into our homes and into our hearts. We too love money more than freedom and democracy. Xi doesn't look just like Winnie the Pooh at all. Tune into our 300th episode Wednesday at 10! Long live the Great Communist Party of China! May this autumn's sorghum harvest be bountiful! We good now China?"
In fairness to the NBA, South Park thrives on political agitation. The basketball league has painstakingly built a thriving connection with hundreds of millions of Chinese fans.
The NBA has notably supported players and coaches who express their political views on subjects ranging from police violence to guns and President Trump. But Daryl Morey's seven-word tweet "Fight For Freedom Stand With Hong Kong" puts the league's progressive image to its sternest test. On Tuesday, the well-regarded NBA Commissioner Adam Silver sought to clarify the league's position, saying it would "protect its employees' freedom of speech," while at the same time apologizing to the league's fans in China.
The apology failed to defuse the league's crisis. China's state-run television network said it was "strongly dissatisfied" with Silver's remarks. And it bluntly declared that any speech challenging China's "social stability" doesn't fall within the realm of freedom of speech.
The Chinese message is loud and clear: Your free speech ends at the water's edge.