As Cathay feels the heat of political risk in China, it’s time to remember lessons of the Mao era

Xi Jinping’s administration highlights how politics has always been in command in China, and companies must either adapt or rethink their China business

But nationalistic leaders and web users would do well to remember the losses suffered through extreme political correctness in the Mao era

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Cathay Pacific cabin crew walk past anti-government protesters at the Hong Kong International Airport on August 11. Vetting flight crew over their political beliefs echoes the choices that led to disaster in 1950s and 1960s China, and the lost decades under Mao Zedong. Photo: Nora Tam

Published: 6:15am, 21 Aug 2019Updated: 9:11am, 21 Aug 2019

China made Cathay Pacific an offer it couldn’t refuse: sack CEO Rupert Hogg or see the airline’s all-important China routes put at risk. So Hogg went. The dismissal of the Cathay chief heralds a new era of China risk. The days of China hiding its strength and biding its time are over. Business is increasingly exposed to China political risk.

With China’s threat to vet the political correctness of flight crew, China is turning back to the days of the Cultural Revolution, when to be “Red” (politically correct) was to be more important than to be “Expert” (scientifically and technically competent).

Next in Beijing’s line of sight are the accountants, as if financial statements benefit more from Red number-crunchers than Expert ones. Good luck with maintaining Hong Kong’s role as an international financial centre if that happens.

China wants the world to know that politics underpins its new line. Hogg’s departure on August 16 was announced first on a mainland Chinese website, before the airline could notify shareholders through the Hong Kong stock exchange, as is legally required.

That reshuffle at the top followed the dismissal of two Cathay pilots, fired for their role in Hong Kong’s anti-government movement. One pilot, who has been charged for his role in a protest, is presumably still innocent until proven guilty in Hong Kong.

Earlier, Cathay’s chairman John Slosar had defended its employees’ right to free speech (“We certainly wouldn’t dream of telling them what they have to think about something”), a well-meaning attempt at sticking up for individual liberties that quickly ran up against Beijing’s policies.

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