Chamath Palihapitiya, the Silicon Valley billionaire investor and part-owner of the Golden State Warriors basketball team, triggered a huge backlash when he said “nobody cares” about the Uyghurs in China’s Xinjiang region.
While his comments in January were slammed for being unusually callous, they were also rare in another sense. In the months leading up to the Beijing Winter Olympic Games, which open on Friday, companies have been keeping their heads down when asked about the persecution of more than 1mn Uyghur Muslims, which the Biden administration has called “genocide”.
None of the 13 members of the International Olympic Committee’s top corporate sponsorship programme — which includes Coca-Cola, Visa, Intel, Airbnb, P&G, Allianz and Toyota — commented when asked how they viewed China’s treatment of the Uyghurs. Mars Wrigley, the Snickers manufacturer that has a direct sponsorship deal with the Beijing Olympics, also declined to comment. Airbnb and P&G defended their participation, saying they were supporting athletes. Atos, the French IT company, said it enabled the Olympics regardless of location.
On Capitol Hill, Democrats and Republicans are critical of US companies which they believe are caving in to Chinese pressure to maintain market access. “It’s disturbing that so many American companies are turning against American values to stay in the good graces of the Chinese Communist party,” says Michael McCaul, the top Republican lawmaker on the House foreign affairs committee in Congress.
“Just look at the companies sponsoring the Olympics and refusing to speak up for human rights,” he adds. “We can’t let these companies help cover up genocide and undermine our national security.”
The silence underscores how US companies are caught in the crosshairs as Washington and Beijing engage in a cold war that is creating complex faultlines for corporate America to navigate.
President Joe Biden — whose administration will boycott the Beijing Games — has taken a tougher stance than many expected on China over everything from its repression of the Uyghurs to its crack down on freedom in Hong Kong. He has also implemented measures that make it harder for Beijing to obtain sensitive US technologies such as semiconductors.
His increasingly powerful Chinese counterpart, Xi Jinping, has shown no sign of responding to US demands over issues such as Taiwan, around which China is conducting assertive military activity.
While Beijing is also cracking down on foreign companies operating in China that criticise its human rights record.
Intel is the latest multinational to face the conundrum. The semiconductor maker apologised to Chinese customers in December for saying that it could not source components from Xinjiang — because of a new US law that requires companies to prove that imports from the northwestern Chinese region are not made with forced labour.
In 2021, several multinationals, including Nike and H&M, removed language from their websites that expressed concern about forced labour in Xinjiang after Beijing orchestrated consumer boycotts to punish the apparel brands.
Multinationals are also facing more pressure because of national security actions taken by the US. They are paying more attention to their exports to China and investments in the country, as the administration continues to add Chinese entities to export and investment-ban lists.
House lawmakers are also preparing to vote on a sprawling 2,912-page China-related bill that includes a measure to create a mechanism to screen US investment in China, which would require Senate approval. The White House is also looking at the issue.
Companies must also grapple with measures taken in China. In 2021, Beijing passed a law that allows the government to punish companies that facilitate the enforcement of US sanctions.
Yet human rights groups say companies can no longer claim to be serious about environmental, social and corporate governance if they are silent on Xinjiang.
“No company can credibly claim to have an ESG or human rights policy when it remains silent in the face of the second most powerful government in the world committing crimes against humanity,” says Sophie Richardson, head of China policy at Human Rights Watch.
“Either you’re serious about these commitments or you’re not,” she adds. “The Olympics is just another example of people clearly choosing to make money rather than figure out how to use their power to improve the situation.”
Some of the sponsors have been here before, having faced criticism over their involvement in the summer Olympics in Beijing in 2008. But the scope of the persecution in Xinjiang, where over 1mn Uyghurs have been detained in camps in recent years, has intensified the scrutiny.
The economic stakes for companies are also higher now because the Chinese market is so much bigger. And companies also have to deal with consumers in both nations who have much more power because of social media.
North Face was targeted by human rights activists in 2021 after it erased language about forced labour from its website. But, says Steve Rendle, chief executive of VF Corp, which owns the outdoor clothing brand, Xinjiang has also become a “big driver of energy” for Chinese consumers. Rising nationalism, expressed in how younger Chinese consumers use their purchasing power, is “absolutely a consumer trend”, he says.
Cathy McMorris Rodgers, the top Republican on the House energy and commerce committee, says she and her colleagues want US companies to defend human rights and will continue to apply pressure. But, she says, US consumers will ultimately be the most powerful lever to change behaviour.
“It would be foolish for these companies to ignore their American customers, who are appalled by China’s human rights abuses and the genocide of Uyghur Muslims,” McMorris Rodgers says.
Top-tier Olympic sponsors buy exclusive rights to product and service categories such as soft drinks, IT or vehicles for contract periods of a minimum four years. That ensures sponsors sign on for at least one summer and one winter Games in deals that can cost hundreds of millions of dollars to market their connection with the Olympic rings.
Ricardo Fort, a consultant who previously worked in global sponsorships at Coca-Cola and Visa, says the criticism of the Olympic sponsors is “unfair”. He was working at Visa in 2015 when the IOC chose Beijing to host the 2022 Games. He says sponsors preferred China over Kazakhstan, the only other bidder, after a spate of European cities dropped out.
After the success of the 2008 Games, businesses welcomed the chance to work with China again, says another former executive with experience in Olympic team sponsorships. Since the awarding of the 2022 Games, however, China has come under intense criticism for its policies in Xinjiang, prompting some companies to pare back their marketing plans or spend less time touting the Games, with many blaming the pandemic.
Rick Burton, a sport management professor at Syracuse University who was chief marketing officer for the US Olympic Committee at the 2008 Games, says sponsors knew they would come under pressure in the weeks running up to the 2022 Games. But, he says, they are facing a perfect storm, as pandemic restrictions and a chockablock US sports calendar in February threaten to rob them of viewers, adding to the woes sparked by the intense focus on the Uyghurs’ situation.
“They are . . . trying to get through the anti-aircraft flak,” says Burton. “The sponsors are really just trying to hang on and get through these Games.”
Fort says that even if all the sponsors took a public stand against China, it would have limited impact on the IOC. “If you want to drive change, you’ve got to ask the broadcasters. They’re responsible for 73 per cent of the revenue.”
No company is more exposed over the Beijing Games than NBC, the US network that has dominated coverage of the Olympics for decades. In 2014 it renewed its deal with the IOC, paying $7.75bn for the exclusive US broadcast rights to the Games from 2022-32, making it one of the main sources of revenue for the IOC. The close alignment of interests between NBC and the IOC — the television network reported $1.8bn in revenue from the Tokyo Games despite poor viewing figures — means they are frequently lumped together by critics of Olympic decision-making.
Among those critical of the IOC’s move to stage the Games in Beijing is Bob Costas, a longtime NBC presenter who was the face of its coverage for 12 Olympics. “The IOC deserves all of the disdain and disgust that comes their way for going back to China yet again,” he told CNN in January. “They’re shameless about this stuff.”
The IOC has also been pummeled over its handling of the case of Peng Shuai, the Chinese tennis star who was silenced on domestic social media after she alleged being sexually assaulted by a top Communist party official. The IOC said she was “safe and well” after holding two calls with the athlete, prompting human rights groups to accuse it of facilitating Chinese censorship.
NBC has come under political scrutiny from US lawmakers who posed a series of questions to the network, including whether it had safeguards in place to ensure it did not use forced labour during the event. “As NBCUniversal begins its coverage of the 2022 Winter Olympics, we believe viewers and listeners deserve to understand whether your programming has been influenced by the IOC or the Chinese Communist party,” they wrote.
In their letter, McMorris Rodgers and Robert Latta, an Ohio lawmaker, asked NBC how it planned to “shed light on China’s history of human rights abuses” in its coverage of the Games.
In a video presentation, NBC said its coverage of the Beijing Games would “provide perspective on China’s place in the world and the geopolitical context”. But it emphasised that its Olympic broadcasts would be primarily focused on the athletes. The network isn’t sending announcers to Beijing, citing Covid-19 concerns, so the commentary on events such as figure skating and snowboarding will be made from Connecticut. But it said there would be NBC news reporters at all of the Beijing Olympic venues.
In presentations to investors last week, executives from Comcast, which owns NBCUniversal, did not directly mention the Beijing Games, compared with more than 20 references to the Tokyo Olympics in a similar call last summer.
Marketing executives say NBC is already looking beyond Beijing to the Paris Olympics in 2024, given the Covid-damped ratings in Tokyo last summer. By some measures Tokyo was the least watched Games on record, attracting an average 15.5mn viewers for peak-time broadcast in the US, its smallest audience since NBC began covering the summer games in 1988.
“It’s going to be a more muted Olympics given the absence of fans, the inability to travel and the geopolitical context,” says Brian Wieser, global president of business intelligence at GroupM, a media investment company. “With these issues around, brands are not wanting to expose themselves to risks of association with problematic policies.”
One dilemma facing corporate sponsors is how to respond if athletes wearing their logos use the Olympics to criticise Beijing over its human rights. The top 13 sponsors also did not comment when asked by the FT how they would respond in that situation.
The consequences of angering China have already been made crystal clear. After Enes Kanter, a Boston Celtics basketball player, labelled Xi a “brutal dictator” on social media last year — in a protest over the treatment of Tibet — the club’s games were stripped from the internet in China and state-run outlets stopped broadcasting them.
Some prominent former competitors, including two-time US Olympic cross-country skier Noah Hoffman, and human rights advocates have urged athletes competing in Beijing to stay silent during the Games for their own safety.
IOC rules bar protests during medal ceremonies, in the middle of competition, or during the opening or closing ceremonies. Athletes can “express their views” in media interviews, during press conferences, on social media, and through other avenues, but Olympic officials say US athletes have been “briefed by the state department” and reminded that they are subject to local laws.
One Beijing 2022 official sparked concern by suggesting that athletes could be punished for voicing political views.
While sponsors have kept quiet, some officials with western Olympic teams have said they will be supportive if and when their sports stars use their time in the spotlight to draw attention to China’s human rights record. “We will always protect our athletes, regardless of whether they want to speak out on non-sporting issues or not,” the presidents of the German Olympic and Paralympic teams said last week.
Some companies, such as Nike, have remained silent about human rights in China even as they promote social justice campaigns in the US, including one more recently linked to tennis champion Naomi Osaka. Nike also declined to comment about its stance on Xinjiang and how it would respond if any of its sponsored athletes protest in Beijing.
Jewher Ilham, a Uyghur activist whose father Ilham Tohti was jailed for life by China on separatism charges that were widely criticised as politically motivated, says Palihapitiya’s comment sparked a deluge of support for Uyghurs around the world. But she says sponsors, such as Coca-Cola — which has a bottling plant in Xinjiang — have not learnt any lessons. The company declined to respond to Ilham’s comment.
“Major corporations such as Coca-Cola sponsored the summer Olympics in Berlin in 1936, while fully aware of the conditions in the country, even if they did not foresee what was to come,” says Ilham. “Coca-Cola clearly did not learn from its past mistake when deciding to be a sponsor of the 2022 Winter Olympics in Beijing.”