China's Corporate Apologists

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Distinguished Fellow for Democracy Studies

The massive July 1 demonstration by democracy supporters in Hong Kong was one of the world’s more inspirational events at a time when inspiring events are a rarity. Among other things, the half million participants represented a powerful rebuke to those who argue that the China model of authoritarian capitalism is an appealing alternative to “Western” concepts of political freedom, civil rights, and free markets. The ordinary people of Hong Kong have no doubt about where they stand. Living in China’s shadow and under constant pressure to conform to Beijing’s conception of freedom, they have no desire to embrace a system in which tweeting the wrong message, blogging the wrong idea, or gathering with the wrong people can land you in jail for 11 years—the sentence meted out to Nobel Peace Prize winner Liu Xiaobo.

Personal freedom and democratic elections are not the only things Hong Kongers were marching for. A growing number of people in the territory’s business community have recognized that Hong Kong’s historically clean and independent legal system and its culture of free-market competition—the qualities that undergird its status as a center of international commerce and finance—are under threat from the corruption and collusion propagated by the mainland’s Communist Party elite.

Yet not everyone has cheered on the protest campaign. As Harold Meyerson noted in a recent column, the Hong Kong units of four major multinational accounting firms—Ernst & Young, KPMG, Deloitte, and PricewaterhouseCoopers—signed on to an advertisement that was bluntly hostile to the democracy movement. The ad was placed in three Hong Kong newspapers. It asserted, astonishingly, that the demonstrations were a threat to the rule of law. As reported by the Financial Times, the companies warned that the demonstrations posed a threat to the stock market, financial institutions, and banks, and could cause “inestimable losses to the economy.”

It is not groundbreaking news that big corporations will take the side of dictatorships and autocrats if they feel it’s in their self-interest. “We will hang the capitalists with the rope that they sell us,” Lenin boasted. During the Cold War, corporations like PepsiCo came together to lobby for more trade with the Soviets. More recently, after the Russian seizure of Crimea, a procession of German businessmen made a pilgrimage to Moscow to reassure Vladimir Putin of their opposition to sanctions. Meanwhile, U.S. and European energy companies have warned their own governments against any restrictions on trade with Russia.

But the accounting firms’ statement is something new. Here are corporations based in the democratic world whose rise as multinational giants owes much to the institutions of free societies: equality under the law, honest government, an independent judiciary. But in Hong Kong, these companies are carrying water for a regime that breeds corruption, places politics before justice, and expects judges to rule as the party dictates.

The accounting firms’ behavior speaks loudly about the importance that Communist Party officials attach to the Hong Kong democracy campaign. The authorities have been highly successful to date in crushing democratic stirrings in China proper, and it clearly bothers the leadership that it doesn’t yet exercise the same kind of control in Hong Kong. We can assume that accounting companies didn’t volunteer to participate in a Beijing-mobilized propaganda offensive, but were pressured into signing up. Still, one wonders how much prodding was needed, how much internal resistance arose, and whether pressure in the opposite direction might have altered the firms’ actions.

High finance is hardly the only field in which Beijing has been twisting the arms of foreigners. American scholar Elliot Sperling, who has been a vocal supporter of persecuted Uighur intellectual Ilham Tohti, was recently detained at a Beijing airport, denied entry to China despite holding a valid visa, and deposited back on the plane in which he had arrived. Tohti, a well-known economics professor and advocate of Uighur rights, was charged with separatism earlier this year. With his arbitrary visa cancellation, Sperling joins a growing list of China specialists who are barred from the country for having written on subjects regarded as ultra-sensitive by the authorities. For example, U.S. professors Andrew Nathan and Perry Link had their visas withdrawn years ago for their work on the democracy movement of 1989 and the Tiananmen Square massacre. Other academics may avoid such topics to stay in Beijing’s good graces.

Condemnable as they are, these tactics pale in comparison to those employed every day against ordinary Uighurs. Indeed, far from the shores of Hong Kong and the glare of international media, the plight of the Uighur population in the western region of Xinjiang reveals the true character of the Communist Party regime. In recent years, the authorities have made a difficult situation much worse by trying to smother Uighur culture; arresting artists, writers, and internet users; physically destroying ancient urban centers; crushing protests with deadly force and mass arrests; and imposing ever more restrictive rules on Uighurs’ religious practices. The constant pressure, coupled with heavy-handed economic development policies that favor Han Chinese newcomers, has helped to drive a discontented people with moderate religious beliefs into a state of semi-rebellion.

Since the existing iron-fist policies seem not to have worked, the leadership is preparing a new approach. In a euphemism-laced speech in May, President Xi Jinping spoke of a “special policy” that Beijing plans to implement for the southern part of Xingiang, where Uighurs predominate. He spoke of “special measures” to “deal with special things.”

What are these vague “special measures”? Most reports suggest that the Communist Party is making plans to carry out massive, coercive population transfers, in which Uighurs would be forcibly moved in order to assimilate with Han Chinese in Han-dominated parts of the country. This is the companion, if more brutal, to a long-term policy whereby Han migrants have been encouraged to relocate to Uighur areas of Xinjiang.

The Chinese authorities have made clear that they are prepared to carry out policies of repression and brutality, no matter what the democratic world says or thinks. But like the democracies, China is immersed in the global economic and diplomatic universe, and has its own vulnerabilities. In this regard, the United States in particular should ask itself how many of its eminent scholars should be banned—by a state that seems to place a high value on academic cooperation—before it responds. As for our multinational corporations, the press has a special responsibility to shine the spotlight on those that collaborate with the agents of dictatorship.

Photo credit: Pasu Au Yeung Flickr

Analyses and recommendations offered by the authors do not necessarily reflect those of Freedom House.

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