Opinion | China’s market power challenges American economic freedom
October 17, 2019
Few foreign countries have made as much news in the United States as China, much of it coming from constant threats of escalating the ongoing trade war or the retaliation against the pro-democracy protests occurring in Hong Kong.
Most recently, China has been making news for its economic market power, not because its economy is rapidly expanding or surpassing the United States as China’s economy has been slowing down, but because of the significant effect it has over the U.S. and the American companies that seek to do business with it.
American companies have become complicit in China’s censorship — used to smash democratic values and carry out atrocities — to maximize their profits by gaining total access to China’s market.
One of the more significant incidents happened in the NBA. The Houston Rockets general manager, Daryl Morey, tweeted an image reading, “Fight for Freedom, Stand with Hong Kong,” which was deleted shortly after. Rockets owner Tilman Fertitta essentially disowned Morey’s viewpoint on behalf of the Rockets organization and pondered Morey’s future with the organization.
Chinese businesses and the state have since responded by cutting ties with the Rockets, suspending contracts, canceling events and blacking out preseason games. ESPN, which is owned by The Walt Disney Company, even sent out an internal memo prohibiting employees from commenting on the Rockets-China situation.
Chinese censorship reaches the digital world as well. Apple Inc. removed an app from the app store that aided Hong Kong protestors by tracking police and removed the Taiwanese flag emoji from all Hong Kong iPhones.
Blizzard, a video game company, initially suspended one of its Hearthstone (a digital card game) players for a year and rescinded all of his prize money for speaking out in support of Hong Kong on a webcast. His winnings have since been restored and his suspension reduced after fan backlash. A more expansive list of all the known censors on major American companies can be found here.
It should be expected large corporations and organizations prioritize their bottom lines over any sense of morality or humanity. That’s not a criticism. Instead, it’s a contemporary understanding of the role of business in society backed by economists like Nobel Prize winner Milton Friedman, who thought the only role businesses should have in society is generating profit.
What then makes American companies’ complacency with censorship particularly challenging is its conflict with values that Americans were fed for generations and the idea that a free-market international order does not need to coincide with democracy to be efficient.
As companies continue to abide by Chinese censorship, it undermines the “traditionally American” idea that free enterprise liberates people and in the marketplace of ideas, freedom and democracy win out over authoritarianism.
What has been occurring in China thus far has resulted in the opposite — that an international free market can exist, but that market does not necessarily push upward toward a democratic ideal. If the larger per-person market size is requiring the companies to take steps in the opposite direction, the business world won’t hesitate to assist in further downward pressure from the state onto the populace.
Have American corporations stopped believing democratic values will win in the marketplace of ideas? Or, was that entire philosophy based on an extreme bias of being the only economic superpower for an extensive period and is now being exposed in the face of new challenges?
How the United States should respond to this is not clear. Congress has almost universally condemned Chinese censorship on both its people and American companies, but political action remains elusive. Closing off all trade with China until it allows for true freedom of expression in the market would be damaging to people in the United States and especially those in China, as hundreds of millions of people have been able to rise out of poverty as a result of China opening itself up to the world.
Perhaps, in the long run, this will backfire on the Chinese state. Countries that increasingly crack down on their people can become fragile over time. The Chinese government getting into fights with and blacking out some of the most significant American entertainment organizations like the NBA may lead to more Chinese people rejecting the government’s oppressive ways of maintaining order.
In the future, the Chinese could reach a point where they want the experience of a democratic society in their streets, not just on their screens.
Austin is a senior in LAS.