Why Foreign Firms Are Walking on Eggshells in China

Why Foreign Firms Are Walking on Eggshells in China

The world’s largest consumer market is also increasingly a political minefield for global firms. Chinese consumers, besieged by news of geopolitical tensions, a slowing economy and the trade war with the U.S., are becoming more sensitive to any perceived slight to their country or culture. And they’re quick to retaliate. The growing nationalism is also making them lean toward home-grown brands, jeopardizing the plans of multinational firms that have big bets on the Asian nation.

1. What are the triggers?

Many of them relate to China’s sovereignty:

  • Hong Kong: It’s has been part of China since the British handed it back in 1997, but is governed as a semi-autonomous region. This year’s pro-democracy protests are viewed by many in mainland China as a separatist movement. Any company or employee seen as supporting them face a scathing backlash, as the National Basketball Association found out in October.
  • Taiwan: China considers the island a renegade province, even though its been governed separately since 1949, and any talk of independence as deeply hostile. Calling it a country, like some fashion brands did, can cause problems.
  • Tibet: In 1959 the People’s Liberation Army quashed a revolt against Chinese rule in the region and the Dalai Lama, the Tibetan spiritual leader, fled into exile. It’s another sensitive area, even on a hotel website. And while the Dalai Lama is a celebrity in the West, China considers him a threat, not a subject for inspirational advertising.