Edward Tse

The NBA and Apple cases show foreign businesses need to better understand China, and its boundaries

All countries have unique sensitivities, so the NBA and Apple should not be seen as victims who caved in to China. Many companies, including from the US and Japan, thrive once they adapt strategies tailored to Beijing’s point of view

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Edward Tse

Published: 2:00am, 21 Oct 2019Updated: 2:19am, 21 Oct 2019

The months-long protests in Hong Kong have not only attracted international attention, but have also begun to involve major foreign powerhouses like the NBA and Apple. The fallout caused by Houston Rockets general manager Daryl Morey’s tweet led Tencent and China’s predominant broadcaster CCTV to suspend the airing of NBA games, and Chinese companies such as Ctrip.com (China’s major travel booking platform) to terminate NBA sponsorship.

Meanwhile, Apple’s approval of an app which allows users to track protest activities received an immense backlash from the Chinese government and consumers. Apple has since removed it and released a statement that the app “violate[d] our guidelines and local laws”.

Some critics were quick to jump to the conclusion that China is victimising foreign companies and preventing freedom of expression. However, as in every country, China has certain boundaries of sensitivity.

Issues such as racial discrimination are highly sensitive in the US. In 2014, Donald Sterling (the former LA Clippers owner) was fined US$2.5 million and banned from the NBA for life because of his racist remarks. The NBA reacted to the unacceptability of these comments in US society, even with freedom of expression considered.

It is common sense that companies doing business in a foreign country need to observe and understand the host country’s boundaries of sensitivity and understand what is, and is not, acceptable. Not doing so is generally the result of ignorance, incompetence, arrogance or a combination of these things.

In 2012, many pundits were quick to say that Japanese companies had no chance of succeeding in China during a period of anti-Japanese sentiment (regarding a territorial dispute over the Diaoyu/Senkaku Islands). During this time, some Toyota and Honda dealerships in China were burnt down and their sales in China plunged.