From the NBA to ‘South Park,’ China refuses to play ball with its critics

The Oct. 12 game between the Los Angeles Lakers and the Brooklyn Nets in the Chinese city of Shenzhen might have seemed like business as usual, with thousands of basketball fans out in force for the rare opportunity to see their beloved NBA teams compete live.

But below the surface, tensions were high at the second of what have likely been the two most geopolitically controversial preseason exhibition games in NBA history. After a single tweet by Houston Rockets general manager Daryl Morey in support of pro-democracy protests in Hong Kong, Chinese state broadcaster CCTV refused to air the two games, and nearly all of NBA China’s local sponsors have fled.

The angry backlash in the Middle Kingdom has illustrated anew the difficult challenge Western companies face as they do business in a country whose massive market they crave but whose government espouses values they don’t. In the past week, U.S. firms from Google to Nike to gaming company Activision Blizzard have been caught up in controversy over their dealings with China. So, too, has Hollywood, with “South Park” putting out an episode deeply critical of the Beijing regime and the U.S. — and getting scrubbed from the internet in China as a result.

Due to its new status as a global economic and political powerhouse, China is likely to grow even more assertive in its response to anything it deems counter to its interests, some analysts say.

“I fear that this is the new normal,” says James McGregor, Greater China chairman of public relations firm APCO Worldwide. “Instead of sitting back and accepting criticism, China is now on the offensive to influence, and in some cases control, the global discussion about China and its way of doing things.”

The situation is particularly delicate at the moment because of the ongoing civic protests in Hong Kong, which began in June and have since morphed into a broader pro-democracy, anti-Beijing movement. The mainland’s ruling Communist Party has portrayed the protests as a counterrevolutionary separatist movement spurred on by “foreign forces” including the U.S., with which China is engaged in a grinding trade war.

The country has also just come off its huge 70th anniversary celebrations of the establishment of the People’s Republic, a highly politically sensitive occasion accompanied by heightened censorship.

“At such a moment, an influential foreigner or a noteworthy company making statements that touch on Chinese sovereignty is like taking a match to the powder keg,” says Florian Schneider, a professor at Leiden University who studies China’s digital nationalism and politics in Chinese entertainment.

Hollywood has traditionally tried to keep China on board by steering clear of hot-button topics such as the Communist Party and Tibet, inserting positive images of China into movies such as “The Martian” and “Gravity,” and refraining from making villains Chinese.

“The studios are very aware of what the red lines are and what the points of potential contention are,” says Aynne Kokas, author of “Hollywood Made in China.” “For people who have been paying attention, this is not something that happened suddenly. It’s the next step in a long, iterative process.”

One fear is that the NBA and “South Park” imbroglios will encourage Western companies to practice even more self-censorship regarding China.

“What Hollywood and other corpora­­tions want is for these issues not to come up in the first place,” says Isaac Stone Fish, a senior fellow at the nonpartisan
Asia Society. “It’s unfortunate that the business climate for a lot of American corporations right now is such that they’re going to work to make sure that these issues in China are not talked about publicly in the hopes that they won’t get attacked and they won’t be in a position of having to defend Beijing’s response.”

But as the situation in Hong Kong grows more intractable and divisive, that studious avoidance may become harder.

The NBA found itself in a lose-lose situation, unable to publicly reprimand Morey without causing a firestorm back in the U.S., but faced with China’s wrath over the perceived slight to its sovereignty. Likewise for Hollywood, moves seen as accommodating the Chinese government’s effort to control information and stifle dissent can be politically tricky in the U.S., especially among outspoken entertainment industry figures such as George Clooney.

As the studio with the largest operations by far in China, including theme parks in Shanghai and Hong Kong, Disney is particularly vulnerable to getting caught up in the fray. Disney-owned ESPN has come under fire for reports that the sports powerhouse told its on-air personalities not to discuss the China situation. A source close to ESPN countered that the network instructed hosts to avoid “purely political” conversations about the NBA flap. In fact, ESPN carried multiple news reports of the NBA backlash in China last week.

Disney was also in the crosshairs when Crystal Liu Yifei, the star of its $300 million live-action remake of “Mulan,” tweeted in support of the Hong Kong police’s crackdown on protesters in August. Liu is a mainland social media star, with 66 million followers on Weibo. Outraged Hong Kongers quickly called for a boycott of “Mulan,” which is due to be released next year.

Disney has carefully kept quiet about the affair, declining Variety’s requests for comment. Liu also skipped the press line and panel at Disney’s D23 expo in August in the wake of the controversy.

“The companies most at risk are those with conflicting constituencies and high-profile people with access to local platforms,” says Marc Ganis, a leading U.S. sports consultant and a China media investor.

But he cautions against exaggerating how China might respond to perceived offenses. “I can’t imagine that action would be taken against an entire studio in response to the words of an anonymous mid-rank executive,” he says. “Viacom as a whole did not get x-ed out because of ‘South Park.’ Paramount movies have received release dates since then.”

One tactic Western companies have used is to put out different messages to different audiences. U.S. games firm Activision Blizzard drew widespread anger from gamers outside China and from U.S. politicians when it stripped a professional player known as Blitzchung of his winnings and banned him from competition after
he mouthed support for Hong Kong protesters in a post-match interview. U.S. Sen. Marco Rubio, R-Fla., tweeted: “Recognize what’s happening here. … China [is] using access to market as leverage to crush free speech globally.”

Blizzard has since restored Blitzchung’s winnings and reduced his competition ban, and said that “our relationships in China had no influence on our [original] decision.” But in a Chinese-language social media posting, the company said it viewed the Blitzchung incident with “righteous indignation” and would “resolutely safeguard [China’s] national dignity.”

The NBA initially described Rockets general manager Morey’s tweet — “fight for freedom, stand with Hong Kong” — as “regrettable.” But the Chinese version of that statement was more strongly worded, saying that the league was “extremely disappointed in the inappropriate comment.”

Although the NBA relies on the Chinese government’s good graces to exploit the country’s populous market, McGregor points out that the huge fan base in China for U.S. professional basketball gives the league “significant soft power, and the government knows that banning NBA games from being broadcast could cause considerable social unrest.”

Hollywood studios also have some soft power, but probably not as much as the NBA. “China’s consumers want their products and services, and that [desire] does
provide some leverage for us,” says former DMG executive Chris Fenton, who co-hosted a U.S. congressional delegation visit to Hong Kong and mainland China last month. But the Chinese government can easily turn off the Hollywood tap.

All of which means that controversies over doing business in China — and what compromises over free speech and other values should be made to facilitate it — are unlikely to end anytime soon.

“Hollywood is an ambassador for the U.S.,” says Leiden University’s Schneider.

“And producers and writers need to ask themselves what it says about wider social values when they self-censor and sanitize their content for financial gain.”