Corporations and Free Values

July 14, 2021 Updated: July 14, 2021

Commentary

The Biden administration has recently added 23 Chinese companies to its “Entities List” which bars U.S. companies from dealing with them because of their involvement in human rights violations. This is in addition to several Chinese polysilicon producers who were added to the list last week.

By this action, the Biden team is demonstrating that it is in no way weakening the Trump administration’s China policy but rather is strengthening that policy. Biden is also sending a powerful message telling the CEOs of global companies that if they want to do business in America, they must not in any way support abuse of human rights in China.

This is a most important message that must continually be driven home because Beijing is constantly pressuring free world corporate leaders to think only of making money in China while they abandon the values of the free world.

This pressure from Beijing has a long history. In 1997, Sony and the Disney studio produced a film entitled “Seven Years in Tibet.” Also known as “Kundun,” the movie showed the brutalization of Tibet by the Chinese Communist Party (CCP) and its so called People’s Liberation Army (PLA). The movie was immediately banned in China along with any other movies from those studios. Disturbed by this prohibition, Disney sent top executives to China to apologize and attempt to get the ban lifted. Shortly thereafter, Disney CEO Michael Eisner declared “Kundun” to have been a “stupid” mistake and then added that “the good news is that nobody watched it.” Since that time, there has been no further movie or show produced by a U.S. studio that has portrayed China in any way except as heroic. Thus, this kowtow enabled Disney to get back into the Chinese market, but it showed that Eisner and, perhaps the whole studio, gave not a fig for human rights and free speech as long as they could make money in China.

Epoch Times Photo
Richard Gere listens during a hearing of the House Foreign Affairs Committee Subcommittee on Asia and the Pacific on Capitol Hill in Washington on Dec. 6, 2017. (Brendan Smialowski/AFP/Getty Images)

This is a huge weakness of the free world and especially of the American system of governance of corporations. We say that corporations like Disney, Apple, and Fedex are American corporations because they are chartered in the United States. In fact, however, they have a kind of double personality. Under American law they are considered to be persons with all the rights accorded to American citizens. They can and do make political contributions, lobby the U.S. Congress and the White House, and challenge the government in court where they often win their cases. They make huge financial contributions to political parties and candidates and they employ armies of lobbyists and lawyers to influence the U.S. Congress and the White House. Indeed, they often employ former high-ranking officials to help them spread and maintain their influence in Washington.

In China, the story is, of course, completely different. Free world CEOs have zero political influence there and no guaranteed legal rights at all. They operate at the pleasure and whim of the CCP which obeys no rule of law. The CEOs can be and are coerced regularly. When the coach of the Houston Rockets basketball team tweeted in favor of demonstrators in Hong Kong last year, the airing of National Basketball Association (NBA) basketball games in China was suddenly halted, meaning that the teams and their sponsors would get no revenue from advertising in China. Since then, the NBA coaches have made no further comments and the airing has been restored. No laws were passed. No orders were given. The NBA got the message and began to behave as Beijing wished.

Free World leaders must act to ensure that their corporations will not all quietly become tools of Beijing propaganda and policy. Perhaps corporate charters need to be amended such that the CEOs and other officers of the corporation are held responsible for upholding certain democratic values regardless of where they operate. For example, U.S. corporations are forbidden by U.S. law to pay bribes anywhere in the world. But they are not forbidden to make donations to U.S. political leaders or to try to influence the decisions of those leaders. Even more importantly, they are not forbidden to increase their profits by transferring critical U.S. origin technology to hostile foreign countries or to accept what are often bribes and respond positively to threats by foreign governments who wish the corporations to act in ways that may be harmful to America.

It is time for Washington to realize that economic coupling with China inevitably makes U.S. corporations and thus the United States itself vulnerable to hostile coercion by the Chinese Communist Party.

Clyde Prestowitz is an Asia and globalization expert, a veteran U.S. trade negotiator, and a presidential adviser. He was the leader of the first U.S. trade mission to China in 1982 and has served as an adviser to Presidents Ronald Reagan, George H.W. Bush, Bill Clinton, and Barack Obama. As counselor to the secretary of commerce in the Reagan administration, Mr. Prestowitz headed negotiations with Japan, South Korea, and China. Mr. Prestowitz’s newest book is “The World Turned Upside Down: China, America and the Struggle for Global Leadership,” published in January 2021.

Views expressed in this article are the opinions of the author and do not necessarily reflect the views of The Epoch Times.

Clyde Prestowitz
Clyde Prestowitz
Clyde Prestowitz is an Asia and globalization expert, a veteran U.S. trade negotiator, and presidential adviser. He was the leader of the first U.S. trade mission to China in 1982 and has served as an adviser to Presidents Reagan, George H.W. Bush, Clinton, and Obama. As counselor to the secretary of commerce in the Reagan administration, Prestowitz headed negotiations with Japan, South Korea, and China. His newest book is "The World Turned Upside Down: America, China, and the Struggle for Global Leadership," which was published in January 2021.