Ask Mei

Country risks

What do JW Marriott, Delta Air Lines and Zara have in common?

Country risks

Well, they all issued public apologies in China this month for making the “grave mistake” of listing Taiwan, Hong Kong, Macau (and in Delta and Marriott’s cases, Tibet) as separate countries on their websites or in their market surveys.

This caused a major backlash among Chinese on social media and led to Marriott’s China website being taken down by the authorities. The US hotel chain was quick to apologise, saying the poll had been pulled and the language used was a mistake. But the Marriott-triggered debacle led netizens to search other foreign company sites for similar ‘infringements of Chinese sovereignty’.

Such mistakes are not uncommon among Western companies based on my experience working and dealing with global corporations in the past 20 years. However, sovereignty is one of the paramount issues for the Chinese government so it’s critical for any company doing business inside China to be exceptionally sensitive about it.

As explained in my earlier column (see WiC367), China’s national psyche in the past few decades dangerously blends an inferiority complex with an innate sense of superiority. On the one hand, there is deep-rooted pride in the nation’s rich, 5,000 year-long history as well as its recent economic and technological achievements; but the residue of the “hundred years of humiliation by the Western imperialists” – when China lost full control of its sovereignty in the treaty port period – still lurks. This ‘shameful era’ has been hammered home in our schoolbooks and ingrained in many Chinese people’s mind. As a result, the Chinese are highly sensitive about anything that remotely challenges the country’s sovereignty, regardless of whether it’s an intentional provocation or a careless oversight by a Western web geek who lacks geographical knowledge.

In terms of the aforementioned places, Hong Kong and Macau are former European colonies but they were handed back to the People’s Republic in 1997 and 1999 respectively and became “Special Administrative Regions” of China (they are not countries). Tibet has been an autonomous region inside China since 1951. Taiwan’s official name remains the Republic of China even after the Nationalists retreated to the island from the mainland after losing the civil war to the Communists in 1949. Although it has full self-governance, the island lost its UN seat to Beijing in 1971 and is considered by the PRC to be an inalienable part of the country as part of the ‘One China’ doctrine. Therefore, if a company needs to distinguish Hong Kong, Taiwan and Macau from the rest of mainland China on a website or in a survey it’s safest to refer to “locations” in the dropdown bar’s options instead of “countries”. Tibet should be treated as similar to a Chinese province and not be broken out separately as even a ‘location’ (unless you want your company website to be permanently barred in China).

A couple of decades ago, international companies might have paid less attention to these important details because China’s market was either inaccessible to them or insignificant to their total sales. But with the country’s growing economic power and influence in global geopolitics – it is already the largest consumer for luxury goods, automobiles and most commodities – any lack of sensitivity towards China’s sovereignty could trigger government protests, a public outcry and even a boycott by consumers. And it can happen especially fast thanks to the ubiquity of social media. That’s exactly what happened with Marriott, Delta and Zara. In fact, a few Chinese netizens were so angry and assertive that they even called for the government to “kick” these offenders out of the China market.

Delta and Zara were quick to update their websites in response to the furore while Marriott’s CEO Arne Sorensen said: “We don’t support anyone who subverts the sovereignty and territorial integrity of China and we do not intend in any way to encourage or incite any such people or groups. We recognise the severity of the situation and sincerely apologise.”

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