The Economic Contradiction and Hong Kong
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The state of Hong Kong’s “one country, two systems” is in turmoil. The system was established following the 1997 British handover of the former colonial territory. Under the current constitution, The Basic Law, Hong Kong is guaranteed capitalism and its accompanying freedoms for the next 50 years, which has been a major point of contention over the past two decades. The protests against the moral and national education plan and the Umbrella Movement, were both recent responses to what some citizens considered oversteps by Beijing on the sovereignty promised to Hong Kong.
The 2019 demonstrations were sparked by the introduction of an extradition bill, which would enable the Hong Kong government to extradite criminals to countries and territories that it does not currently have a requisite agreement with, including China and Taiwan.
The mass discontent with this particular bill stems from an agreement that mandates non-interference from Beijing until 2047. Ever since the British handed control of the island over to the Chinese, Hong Kong and its citizens have feared being prematurely deprived of their guaranteed freedoms prior to the 50-year deadline. This fear has manifested into a demand for withdrawal, as the citizens believe that the extradition bill would enable Beijing to export political dissidents to the mainland more easily and without a fair trial, further consolidating their control over Hong Kong.
The demand for the withdrawal quickly grew into five distinct demands: the full withdrawal of the extradition bill, a commission of inquiry into alleged policy violence, a retraction of classifying protesters as rioters, a pardon for detained protestors and universal suffrage for the Hong Kong Legislative Council and Chief Executive Office. So far, only the first demand has been met. As of now, the movement against the bill has spiraled out of control into mass protests and riots, with especially high tensions between Hong Kong citizens and the police.
These events have divided the world into two: those in favor of the demonstrators and those against that side with China. While many governments have remained neutral on the issue, communities across the world have mobilized in protest of China’s actions. In contrast, American companies have largely loaned their support to the Chinese government. The National Basketball Association (NBA), Nike, Blizzard-Activision and Apple, for example, have shifted their stances toward China. The NBA and Nike in particular were embroiled in a controversy with China following a tweet by Houston Rockets general manager Daryl Morey displaying his support for the anti-government protests in Hong Kong. The two companies were forced to apologize after the tweet resulted in the removal of all Rockets merchandise across China.
Similarly, the gaming company Blizzard-Activision found themselves at the receiving end of political backlash. The controversy arose when Hearthstone esports gamer “blitzchung” was stripped of his earnings and banned by the company for six months after he announced his support for the liberation of Hong Kong in an interview. Facing backlash from Western gamers, this decision was later partially revoked, with blitzchung receiving his original prize earnings in addition to a reduced sentence. Tech conglomerate Apple also faced fallout when it banned the app, “HK Map Live”, from the App Store, citing concerns from Hong Kong authorities of its ability to track police officers.
While public sentiment in America toward these actions is largely negative, it is hardly unexpected, as corporate capitulation to a powerful economy such as China is the norm in a capitalist society. NBA’s China division, for example, is valued at five billion dollars. Nike’s success, meanwhile, is tied largely to the NBA, as the company remains the official maker of the league’s uniforms.
Furthermore, Apple’s primary manufacturing hub remains in China, while Blizzard still has a growing gaming division in the country, all of which makes the decision of these corporate entities to support China and preserve their market shares understandable. It is quite natural for corporations to focus on their margins as, unlike governments, they are not accountable to the public.
This trend of placing profit over moral obligations or consumer concerns is observed in domestic policy as well. This past October, a group of auto companies backed the Trump administration in rolling back fuel emission standards in California. Facebook and Google consistently violate consumer privacy in their monetization schemes, and it was recently revealed that Boeing passed over safety features on its 737 Max plane model to cut down costs. Though morally questionable, company prioritization of revenue at the expense of all else is nothing new.
Businesses are beholden to profits and thus should not be expected to consider ethics in the face of higher margins. This sentiment holds far more weight with respect to actions of American companies towards China, where the risk of being locked out of the market is ever present. Companies have much to lose and little to gain from acting in good conscience. The reality is that without a legal obligation or an expectation of decreased profits, companies will always forego accepted moral principles. Free markets have demonstrated their ability to increase efficiency and innovate technologically. The sacrifice of ethics may be a necessary evil to preserve this.