The NBA and China’s Predatory Liberalism

Editor’s Note: Beijing's attempt to intimidate the NBA, and the NBA's rather craven response, is only the latest example of firms and country's bowing to Chinese pressure on human rights issues. Victor Cha, my Georgetown colleague, details how China uses economic coercion to try to silence critical international voices. Cha argues that the NBA, and the world, should take a firmer stance, working together to resist Chinese pressure.

Daniel Byman

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Two arguments have been made by those who say the NBA was right to shut down Houston Rockets general manager Daryl Morey after he tweeted in support of the protestors in Hong Kong on Oct. 4. One of these is based on “sports purism”—that is, the notion that sports and politics should be keep separate and that the NBA should focus on basketball and cultivating goodwill in China, not politics. The other argument in support of censoring NBA statements about Hong Kong is economics. As a $4 billion business in China, which adds about $133 million in value to every team owner’s franchise and more than $1.5 billion (over five years) in streaming revenue to the league, the NBA has way too much to lose in a market where basketball has become the number one sport among an emerging Chinese consumer middle class that is larger than the entire U.S. population.

Both arguments are wrong. For the NBA and the world, playing China’s game is a losing proposition. Caving to China may save some dollars in the short term, but it sacrifices even greater autonomy in the long term. China defies the liberalist expectation that interdependence creates cooperation and harmony. Instead, China practices “predatory liberalism”—it leverages the vulnerabilities of market interdependence to exert power over others in pursuit of political goals, and the NBA is not the first of China’s targets. China is not the only authoritarian country in the international system to wield economic power, but China’s size and its critical position in global supply chains make the exercise of predatory liberalism particularly pernicious. Indeed, there is a long list of victims of China’s economic coercion.

For example, after the Norway Nobel Committee awarded the Nobel Peace Prize in October 2010 to Chinese dissident Liu Xiaobo, China initiated a draconian sanctions campaign against the small Scandinavian country to reverse the decision, banning the import of all Norwegian salmon to the country—not salmon from other exporters like Scotland, just salmon from Norway. China continued this practice despite the action being an obvious violation of World Trade Organization rules and drove down Norway’s market share of salmon in China from more than 90 percent in 2010 to less than 30 percent in 2013.

China’s predatory behavior was also on full display in 2017 when South Korea agreed to the emplacement of a U.S. missile defense battery in the city of Seongju. While meant to defend against North Korean ballistic missiles, the Terminal High Altitude Area Defense System, or THAAD, was opposed by China as encroaching on its security interests, and Beijing launched a concerted economic campaign against South Korea to reverse the action. The campaign targeted the South Korean conglomerate Lotte Group, which owned the land that housed the U.S. missile defense system. Within the first quarter of 2017, Lotte’s supermarket businesses in China suffered from a boycott and “safety violations” that forced the company to close half of its 112 stores in China. Overall, Lotte lost about $1.7 billion in China in 18 months before leaving the country entirely. Beijing also cracked down on tourism to South Korea. A ban on tour groups started in March 2017 and continued through the Pyeongchang Olympics that winter, resulting in a 48 percent drop in Chinese visitors to South Korea in 2017 (from 8 million to 4.2 million year on year) and a $15 billion financial loss for South Korea’s tourism industry.

In April 2012, the Philippine Navy confronted Chinese fishing vessels operating in the disputed Scarborough Shoal and well within Manila’s 200-nautical-mile Exclusive Economic Zone (EEZ). China responded by blocking the entry of Philippine bananas into the country, claiming they were infested by pests, and then additionally held up shipments of coconuts, mangoes, pineapples and papayas from the country. In the end, after two months of pressure, Manila agreed to a mutual withdrawal of vessels from Scarborough Shoal. China, however, kept its boats there and then added ships to prevent Philippine vessels from accessing the area.

China’s reaction to the Oct. 4 tweet by Morey in support of Hong Kong was therefore predictable. The Chinese government reportedly demanded Morey’s immediate firing, Houston Rockets paraphernalia was removed from sale on some Chinese e-commerce sites, and all of the Rockets’s exhibition games were banned from Chinese TV. NBA Commissioner Adam Silver estimated the cost to the league of Chinese punitive actions over this single tweet to be “substantial,” running in the tens if not hundreds of millions of dollars.

China’s predatory actions against the NBA make a mockery of the time-honored notion that sport should be separated from politics. Beijing has demonstrated through its predatory liberalism that no sport, let alone country or individual, is beyond the wrath of a Chinese clampdown. With every party that succumbs to China’s predatory liberalism, Beijing will become more emboldened to deploy predatory liberalism to bully individuals and companies that are critical of its suppression of political freedoms in places like Hong Kong, Xinjiang, Tibet and Taiwan. If China can stifle an individual’s empathetic tweet about Hong Kong, what’s next? Will the NBA gag players or managers from expressing outrage if China rolls tanks over the protestors in Hong Kong? If China decrees it, will the NBA not send teams to play exhibitions in Taiwan? If China decrees it, will the NBA stop fans from wearing “Google Uighurs” T-shirts to a Knicks game at Madison Square Garden but allow them to wear “Resist” or “Black Lives Matter” adorned garments? Rather than trying to suppress any future dissent with an implicit gag order, the NBA can set three standards for governments, companies and individuals to stand up to Chinese coercive economic bullying.

First, the NBA can make China responsible for its choices. Whenever China practices predatory trade coercion against those dependent on its market, it assumes that the Chinese people can weather the disruption of this tie while the target cannot. Here, the strategy for the NBA and for other victims is to be confident in their products. China may continue to ban broadcasts of Rockets games, but how long before Chinese people express frustration? It’s not like there is an alternative to NBA stars like Lebron James or Steph Curry for youth on a Chinese basketball team to worship. China’s punishment may be costly in the short term, but in the long run, the demand signal from Chinese consumers will remain strong. And if the Beijing authorities are seen to be standing in the way, the Chinese Communist Party may be doing more harm than good to its own domestic standing. Moreover, the attention brought to the Chinese over the NBA ban could make the Chinese people aware of alternative narratives of the events in Hong Kong beyond the official media’s framing of the protests as criminal, thuggish and unjustified behavior.

Second, the NBA shouldn’t apologize for being American. Morey’s tweet about Hong Kong was not anti-Chinese; it was pro-American. That is, the Rockets team administrator was not seeking to subvert the Chinese government. He was simply doing what Americans do. Americans speak out when no one else will. It’s not a choice but an obligation. That is why Congress wrote a bill, The Hong Kong Human Rights and Democracy Act of 2019, the week prior to Morey’s tweet, expressing support for the autonomy of the Hong Kong people, the exact same sentiment as Morey’s.

The NBA is the embodiment of American soft power, and its players are cultural ambassadors in their own right. Moreover, the NBA has arguably been the most politically tolerant of American sports; it has fired an owner for racist comments and pulled the 2017 All-Star Game out of a city with discriminatory policies. It should own this identity in the face of challenges rather than sacrificing it for the almighty dollar. This is not to say that the NBA should take on political causes abroad, but if its players and coaches feel compelled to make statements of their own personal accord in the face of unconscionable injustice, they should not be shut down.

Finally, NBA players should be motivated to speak out not because of politics, but because of their humanity. The danger going forward is that there will be an implicit gag order on players who might offend the Chinese government. While there may be legal protections that prohibit the NBA from punishing players who speak out, sports agents already have advised clients like Lebron James not to comment on the political situation in China. Another NBA superstar, James Harden, who visits China once or twice a year, said, “I’m staying out of it [Hong Kong].” When NBA All Stars like Klay Thompson, Gordon Hayward, Rajon Rondo, CJ McCollum, Michael Carter-Williams, George Hill, Dwight Howard and Kyle Lowry top a list of 55 players with multimillion-dollar shoe deals in China, they have an incentive to bite their tongues on Hong Kong.

But presumably when players in the United States kneel during the national anthem or support the Black Lives Matter movement, they do so not to be expressly political, but because they believe in the inherent dignity afforded to every individual regardless of skin color or persuasion. NBA players should feel unapologetic in supporting the protestors in Hong Kong not as fellow political activists, but as fellow human beings. This is a lesson that does not seem to be lost on those international NBA players who have lived in distressed societies, like Enes Kanter of the Boston Celtics, who, after pointing out injustices and personal persecution in his country, tweeted, “FREEDOM IS NOT FREE.” Other players and their profit-seeking agents might also learn from the example of NBA star Kyrie Irving, who offered a thoughtful rationale when asked about fans wearing “Stand with Hong Kong” T-shirts to a Brooklyn Nets game:

[The black community is] fighting for everyday freedoms. So when I think about Hong Kong and China, the people are in an uproar, and for us as Americans to comment on it … you’re connected nonetheless, especially when it impacts freedoms or world peace. So for me as an individual, I stand up for those four pillars, and when they’re being conflicted, I can understand why protestors come to the games. (emphasis added)

China’s predatory liberalism is an affront to the liberal international order, and the NBA, whether intended or not, is now a part of this struggle. Its actions going forward will set precedents, hopefully positive, for governments, companies, and individuals both inside and outside of China.