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For Olympic sponsors, “China is an exception”

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For Olympic sponsors, “China is an exception”

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At the bottom of the slope where snowboarders will compete in the 2022 Beijing Olympics, an electronic sign scrolls through advertisements from companies like Samsung and Audi. Coca-Cola cans are adorned with Olympic rings. Procter & Gamble has opened a beauty salon in the Olympic Village. Visa is the official credit card of the event.

President Biden and a handful of other Western leaders may have declared a “diplomatic boycott” of the Winter Games, which begin next week, but some of the world’s most famous brands will still be there.

The prominence of these multinational corporations, many of them American, has taken the political sting out of efforts by Mr. Biden and other leaders to punish China for its human rights abuses, including a campaign of repression in the western region of Xinjiang that the State Department has declared a genocide.

The Olympic sponsorship reflects the stark choice facing multinational companies working in the country: jeopardize access to an increasingly sensitive China, or face the reputational risk associated with doing business there. . As for the Beijing Olympics, the decision was clear.

While sponsors have faced protests from human rights activists in several countries, they have largely dismissed them, opting instead to keep China and its emerging nationalist consumer class happy.

The companies say the Olympics aren’t political and have spent hundreds of millions of dollars on deals spanning multiple Games, not just the Beijing ones. Collectively, the 13 major Olympic sponsors have contracts with the International Olympic Committee that total over $1 billion.

“They just seem to be proceeding as normal,” said Mandie McKeown, executive director of the International Tibet Network, a group that helped organize protests by more than 200 rights groups calling for boycotts of the Olympics. “It’s literally like they have their heads in the sand.”

For companies, however, the risk of irritating Chinese consumers by criticizing Chinese policies is high. Armies of patriotic voices on Chinese social media have furiously denounced foreign brands for perceived, vitriolic slurs often amplified by government and official media.

Adidas, Nike and other fashion companies have faced nationwide boycotts in China after raising concerns over reports of forced labor in Xinjiang, the region where the Communist Party forced millions of Uyghur Muslims in mass detention and re-education camps. When fashion retailer H&M pledged to stop buying cotton from Xinjiang, a Chinese consumer boycott cost it about $74 million in lost sales in a quarter.

Even major Olympic sponsor Intel faced backlash last month after the company issued a letter calling on international suppliers to avoid sourcing products from Xinjiang. In the face of fury, Intel rewrote the letter within days to remove the reference to Xinjiang.

“The space to please both sides has evaporated,” said Jude Blanchette, a researcher at the Center for Strategic and International Studies in Washington. “When choosing who to upset, it’s either a bad week or two of press in the United States versus a very real and justified fear of losing market access in China.”

Major sponsors have evaded questions, sometimes clumsily, about whether their support actually whitewashes the Communist Party’s authoritarian regime. The Olympics, leaders say, should not be politicized, pointing to the Olympic Charter, which says as much, despite a long history of political intrigue surrounding the Games.

Only four major sponsors — Omega, Intel, Airbnb and Procter & Gamble — responded to requests for comment. Omega, official timekeeper and data manager of the Olympic Games, said that since its partnership with the Olympic Games began in 1932, “our policy has been not to get involved in certain political issues because that would not advance the because of sports”. in which lies our commitment.

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

“Skiing and sports have nothing to do with politics,” said Justin Downes, president of Axis Leisure Management, a hospitality company and entrepreneur who works with the Canadian Olympic Committee and others to help logistics and supplies.

Almost all Olympic sponsors have codes of ethics or a commitment to corporate social responsibility to honor human rights, but these Games have tested how far they will go to speak out against widely acknowledged abuses.

In China, these violations include the crackdown in Xinjiang, as well as the continued repression in Tibet, the erosion of political freedoms in Hong Kong, and threats to assert China’s territorial claim to Taiwan.

Mr Downes has signed contracts with Olympic venues to ensure that the people he employs do not raise politically sensitive topics. If any member of his staff, which includes medical responders, makes a political statement on topics like Xinjiang, Mr Downes could be held accountable, he said.

“We’re told not to divulge certain topics or post pictures on social media,” Mr Downes said of the contracts. “They don’t want people to come forward and make a statement. It’s common sense.

China’s critics say sponsors have teamed up with an event that could tarnish their brands. Some have compared these Games to the 1936 Summer Olympics in Berlin, which Nazi Germany used to showcase Hitler’s fascist regime.

“We have always repeated these words, ‘Never again’,” said Tenzyn Zöchbauer, an ethnic Tibetan who joined protests in Germany against Allianz, the insurance and financial services giant which is also one of the major Olympic sponsors. “At least genocide should be a red line,” she added, referring to the Chinese 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 the huge Chinese consumer market.

Beyond the main sponsors, many international companies promoted their products in Olympic-themed campaigns. In a mall in Beijing, Adidas has erected a ski slope with ski models. In a Pizza Hut, the official mascot panda of the Games waves from a shop window.

A Bing Dwen Dwen ski, as the panda is known in China, is also splashed on KFC boxes.

The importance of these advertising campaigns risks attracting unwanted attention in the United States.

Executives from Coca-Cola, Airbnb, Intel, Procter & Gamble and Visa were hauled before Congress in July and accused of putting profits before ethics with their Olympic sponsorships. They were all assailed in public letters. Lawmakers in the United States and Europe called on them to participate.

Despite this, the issue of human rights abuses in China has not sparked enough protests to threaten the profits of multinational companies, while angry Chinese consumers have fueled painful boycotts.

“Let’s be honest – nobody, nobody cares what happens to Uyghurs, okay?” Chamath Palihapitiya, the billionaire investor and co-owner of the National Basketball Association’s Golden State Warriors, said this month. Mr Palihapitiya was criticized for the remark, and the Warriors later downplayed his involvement with the team.

Among the main Olympic sponsors, only Allianz is known to have met with activists calling for a boycott of the Games. However, the company did not comment. A protest last week outside his office in Berlin drew just seven people.

Many of the major sponsors seem to be hoping to get through the Olympics without attracting too much attention.

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

“If any other government in the world did what the Chinese are doing in Xinjiang or even Hong Kong, a lot of companies would increase their stakes,” said Michael Posner, a former State Department official who now works at the Stern of New York University. Business school.

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

“China is an exception,” he said. “It’s so big, both as a market and as a manufacturing juggernaut, that companies feel they can’t afford to get in the government’s crosshairs, so they’re keeping their mouths shut.”

Claire Crazy contributed to the research. Keith Bradsher contributed report.

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