Claude Barfield and William Rau
After more than 40 years of China’s “reform and opening up,” are US firms serving as checks on the Chinese government’s totalitarian aims — as Mao Zedong once feared — or are they becoming China’s ideological accomplices? Strategic “decoupling” from China has been a top goal of consecutive American presidents, yet US foreign investment in China is growing alongside assiduous efforts by American companies to appease the Chinese Communist Party (CCP).
As an example, look no further than two weeks ago, when The Walt Disney Company launched its Disney+ streaming service in Hong Kong — with a catch. A 2005 episode of “The Simpsons” in which the family visits China was missing, ostensibly because it at one point shows a fake sign that reads “Tiananmen Square: On this site, in 1989, nothing happened.” Consider also the saga of Disney’s “Mulan” live-action remake. After shooting the film in China’s Xinjiang province, the site of an ongoing ethnic genocide against Uyghur Muslims, Disney, in the film’s credits, thanked a number of sanctioned paramilitary and propaganda groups that have both perpetrated and covered up the Xinjiang genocide.
The architecture of China’s “great firewall” remains secretive and mysterious, making it difficult to know when platforms preemptively censor content, respond to censorship requests, or have content forcibly removed by state actors or algorithms. It is thus unclear whether Disney+ preemptively cleansed itself of sensitive material or whether CCP authorities did it for them. Still, Disney is clearly at ease with any of these outcomes, given it has said nothing about the “Simpsons” episode and, in the past, has actively courted partnerships with censorious and repressive Chinese government organizations.
Disney+ remains banned in the Chinese mainland, but its Hong Kong launch could preview eventual nationwide popularity, and is only the latest of Disney’s lucrative China exploits. Disney is continuing to produce movies in China, even when it requires navigating sensitive political issues. ESPN, a subsidiary of Disney, has a long-standing broadcast deal with the China-friendly National Basketball Association and Chinese media firm Tencent, which it has weathered great turmoil to maintain. Disney’s highly popular Shanghai theme resort, which is co-operated by a state-owned Chinese partner firm, has helped the company market its media products to Chinese audiences.
Why would Disney, a company that purports to care about police brutality, thank in its film credits Chinese police organizations that brutalize unarmed minorities? Why would it censor references to one of history’s clearest examples of police brutality on its streaming platform? The (obvious) answer is that Disney’s expanding China portfolio is too profitable to abandon.
The entertainment industry is not the only sector piling into Chinese markets despite worsening geopolitical relations between the US and China. Though aware of the economic and security downsides, Wall Street firms are rapidly ramping up financial offerings for Chinese investors amidst the CCP’s growing scrutiny of corporate activity — particularly foreign investment and overseas stock market listings. The list of companies supplying Chinese clients with investment banking, securities, brokerage accounts, and underwriting equity deals represents a “who’s who” of US financial firms including Bank of America, Blackrock, Goldman Sachs, JPMorgan Chase, and others. All the while, these firms are treading carefully to not offend the CCP.
Given the vast number of investments in Chinese companies, there is a danger that Wall Street firms could find themselves in the same moral dilemma as Disney: How do you keep track of — let alone defend — investments tied to forced labor and other human rights violations? And how far must American companies bend to the CCP’s aims in order to protect their investments?
All of this is happening on top of escalating US-China geopolitical tensions, Joe Biden’s pledge to “get tough” on China, and the continuing arbitrary rule of Chinese President Xi Jinping. But it appears many American businesses are ready to accept the risk.