Features » October 24, 2005
See No Evil
How American businesses collaborate with China’s repressive government
By G. Pascal Zachary
Chinese staff attend the opening ceremony for the newly-opened Wal-mart supercenter in Shanghai on July 28.
Everyone I meet is afraid. The chief executive of one of China’s largest hotel groups is afraid to complain to the police about the hustlers who sell fake watches outside the lobbies of his hotels. A Buddhist who runs a network of factories is afraid to speak openly about the Chinese occupation of Tibet. A sports marketing official, one of the agents for China’s basketball stars, is afraid to speak out against misguided policies of the national sports system.
What is unusual about these people is not that they are afraid; many people in China are. What is unusual about these people is that they are Americans doing business in China—some even doing business successfully. What they fear, of course, is the same thing that China’s people fear: the arbitrary power of government.
For Americans doing business in China, it is a short step between fear and collaboration, as I recently found during a two-week visit to Shanghai and Beijing, the two leading destinations in China for American “expats.”
My first meeting in Shanghai was not with Americans, but with Chinese nationals working for them. On a Sunday afternoon I sat in a shiny Starbucks near the city’s central park, tucked into the rear corner of the shop, drinking coffee with five young people (three men and two women) who each work for a large American company in China. They all agreed that working for an American company had benefits over employment with a Chinese company. There was more openness at work, more emphasis on performance and more room to take chances. But one thing was the same: If they were caught criticizing the government, or even breaking the petty rules that govern their social lives—such as the ban on meeting in formal associations that might touch on political and social issues—the American company would not intervene to help them.
A few days later, an American who used to work for Nike explains to me why he won’t stick his neck out for the Chinese or even his own principles: fear of retaliation. The American has his own sports marketing company, organizes amateur basketball tournaments throughout China and even advises China’s version of the NBA. He knows Yao Ming, star of the Houston Rockets, personally. When talk comes around to the poor performance of China’s international basketball team, the American offers an explanation: China’s government officials are ruining Yao Ming and other top players by making them play year-round for China’s national team, often sacrificing time for much-needed rest and skills building. The American knows of what he speaks, since he is the agent for the country’s leading point guard who, like Yao Ming, is a victim of the government’s sports policies.
I say that this is a shame, and the American agrees. But he isn’t about to campaign for better treatment of these stars. In his office we are surrounded by posters of leading Chinese athletes. He points to a poster of Wang Zhizhi, a tall Chinese man who backed up Shaquille O’Neal last year for the Miami Heat. Wang rebelled against the Chinese government by refusing to play for the national team at last year’s Olympics. He is now persona non grata, not only to the Chinese government, but the sports marketing establishment here. This American won’t touch him, nor will anyone else, out of fear of antagonizing the Chinese government and losing lucrative deals.
Free speech be damned
The sports marketer is guilty of keeping his mouth shut. But other Americans actively assist the Chinese government in the maintenance of its repressive regime. Even as I talk to the sports marketer, Microsoft is concocting an Orwellian policy for its new Chinese version of MSN, a news site and search engine. Microsoft has decided (and publicly confirmed this summer) that anyone in China doing a search containing the words “freedom” or “democracy” will be shown a message explaining that those words are banned and the requested search query will not be processed.
Now, Microsoft is one of the richest companies in the world and its founder Bill Gates has spent billions of dollars on a foundation to reduce global inequalities in health and education. And yet his own company is so intimidated by China’s government that terms basic to free expression are banned from its search engine.
American collaboration gets even uglier than that, however. In September Internet company Yahoo admitted that its employees in China assisted the government in making a case against a dissident journalist named Shi Tao, jailed since April, apparently for revealing information about a crackdown by the Communist Party.
In response to a question about the journalist’s fate at a Beijing Internet conference in September, Jerry Yang, an American co-founder of Yahoo, confirmed that his company had helped the Chinese government arrest and prosecute Shi Tao. Yang didn’t give specifics, but Reporters Without Borders, a Paris-based advocacy group, has said that Yahoo officials in China helped the government track Shi Tao down using the IP address from which he read his Yahoo e-mail account.
Yang said that Yahoo receives “a lot” of requests for information from the Chinese government. “I do not like the outcome of what happens with these things,” he said. “But we have to comply with the law. That’s what you need to do to stay in business.”
That kind of pragmatic attitude might pass muster in the United States or Europe, where courts are independent and the line between business and government is usually clear. But in China, the American who blithely assists the Chinese government is likely contributing to a heavy-handed injustice.
During my trip, American business people were fond of telling me that they could do more good being engaged with the Chinese than by openly complaining and taking the sort of adversarial position against government that is common in the United States. “The idea is to retain our credibility, our influence in China, so we can work behind the scenes for the right thing,” the sports marketer told me.
Naturally, there is some truth to this. In Shanghai, I visited the home of an American who adopted Tibetan Buddhism as his religion some years ago. He first came to China in order to help rebuild monasteries and temples in Tibet that were damaged or destroyed during the ’60s Cultural Revolution. His high-rise apartment in a fashionable part of Shanghai is festooned with Tibetan artifacts, and he is clearly pained by the hypocrisy of the Chinese government today, promoting Tibet as a tourist destination while at the same time repressing any authentic expressions by Tibet’s people or religious leaders. And yet he tells me, “The price of getting to restore Tibet’s cultural heritage is staying silent about China’s true aims.”
When I bluntly respond that he is a collaborator in China’s occupation, he nods his head sadly and says he is “resigned” to China’s domination of Tibet. Speaking out on Tibet would only draw the scrutiny of the Chinese government and, of course, doom his growing business of supplying low-priced manufactured goods to American chain stores.
Profits not worth the price
Another troubling part about the collaboration of American business with the Chinese government is that, even in narrow business terms, it is failing. The terms of trade between the United States and China are ever-worsening. Chinese goods are flooding into the country, and manufacturing jobs are still flowing out of the United States and into China. U.S. exporters are selling an impressive $3.5 billion worth of goods per month to China—twice the amount of goods exported from the United States to China five years ago, and nearly ten times the amount of 15 years ago. But Chinese exporters to the United States are doing even better: Sales topped $20 billion per month this summer, and show no signs of slowing down. The trade deficit in merchandise with China topped $100 billion in 2002, $124 billion in 2003 and $160 billion last year. This year, the deficit will approach a whopping $200 billion.
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