Beijing relies on the purchasing power of its consumerist population to show foreign companies time and again what they stand to lose if they fall out of favor. Now it seems to have hit H&M, but Marcel Grzanna uses previous cases to show that among Chinese consumers, pragmatism is stronger than the political ideology of the Communist Party after all. Frank Sieren examines why Elon Musk still has to cozy up to the CCP.
Only very attentive observers will have noticed that Xi Jinping was the only person to have not one, but two cups on the table at the People’s Congress in Beijing ten days ago. In his Friday column, Johnny Erling explains what this is all about and what other extraordinary privileges Xi has.
And I have one more journalistic tidbit to announce: For the future geopolitical relationship between Europe, the United States, and China, the week that is coming to an end is undoubtedly significant and should give us cause to take a comprehensive look at it, away from the flurry of news and events. No less a figure than the former Foreign Minister and current Atlantic Bridge Chairman Sigmar Gabriel has sounded out the political realities in an essay. Best take some time this weekend to let his theses sink in. China.Table will send them to you tomorrow, Saturday, in the usual way.
Have a great weekend.
Footage of burning Nike-brand sneakers blazed across numerous forums on China’s social media on Thursday. A cynical hashtag read #Herewegoagain: on to the next round. It is nothing new that Western companies are brutally pilloried in the People’s Republic. This always happens when Beijing sees its national interests threatened. As soon as foreign companies take a position on politically charged issues, they are met with a hail of hate speeches and calls for boycotts, which are at least multiplied by the state media, and in some cases even sparked by them.
This time, it is about cotton from Xinjiang, which has been used for years by many textile manufacturers worldwide. But because research by Western research institutions and the media has shown that the raw material is also produced with the help of forced labor by members of the Uyghur minority, many companies apparently feel obliged to stop the supply from Xinjiang.
On the one hand, supply chain laws, for example, at EU level, but also in Germany, are about to be implemented. The chains must be clear and traceable, and eliminating human rights violations is the absolute minimum. H&M has recently done a lot to address these issues and is ranked 20th in the current top 25 ranking of the Gartner Supply Chain Study – behind Nike in 16th place.
On the other hand, companies feel the growing unease among consumers with purchasing power in liberal-democratic industrialized countries. Their attitude towards products from China may be inconsistent, but irritating words such as forced labor are increasingly causing alarm bells to ring in Germany too.
So, in a less than elegant and, above all, unenviable manner, the companies dither precariously back and forth between value-oriented demands in the West and the wrath of an authoritarian government with the world’s largest consumer market behind it. Yet forced labor is only one manifestation of an exuberant discourse that, at its core, revolves around massive human rights crimes against the Muslim Uyghurs in Xinjiang. The US government speaks of genocide. Behind this lies an ideological conflict between the People’s Republic and the West. The fundamental question is to what extent Western societies accept the brutal actions of the Chinese government in order not to endanger their own economic interests.
The conflict is played out on several levels. The companies are unintentionally but inevitably forming their own front. The first salvos in the latest battle were fired not at the US sports goods manufacturer Nike but on Wednesday at the Swedish fast fashion brand H&M. The latter had announced last year that it would do without cotton from Xinjiang. Coincidentally or not, “Chinese internet users,” as Chinese state media put it, have now dug up that statement many months later. The temporal proximity to Monday’s Xinjiang sanctions against China by North America and the EU is startling.
Apparently, “Chinese internet users” didn’t care about H&M’s statement until a few days ago. It is all the more astonishing in what a short time the anger was able to make such high waves that H&M products were removed from e-commerce platforms such as Taobao, Tmall, JD.com, and Pinduoduo in one fell swoop. Even platforms for used goods joined the boycott. On the app stores of Huawei, Xiaomi, Vivo, and Tencent, H&M’s mobile app could no longer be downloaded. On China’s largest search engine, Baidu, as well as platforms such as Dianping and AutoNavi, information about the manufacturer’s locations in the country disappeared from search results, Reuters reported. On taxi service Didi, H&M stores could no longer be given as destinations to drivers.
Luxury online portal Jing Daily rated H&M’s crash in China as suitably unprecedented: “Few falls from grace have been this swift: Last week, H&M was riding high after a sell-out collaboration with Simone Rocha. Now, celebrities are racing to distance themselves from the company. The studios of actor Huang Xuan, with 10 million Weibo followers, and singer Victoria Song, with 49 million, have both released dissociative statements.”
Nike and others such as Adidas or the Japanese fashion chain Uniqlo were only caught a day later. These companies had also distanced themselves from cotton made from forced labor in the past. Companies, perhaps no longer expecting such outrage, were reminded by the state news agency Xinhua that cooperation was “meaningless” if there was no mutual respect. What was meant was the accusation that the companies would be swayed by reports based on alleged “lies” and unfairly scapegoat China. State broadcaster CCTV commented that Chinese consumers were “voting with their feet and boycotting recalcitrant companies“. The Communist Youth League, an influential institution in the power structure of the party and state, also warned companies not to “spread rumors”. The desire was father to the idea of “wanting to make money in China at the same time”.
The beating by the media was followed by hacking by prominent brand ambassadors who terminated their cooperation. In addition to H&M, Nike, and Adidas were also affected, with some of their highly publicized partners with a reach of millions publicly distancing themselves from the Western companies on social networks. The immediate effect of the boycott calls was reflected in the stock markets, where the prices of affected companies plummeted by up to five percent in some cases. Profiteers, on the other hand, were Chinese suppliers of sports goods such as Anda or Li Ning, which gained between seven and eight percent on the Hong Kong stock exchange.
However, the experience of the past years shows that comparable campaigns against foreign brands have not caused any lasting damage so far. Whether at Daimler after the dissemination of a harmless quote by the Dalai Lama, Volkswagen after the alleged treatment of Chinese as second-class customers, airlines, hotel chains, or luxury brands because of the division of their business areas into the People’s Republic of China and Taiwan, or anything on Japanese products after heated disputes over the status of the Senkaku/Diaoyu Islands in the East China Sea, claimed by both countries – after brief storms of indignation followed by companies kowtowing to Beijing, the waves usually smoothed out within a few weeks and business picked up again.
The fact that the state and its media have their fingers in the pie here and there when the anger of Chinese consumers bubbles over was shown by the example of the dispute with Japan. At the time, thousands of people marched past the Japanese embassy in Beijing and threw water bottles and fruit at the building. The bottles had previously been put into the hands of the protesters by organized helpers – fire at will. At the time, Toyota also only briefly feared for its sales when the manufacturer’s vehicles were indiscriminately demolished in Chinese cities. To this day, the Chinese police still patrol with cars made in Japan.
Moreover, Chinese consumers are also reluctant to follow the Communist Party’s exploratory wishes; they like to make their decisions individually. When the American professional basketball club Houston Rockets was targeted because of a manager’s tweet critical of Xinjiang, the Rockets’ games were initially removed from television programming in China. However, the ex-club of basketball icon and National People’s Congress delegate Yao Ming has so many fans that there was great resentment among NBA fans in the country. In many cases, patriotism only has a place when one’s own needs for Western imports are satisfied.
Nevertheless, the effect of the Chinese threats should also not be underestimated. Whether and when the cooperation with the brand ambassadors will continue is unclear, and so are the consequences for the success of the companies’ marketing. Sabre-rattling, whether it is state-concerted or grassroots, is extremely intimidating to companies at times. The best example is Volkswagen, which has maneuvered itself into great dependence on China with investments in the double-digit billions of euros. In an interview with the BBC more than a year ago, company boss Herbert Diess denied knowledge of re-education camps in Xinjiang. Did he really know nothing about it, or did he fear the wrath of Beijing?
Nikkei News Agency’s longtime China correspondent Katsuji Nakazawa spotted a striking deviation from strict protocol during the March meeting of the People’s Congress. Usually, there is only one porcelain teacup on each of the tables in front of the top officials in the presidium and the thousands of deputies seated before them in the plenum. Gloved servants regularly lift the lid and pour hot water.
But then everything turned out quite differently. Xi Jinping was the only person in the Great Hall of the People to have two teacups in front of him. This was no coincidence, the former head of the Nikkei office in Beijing speculated, especially since Xi Jinping himself sat in front of his two cups during group discussions in a small circle. A common saying came to Katsuji’s mind: ‘Ren zou, cha liang’ (人走茶凉), literally, “When people leave, their tea gets cold too.” Xi Jinping probably wanted to show that “his tea doesn’t get cold. There is another hot cup waiting for him”. Actually, he would have to step down constitutionally in 2023 after ten years in office. But he had the rules changed with a “Lex Xi” in 2018. He is allowed to remain at the helm.
Katsuji read that from the tea leaves. Scientifically, this is called “tasseography“, the high art of interpreting what is or may come. Western journalists poke around in coffee grounds, Asian journalists in the tea brew, when they talk about the political culture of an authoritarian system of rule that is not legitimized by elections and is full of hidden allusions due to a lack of transparency.
Some are so subtle that even most Chinese don’t recognize them. This applies, for example, to a bizarre privilege that only China’s party leader is allowed to claim once he has ascended to the Olympus of the nation’s ideological mastermind. From then on, he is allowed to write all numbers, figures, or dates that he puts down on paper in his theoretical works in the old written Chinese form (Fangkuai script), without having to use Arabic numerals like other authors. Xi Jinping has also claimed this honor since he enshrined his “Xi Jinping Thought” there in 2017 by amending the party statutes to celebrate it as “21st century Marxism”. He joins an elite group of “Marxist classics” that includes Mao Zedong, Deng Xiaoping, Jiang Zemin, and Hu Jintao as the fifth since the founding of the People’s Republic. In Xi Jinping’s new collections of essays and speeches, such as “The Party Leads All Work” (论坚持党对一切工作的领导) or “On the History of China’s Party” (中国共产党历史), all the numbers and figures used in the more than 300 pages of text are written with Chinese characters, even the dates.
The linguistic special treatment for the autocrat angered China’s Marxist polymath and science councilor Yu Guangyuan (1915-2013) early on. He published more than 90 books, thousands of essays, founded new scientific disciplines, and became one of the theorists who developed the concept of the “socialist market economy”. Yu fought back since 1991 with letters, petitions, and essays against publishing bureaucrats who “unscientifically, undemocratically, and unfairly” decided that he had to write numerical data in Arabic numerals in his publications. They mangled the language, often making a mockery of it, such as in the phrase: “Buguan sanqi ershiyi (不管三七二十一 ). This one means, “I don’t care even if three times seven equals 21.” In Arabic numerals, this would be written “Buguan 3721”. China’s idiom 不怕一万,就怕万一 would also take some getting used to. It means “I fear nothing except when it comes to the special one case in 10,000 occurrences. “It would look like this: 不怕10,000就怕1/10,000.
In 1986, a committee of seven government and party commissions had submitted proposals for standardizing numerical spelling. It was not until ten years later that they came into force as a binding, multi-page “Standardized set of rules on how numbers should be written in publications”. Yu had resisted for a long time with a specially made stamp and a sticker. He stamped his manuscripts in red, “Heartfelt request to comrade editors. Please do not change anything, all my figures are to be taken as I wrote them.” He asked the editors to publish the original version, “even though you will probably have to pay a fine. You can deduct that from my fee“. Yu gave me a collage of his interventions, complete with a stamp imprint and sticker. It made him feel like Don Quixote.
The outcry to protect the language is by no means unique to China. Since March, the historic Musée Carnavalet in Paris has sparked a heated debate in France, according to AFP. After its renovation for the upcoming reopening, it had the Latin script numerals added to a number of its exhibits with Arabic numerals. Louis XIV will be placed next to Louis 14 because it is “easier to read and understand“, the museum writes.
There is no public outcry in China as there is in France, certainly not about how the imperial privilege of being allowed to write only in Chinese becomes the unique selling point of the new ruler over China.
There is a number of such features, including that Xi Jinping lets himself be called the “core” of the leadership. I wonder if his two teacups are also part of it. Perhaps the Nikkei correspondent is just fabricating, has been reading too much Harry Potter. In the Prisoner of Azkaban volume, reading tea leaves appears under the name “tasseomancy”, composed of the French word “tasse” (cup) and the Greek “manteía” for divination.
What looks like a colorful ball pool is currently hitting world trade at a sensitive point – the stuck freighter “Ever Given” continues to block the Suez Canal. Ships are now jammed on both sides, as can be followed live online. It is still unclear when the container ship will be able to continue its journey.
Beijing relies on the purchasing power of its consumerist population to show foreign companies time and again what they stand to lose if they fall out of favor. Now it seems to have hit H&M, but Marcel Grzanna uses previous cases to show that among Chinese consumers, pragmatism is stronger than the political ideology of the Communist Party after all. Frank Sieren examines why Elon Musk still has to cozy up to the CCP.
Only very attentive observers will have noticed that Xi Jinping was the only person to have not one, but two cups on the table at the People’s Congress in Beijing ten days ago. In his Friday column, Johnny Erling explains what this is all about and what other extraordinary privileges Xi has.
And I have one more journalistic tidbit to announce: For the future geopolitical relationship between Europe, the United States, and China, the week that is coming to an end is undoubtedly significant and should give us cause to take a comprehensive look at it, away from the flurry of news and events. No less a figure than the former Foreign Minister and current Atlantic Bridge Chairman Sigmar Gabriel has sounded out the political realities in an essay. Best take some time this weekend to let his theses sink in. China.Table will send them to you tomorrow, Saturday, in the usual way.
Have a great weekend.
Footage of burning Nike-brand sneakers blazed across numerous forums on China’s social media on Thursday. A cynical hashtag read #Herewegoagain: on to the next round. It is nothing new that Western companies are brutally pilloried in the People’s Republic. This always happens when Beijing sees its national interests threatened. As soon as foreign companies take a position on politically charged issues, they are met with a hail of hate speeches and calls for boycotts, which are at least multiplied by the state media, and in some cases even sparked by them.
This time, it is about cotton from Xinjiang, which has been used for years by many textile manufacturers worldwide. But because research by Western research institutions and the media has shown that the raw material is also produced with the help of forced labor by members of the Uyghur minority, many companies apparently feel obliged to stop the supply from Xinjiang.
On the one hand, supply chain laws, for example, at EU level, but also in Germany, are about to be implemented. The chains must be clear and traceable, and eliminating human rights violations is the absolute minimum. H&M has recently done a lot to address these issues and is ranked 20th in the current top 25 ranking of the Gartner Supply Chain Study – behind Nike in 16th place.
On the other hand, companies feel the growing unease among consumers with purchasing power in liberal-democratic industrialized countries. Their attitude towards products from China may be inconsistent, but irritating words such as forced labor are increasingly causing alarm bells to ring in Germany too.
So, in a less than elegant and, above all, unenviable manner, the companies dither precariously back and forth between value-oriented demands in the West and the wrath of an authoritarian government with the world’s largest consumer market behind it. Yet forced labor is only one manifestation of an exuberant discourse that, at its core, revolves around massive human rights crimes against the Muslim Uyghurs in Xinjiang. The US government speaks of genocide. Behind this lies an ideological conflict between the People’s Republic and the West. The fundamental question is to what extent Western societies accept the brutal actions of the Chinese government in order not to endanger their own economic interests.
The conflict is played out on several levels. The companies are unintentionally but inevitably forming their own front. The first salvos in the latest battle were fired not at the US sports goods manufacturer Nike but on Wednesday at the Swedish fast fashion brand H&M. The latter had announced last year that it would do without cotton from Xinjiang. Coincidentally or not, “Chinese internet users,” as Chinese state media put it, have now dug up that statement many months later. The temporal proximity to Monday’s Xinjiang sanctions against China by North America and the EU is startling.
Apparently, “Chinese internet users” didn’t care about H&M’s statement until a few days ago. It is all the more astonishing in what a short time the anger was able to make such high waves that H&M products were removed from e-commerce platforms such as Taobao, Tmall, JD.com, and Pinduoduo in one fell swoop. Even platforms for used goods joined the boycott. On the app stores of Huawei, Xiaomi, Vivo, and Tencent, H&M’s mobile app could no longer be downloaded. On China’s largest search engine, Baidu, as well as platforms such as Dianping and AutoNavi, information about the manufacturer’s locations in the country disappeared from search results, Reuters reported. On taxi service Didi, H&M stores could no longer be given as destinations to drivers.
Luxury online portal Jing Daily rated H&M’s crash in China as suitably unprecedented: “Few falls from grace have been this swift: Last week, H&M was riding high after a sell-out collaboration with Simone Rocha. Now, celebrities are racing to distance themselves from the company. The studios of actor Huang Xuan, with 10 million Weibo followers, and singer Victoria Song, with 49 million, have both released dissociative statements.”
Nike and others such as Adidas or the Japanese fashion chain Uniqlo were only caught a day later. These companies had also distanced themselves from cotton made from forced labor in the past. Companies, perhaps no longer expecting such outrage, were reminded by the state news agency Xinhua that cooperation was “meaningless” if there was no mutual respect. What was meant was the accusation that the companies would be swayed by reports based on alleged “lies” and unfairly scapegoat China. State broadcaster CCTV commented that Chinese consumers were “voting with their feet and boycotting recalcitrant companies“. The Communist Youth League, an influential institution in the power structure of the party and state, also warned companies not to “spread rumors”. The desire was father to the idea of “wanting to make money in China at the same time”.
The beating by the media was followed by hacking by prominent brand ambassadors who terminated their cooperation. In addition to H&M, Nike, and Adidas were also affected, with some of their highly publicized partners with a reach of millions publicly distancing themselves from the Western companies on social networks. The immediate effect of the boycott calls was reflected in the stock markets, where the prices of affected companies plummeted by up to five percent in some cases. Profiteers, on the other hand, were Chinese suppliers of sports goods such as Anda or Li Ning, which gained between seven and eight percent on the Hong Kong stock exchange.
However, the experience of the past years shows that comparable campaigns against foreign brands have not caused any lasting damage so far. Whether at Daimler after the dissemination of a harmless quote by the Dalai Lama, Volkswagen after the alleged treatment of Chinese as second-class customers, airlines, hotel chains, or luxury brands because of the division of their business areas into the People’s Republic of China and Taiwan, or anything on Japanese products after heated disputes over the status of the Senkaku/Diaoyu Islands in the East China Sea, claimed by both countries – after brief storms of indignation followed by companies kowtowing to Beijing, the waves usually smoothed out within a few weeks and business picked up again.
The fact that the state and its media have their fingers in the pie here and there when the anger of Chinese consumers bubbles over was shown by the example of the dispute with Japan. At the time, thousands of people marched past the Japanese embassy in Beijing and threw water bottles and fruit at the building. The bottles had previously been put into the hands of the protesters by organized helpers – fire at will. At the time, Toyota also only briefly feared for its sales when the manufacturer’s vehicles were indiscriminately demolished in Chinese cities. To this day, the Chinese police still patrol with cars made in Japan.
Moreover, Chinese consumers are also reluctant to follow the Communist Party’s exploratory wishes; they like to make their decisions individually. When the American professional basketball club Houston Rockets was targeted because of a manager’s tweet critical of Xinjiang, the Rockets’ games were initially removed from television programming in China. However, the ex-club of basketball icon and National People’s Congress delegate Yao Ming has so many fans that there was great resentment among NBA fans in the country. In many cases, patriotism only has a place when one’s own needs for Western imports are satisfied.
Nevertheless, the effect of the Chinese threats should also not be underestimated. Whether and when the cooperation with the brand ambassadors will continue is unclear, and so are the consequences for the success of the companies’ marketing. Sabre-rattling, whether it is state-concerted or grassroots, is extremely intimidating to companies at times. The best example is Volkswagen, which has maneuvered itself into great dependence on China with investments in the double-digit billions of euros. In an interview with the BBC more than a year ago, company boss Herbert Diess denied knowledge of re-education camps in Xinjiang. Did he really know nothing about it, or did he fear the wrath of Beijing?
Nikkei News Agency’s longtime China correspondent Katsuji Nakazawa spotted a striking deviation from strict protocol during the March meeting of the People’s Congress. Usually, there is only one porcelain teacup on each of the tables in front of the top officials in the presidium and the thousands of deputies seated before them in the plenum. Gloved servants regularly lift the lid and pour hot water.
But then everything turned out quite differently. Xi Jinping was the only person in the Great Hall of the People to have two teacups in front of him. This was no coincidence, the former head of the Nikkei office in Beijing speculated, especially since Xi Jinping himself sat in front of his two cups during group discussions in a small circle. A common saying came to Katsuji’s mind: ‘Ren zou, cha liang’ (人走茶凉), literally, “When people leave, their tea gets cold too.” Xi Jinping probably wanted to show that “his tea doesn’t get cold. There is another hot cup waiting for him”. Actually, he would have to step down constitutionally in 2023 after ten years in office. But he had the rules changed with a “Lex Xi” in 2018. He is allowed to remain at the helm.
Katsuji read that from the tea leaves. Scientifically, this is called “tasseography“, the high art of interpreting what is or may come. Western journalists poke around in coffee grounds, Asian journalists in the tea brew, when they talk about the political culture of an authoritarian system of rule that is not legitimized by elections and is full of hidden allusions due to a lack of transparency.
Some are so subtle that even most Chinese don’t recognize them. This applies, for example, to a bizarre privilege that only China’s party leader is allowed to claim once he has ascended to the Olympus of the nation’s ideological mastermind. From then on, he is allowed to write all numbers, figures, or dates that he puts down on paper in his theoretical works in the old written Chinese form (Fangkuai script), without having to use Arabic numerals like other authors. Xi Jinping has also claimed this honor since he enshrined his “Xi Jinping Thought” there in 2017 by amending the party statutes to celebrate it as “21st century Marxism”. He joins an elite group of “Marxist classics” that includes Mao Zedong, Deng Xiaoping, Jiang Zemin, and Hu Jintao as the fifth since the founding of the People’s Republic. In Xi Jinping’s new collections of essays and speeches, such as “The Party Leads All Work” (论坚持党对一切工作的领导) or “On the History of China’s Party” (中国共产党历史), all the numbers and figures used in the more than 300 pages of text are written with Chinese characters, even the dates.
The linguistic special treatment for the autocrat angered China’s Marxist polymath and science councilor Yu Guangyuan (1915-2013) early on. He published more than 90 books, thousands of essays, founded new scientific disciplines, and became one of the theorists who developed the concept of the “socialist market economy”. Yu fought back since 1991 with letters, petitions, and essays against publishing bureaucrats who “unscientifically, undemocratically, and unfairly” decided that he had to write numerical data in Arabic numerals in his publications. They mangled the language, often making a mockery of it, such as in the phrase: “Buguan sanqi ershiyi (不管三七二十一 ). This one means, “I don’t care even if three times seven equals 21.” In Arabic numerals, this would be written “Buguan 3721”. China’s idiom 不怕一万,就怕万一 would also take some getting used to. It means “I fear nothing except when it comes to the special one case in 10,000 occurrences. “It would look like this: 不怕10,000就怕1/10,000.
In 1986, a committee of seven government and party commissions had submitted proposals for standardizing numerical spelling. It was not until ten years later that they came into force as a binding, multi-page “Standardized set of rules on how numbers should be written in publications”. Yu had resisted for a long time with a specially made stamp and a sticker. He stamped his manuscripts in red, “Heartfelt request to comrade editors. Please do not change anything, all my figures are to be taken as I wrote them.” He asked the editors to publish the original version, “even though you will probably have to pay a fine. You can deduct that from my fee“. Yu gave me a collage of his interventions, complete with a stamp imprint and sticker. It made him feel like Don Quixote.
The outcry to protect the language is by no means unique to China. Since March, the historic Musée Carnavalet in Paris has sparked a heated debate in France, according to AFP. After its renovation for the upcoming reopening, it had the Latin script numerals added to a number of its exhibits with Arabic numerals. Louis XIV will be placed next to Louis 14 because it is “easier to read and understand“, the museum writes.
There is no public outcry in China as there is in France, certainly not about how the imperial privilege of being allowed to write only in Chinese becomes the unique selling point of the new ruler over China.
There is a number of such features, including that Xi Jinping lets himself be called the “core” of the leadership. I wonder if his two teacups are also part of it. Perhaps the Nikkei correspondent is just fabricating, has been reading too much Harry Potter. In the Prisoner of Azkaban volume, reading tea leaves appears under the name “tasseomancy”, composed of the French word “tasse” (cup) and the Greek “manteía” for divination.
What looks like a colorful ball pool is currently hitting world trade at a sensitive point – the stuck freighter “Ever Given” continues to block the Suez Canal. Ships are now jammed on both sides, as can be followed live online. It is still unclear when the container ship will be able to continue its journey.
