China Is Building Financial Leverage Over All Americans

In Economy, FOREIGN RELATIONS On

The American public was outraged this week when the Chinese government severely punished the Houston Rockets and the National Basketball Association over one pro-Hong Kong tweet. The NBA was caught between its financial incentives and the American values that underpin its reputation, namely defending free speech and human rights. Soon, all Americans might find themselves in the same bind.

Every major U.S. corporation that does business in China is now trying to balance the financial benefits against the risks. For years, few financial managers factored in human rights. But as Beijing becomes more repressive at home and more aggressive about enforcing political loyalty abroad, that calculation is changing.

“I think American businesses are waking up to the risks,” Secretary of State Mike Pompeo told “PBS NewsHour” on Wednesday. “It may seem that [doing business in China] makes profit in the short run, but the cost, the reputational cost to these companies, I think, will prove to be higher and higher as Beijing’s long arm reaches out to them.”

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