For Olympic Sponsors, ‘China is an exception’

At the end of the slope where skiers will compete in the 2022 Beijing Olympics, an electronic sign runs past advertising for companies like Samsung and Audi. Coca-Cola cans are decorated with Olympic rings. Procter & Gamble opened a salon in the Olympic Village. Visa is the official event credit card.

President Biden and several other Western leaders may have stated “diplomatic boycottOf the Winter Olympics, which start next week, but some of the world’s most famous brands will still be there.

The prominence of these multinationals, many of them American, has caused political pain from efforts by Mr Biden and other leaders to punish China for its human rights abuses. authority, including a campaign of repression in the western region of Xinjiang. The Ministry of Foreign Affairs has declare a crime of genocide.

The funding of the Olympics reflects the obvious choice facing multinationals working in the country: Increase access to an increasingly sensitive China, or deal with the risk of a reputational loss. related to doing business there. When it came to the Beijing Olympics, the decision was clear.

While sponsors had to face Demonstration by human rights activists in several countries, they have pushed them aside, choosing instead to keep China, and its emerging nationalist consumer class, happy. .

The companies argue that the Olympics are not political, and that they have spent hundreds of millions of dollars on deals that span many Olympics, not just Beijing’s. Collectively, the top 13 Olympic sponsors have contracts with the International Olympic Committee amounting to more than $1 billion.

Mandie McKeown, CEO of International Tibetan Network, a group that helped organize protests by more than 200 human rights groups calling for a boycott of the Olympics. “Literally, it’s like they’ve dug their heads into the sand.”

However, for companies, the risk make Chinese consumers angry by criticizing China’s policies is high. The army of patriotic voices on Chinese social media has fiercely denounced foreign brands for acts of disdain, vitriol often amplified by the government and official state media.

Adidas, Nike and other fashion companies have faced nationwide boycotts in China after they express concern about reports of forced labor in Xinjiang, an area where the Communist Party has forced millions of Uighur Muslims into re-education camps and mass detention. When fashion retailer H&M pledged to stop buying cotton from Xinjiang, one boycott by Chinese consumers cost about $74 million in lost revenue more than a quarter.

Even one of the top Olympic sponsors, Intel, faced a backlash last month after the company posted a letter urging international suppliers to avoid sourcing products from Xinjiang. Face the wrath, Intel rewrote the letter within a few days to remove the reference to Xinjiang.

“The space to please both sides has disappeared,” said Jude Blanchette, a scholar at the Center for Strategic and International Studies in Washington. “When it comes to picking who to disturb, it’s been a bad week or two for the press in the US compared to the very real and legitimate fear that you’re going to lose market access in China.”

Top sponsors ignored the questions, awkward sometimes, on whether their support effectively vindicates authoritarian rule by the Communist Party. Olympics, executives argue, should not be politicized, pointing to Olympic Charter, which says a lot, despite a long history of political intrigue surrounding the Olympics.

Only four main sponsors – Omega, Intel, Airbnb and Procter & Gamble – responded to requests for comment. Omega, the official manufacturer of timekeepers and data processors for the Olympic Games, said that since the beginning of its partnership with the Olympic Games in 1932, “it has been our policy not to participate in some political issues because it will not promote a sports career. where our commitment lies. ”

Airbnb and Procter & Gamble say they focus on individual athletes and emphasize their commitment to each Olympics rather than Beijing in particular. An Intel representative said the company will “continue to ensure that our global sourcing complies with applicable laws and regulations in the United States and in other jurisdictions where we operate. ”

“Skiing and sports are not related,” said Justin Downes, president of Axis Leisure Management, a hospitality company and contractor working with the Canadian Olympic Committee and others to help with logistics and supplies. politically related.

Virtually all Olympic sponsors have a code of ethics or a corporate social responsibility commitment that celebrates human rights, but these Games have tested how far they will go to speak up. against widely recognized violations.

In China, such violations include repression in Xinjiang, as well as continued repression of Tibet, erosion of political freedoms in Hong Kong, and threats to assert China’s territorial claims. National for Taiwan.

Mr Downes has contracted with Olympic venues to ensure that the people he hires do not bring up politically sensitive topics. He said that if any member of his staff, including medical responders, made political statements about subjects like Xinjiang, Mr. Downes could be held accountable.

“We are required not to disclose certain topics or post images on social media,” Mr Downes said of the contracts. “They don’t want people to come out and make statements. That is common sense. ”

China’s critics argue that sponsors have linked themselves to an event that could tarnish their brand. Some have compared the Games to the 1936 Summer Olympics in Berlin, which the Nazis used to introduce Hitler’s fascist regime.

Tenzyn Zöchbauer, an ethnic Tibetan who participated in protests in Germany against Allianz, the insurance and financial services giant and top sponsor of the Olympics “We are always iterative. these words, “Never again”. “At least genocide should be a red line,” she added, referring to China’s crackdown in Xinjiang.

For many international companies, however, the Winter Olympics are an opportunity to capture the attention of more than a billion consumers around the world, as well as inside China’s huge consumer market.

In addition to the top sponsors, many international companies have promoted their products in Olympic themed campaigns. At a shopping mall in Beijing, Adidas erected a ski slope with ski dummies. At a Pizza Hut, the Olympics’ official panda mascot waves from a window screen.

Snowboarding Bing Dwen Dwen, as pandas are known in China, are also strewn across KFC boxes.

The prominence of such advertising campaigns risks attracting unwanted attention in the United States.

Executives from Coca-Cola, Airbnb, Intel, Procter & Gamble and Visa have towed before Congress in July and were accused of putting profit before ethics with their Olympics sponsorships. They were all attacked in public letters. Lawmakers in the United States and in Europe have called for them to join.

Even so, human rights abuses in China have not generated enough protests to threaten the profits of multinational companies, while angry Chinese consumers have prompted painful boycotts. pain.

“Honestly – no one, nobody cares what’s going on with the Uyghurs, OK?” Chamath Palihapitiya, billionaire investor and part owner of the National Basketball Association’s Golden State Warriors, speak this month. Mr. Palihapitiya was criticized for the remark, and the Warriors afterwards play down his involvement with the group.

Of the top Olympic sponsors, only Allianz is known to have met with activists calling for a boycott of the Games. However, the company has not yet commented. A protest last week at the door of its office in Berlin drew only seven people.

Many major sponsors hope they make it through the Olympics without drawing too much attention.

Activists say sponsors and the International Olympic Committee have economic leverage to influence the Chinese government but are too timid to use it.

“If any other government in the world did what the Chinese are doing in Xinjiang or even in Hong Kong, a lot of companies would just take equity,” said Michael Posner, a former State Department official. Giao is currently working at New York’s Stern University. Merchant’s School.

He cited divestment decisions by companies in places like Myanmar and Ethiopia, as well as campaigns to boycott South Africa when its apartheid government sent all-white teams to the Olympics.

“China is an exception,” he said. “It’s so big, both a market and a production engine, that companies feel they can’t afford to be targeted by the government, so they just keep quiet.”

Claire Fu research contributions. Keith Bradsher contribution report.

https://www.nytimes.com/2022/01/28/business/olympic-sponsors-china-beijing.html For Olympic Sponsors, ‘China is an exception’

Fry Electronics Team

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