China is waging war with U.S. businesses, and winning



If you want to understand what’s happening in the National Basketball Association, turn off SportsCenter and pick up “The Art of War.” More than 2,000 years ago, the Chinese general Sun Tzu wrote that “the skillful strategist defeats the enemy without doing battle, captures the city without laying siege, overthrows the enemy state without protracted war.” That’s how the NBA lost its recent battle with China, and it’s how China has been beating Americans the past few years.

On Oct. 4, Daryl Morey, general manager of the Houston Rockets, tweeted support for Hong Kong’s pro-democracy protests. Of course, almost no one in China saw this tweet given that the country’s ban on Twitter keeps Chinese citizens in dark. Nevertheless, this small, symbolic gesture of solidarity with human-rights-seekers landed the NBA in the middle of the war between Chinese techno-authoritarianism and U.S. democracy.

The Chinese Communist Party mobilized immediately. The Chinese Basketball Association severed ties with the Houston Rockets, Chinese corporations canceled lucrative deals, and CCTV (Beijing’s state-run media company) and Tencent (the tech giant that’s in bed with Beijing) declared that they’d be blacklisting Rockets games. Millions of viewers and billions of dollars were on the line.

The NBA quickly surrendered. The league pushed Morey to apologize, and NBA Commissioner Adam Silver followed suit. Even worse, Joe Tsai, the owner of the Brooklyn Nets and co-founder of the quasi-state enterprise Alibaba, parroted Beijing’s Orwellian spin that Hong Kong protesters are less pro-democracy than they are a “separatist movement.”

The NBA has prided itself on free expression. Its players and owners have a well-earned reputation for speaking out on social justice in the United States. Sadly, it seems that woke capitalism stops at the water’s edge. And this goes way beyond basketball; it is part of Beijing’s strategy of corporate encirclement straight out of Sun Tzu.

The Chinese Communist Party and the American people are locked in conflict. We have been for years. Recently, we have fought with cyberweapons and cyberespionage, but the biggest share of this war has been waged with businesses. That’s part of the problem.

With a population of 1.4 billion, China is a lucrative market. But getting into that market isn’t cheap. At best, the price of doing business in China is silence; at worst, it’s reading talking points straight from the Chinese Communist Party. Beijing is not subtle about it.

China is making an example out of the NBA. The Global Times, the government’s propaganda newspaper, warned Western businesses that “global brands better stay away from politics.” In its typical threatening tone, the Communist Party laid it all bare: “The biggest lesson which can be drawn from the matter is that entities that value commercial interests must make their members speak cautiously.”

The message is inescapably clear: If you’re a U.S. company, the only acceptable position is the Chinese Communist Party’s position.

The kid in Hong Kong they shot at point-blank range? Don’t mention it. The Muslims they torture in re-education camps? Don’t object. The threat to Taiwan? Tread carefully.

Let’s be clear: The NBA’s surrender is nothing new. American businesses have been silent for years as C-suite executives chased Chinese markets for higher profits. But, like Sun Tzu’s enemies, we’ve found ourselves encircled, playing by China’s rules and struggling to keep up.

Communists aren’t seizing businesses; they’re co-opting them. Just last week, Apple took off its App Store after Beijing complained that Hong Kong protesters were using it to organize. ESPN not only warned its employees to avoid talking about the Hong Kong protests but also described the pro-democracy protests as “anti-government.” Even worse, the network used a propaganda map of China that includes the South China Sea as Chinese territory, despite the fact that U.S. sailors are patrolling there to prevent that annexation. Clothing manufacturers, hotels and airlines have been forced to adopt the Chinese Communist Party’s official talking points about its supposed ownership of Tibet and Taiwan.

We’ve lost the opening battles, but we’re not fated to lose the war.

U.S. businesses must step up to the plate and aggressively confront China’s intimidation campaign. And if they don’t have the courage and integrity to fight back, American consumers should demand that our companies put basic human rights above profit margins. The U.S. government has a role to play, too; Washington needs to stem the rising tide of Chinese intellectual property theft and cyberattacks so that we can empower American businesses to take a tougher stand. If free and open societies don’t wake up to this geopolitical reality, we’re going to be encircled before there’s time to fight back.

Sun Tzu’s ancient maxims don’t command our destiny. We’re not going down without a fight. We ought to have the courage of our convictions and confidence in our own ingenuity.

After all, that’s what America is all about. Either that, or learn Mandarin.