The recent feud between the National Basketball Association (NBA) and the People’s Republic of China (PRC) government has sparked fierce debate in the United States and beyond.
The episode was sparked by Houston Rockets General Manager Daryl Morey’s tweet backing Hong Kong’s ongoing pro-democracy protests. This led to swift reprisal from the Chinese Communist Party (CCP) in the form of Chinese sponsors cutting financial ties with the league, and its internet companies cancelling the streaming of Rockets games nationwide.
NBA Commissioner Adam Silver described the financial consequences as “dramatic” and said that the PRC asked for Morey to be fired – a claim that the Chinese denied.
U.S. Vice President Mike Pence also waded into the furor, accusing the NBA of “acting like a wholly-owned subsidiary of the [PRC’s] authoritarian regime.”
But a deeper analysis of the issue reveals that the Chinese-NBA skirmish of words – and threats of boycott – is a tempest in a teacup, and is merely a symptom of a wider, long-term trend of U.S.-China tensions going beyond the government-to-government level to involve the private sector.
Indeed, it is not only the U.S. government that must contend with a rising China; so must U.S. corporate actors like the NBA find a modus vivendi doing business with and in the Middle Kingdom. U.S. corporates will increasingly be asked to choose between the core American values of liberty, freedom of expression, and democracy – the bedrock of American soft power since World War II – and its business imperative of achieving a healthy profit bottom-line.
This choice will only get starker as the center of gravity of the global economy shifts east to Asia. Three factors explain why this moral dilemma of defending values against economic imperatives will continue, and the NBA will not be the last American business to face Beijing’s wrath.
It is clear that the U.S. government and its corporations continue to believe in, and pursue, the grandiose American values and ideals that “make America great,” including the freedom of expression and democratic ideals that landed Morey in hot soup.
However, the U.S. ability to realize these values, from a pragmatic standpoint, is dwindling as the geopolitical power gap between Washington and Beijing narrows.
In other words, the declining power gap has reduced the U.S. ability to implement the values it holds dear. In the NBA case, this has infringed on a U.S. citizen’s ability to make public statements on these issues without facing punishment from the Chinese state.
As China continues to strengthen its economic prowess, Beijing is unlikely to sit idly by in the face of what it deems as an insult to its sovereignty and national strength. Morey’s example is an unequivocal warning – commenting on Chinese internal affairs, without due sensitivity to Beijing’s feelings and that of its 1.4 billion people, will lead to unsavory consequences.
The combination of Beijing’s rising economic muscle and willingness to wield it, coupled with Washington’s declining leverage but insistence on abiding by its core values, inevitably sets up the ingredients for conflict. Unfortunately, the United States may no longer have the moral authority nor hard economic power to stem the onslaught on its core American values.
Another reason why the conflict over American values against business profit will go beyond the NBA debacle is the extent of state control that the CCP has over its people and business sector.
It appears that the U.S. private sector has underestimated this control. In situations where it assesses that U.S. “arrogance” cannot be tolerated, the ruling CCP has no qualms using its extensive leverage over its businesses and people to wreak retribution on any U.S. entity that the state deems to undermine its national interests.
This comes in the form of boycotts by Chinese companies – for example, the halting of live streaming of NBA games, withdrawing lucrative sponsorships, and cancelling visits by NBA teams to China, among others. It also includes stirring nationalistic sentiment among its people to impose public pressure on the offending U.S. entity. The intent is to force the entity to balance the trade-offs between suffering significant profit losses and compromising on the sanctity of core American values.
In this regard, the NBA is certainly not the first victim, and Hong Kong is not the only trigger that can anger Beijing. References by American companies on merchandise that omitted PRC-claimed territories like Tibet, Taiwan, and the South China Sea on maps had, in the past, led to apologies for erroneously misrepresenting the sovereignty and territorial integrity of China. We can expect such disputes to continue and strain U.S.-China bilateral relations.
Third, the corresponding incoherence between the U.S. government and private sector – as opposed to Beijing’s strong hold over its business sector – has accentuated America’s inability to collectively deal with Chinese threats of economic retribution.
For instance, if the U.S. government put its money where its mouth was and supported U.S. corporations that were ostensibly espousing its national values, Beijing may have hesitated at taking such a strong response.
It is noteworthy that Washington, through Pence, accused the NBA of “kowtowing” to Beijing and “muzzling” criticism of China, even while the NBA remained steadfast in its response of not taking any action against Morey. Had the administration put its full weight behind the NBA, it would have shored up U.S. credibility and signaled government-business solidarity against Chinese retaliation.
The United States’ inability to present a “united front” in effectively managing the Chinese threat of economic vengeance effectively bolsters Beijing’s belief that it can continue to use this lever to its benefit. This government-private sector disconnect is likely to perpetuate the moral dilemma between values and economic profit vis-à-vis China.
The reality is that the battle between defending American values while safeguarding the interests of American businesses, in the context of rising Chinese power, is necessarily a zero-sum game.
In the prevailing geopolitical landscape, Chinese pressure that leverages its tools of state power to protect its national interests and sovereignty against perceived foreign threats must be taken as a given.
While it appears Beijing may be concerned about its global image and soft power when it undertakes such retaliatory measures and could scale down such responses in future, these remain a powerful tool that can be used at Beijing’s discretion. The United States can either accept this as the new norm moving forward, or make changes to its psyche to deal with the threat against its core values and business bottom-line.
It is only when the U.S. government can come to terms with cooperating with its private sector that it can effectively defend itself against this form of Chinese pressure. It remains to be seen if this will be a bridge too far.
Jansen Tham is a Masters in Public Policy graduate of the Lee Kuan Yew School of Public Policy, National University of Singapore, specializing in Politics and International Affairs.