China is Flexing it's Market Power to Combat Free Speech, and it's Working.
- Oct 10, 2019
- 7 min read
Some of you may have come across the rumblings of controversy with a gaming company called Blizzard recently. For those of you not in the realm of video gaming, Blizzard is a company that has been well loved and respected for decades, and at least originally was an American company. They developed world known classics like Diablo, World of Warcraft, Starcraft, Hearthstone, and more recently, Overwatch. Even being an American born company, their games have had a sizeable impact in Asian markets over the years, especially for competitive games like Starcraft, DOTA, and Hearthstone. And more recently it has become aware that they are pushing further into that market, with a bit of controversy over their recent Diablo game being completely cell phone based, something that is much more popular in the Chinese market vs Western ones.
But, that was a small bit of controversy compared to the recent explosion of shit that Blizzard just put on their feet. A few days ago, a Hearthstone professional player named Chung Ng Wai went on a live stream and basically expressed his support for the Hong Kong protests. The streamers/interviewers were cognizant enough to know shit was going to go down and hid their faces literally under their desks while he did it. Blizzard of course came back with a measured and reasonable response:
They banned Chung Ng Wai for a year, forced him to give up thousands of dollars in prize money, and fired the two commentators who’s sole problem was being at the wrong place at the wrong time.
If you’re not into these type of things, it all may seem a bit silly and inconsequential to you, but be aware that the video game industry is worth many billions of dollars, and increasing at nearly double digits per year as more of the world is joining the information age of digital media and mobile gaming, especially China as their economy has been improving. And that improving economic value of a country with over 1.3 billion people is having more and more of an affect on global social policy, as demonstrated by Blizzard.
For those who glaze over numbers when the million and billions come out, think about the entire population of the United States, Canada, South America, Australia, New Zealand, and all of Western Europe, combined. That's about China level population. Approximately 1 in 5 of the world population is Chinese.
That amount of people in one country isn't necessarily the problem in it of itself. The problem arises when the country is a dictatorship and censors any free speech critiques of itself. The Chinese government has complete control over what their citizens can access through their media. If the government decides it, they can basically ban all of Blizzards’ games across the country, at any time, cutting them out from a market of millions of people that's constantly growing. This is the problem when companies like Blizzard start trying to deal with the Chinese market.
China may be capitalistic in its market, but its citizens enjoy far fewer rights that we regularly take for granted. Free speech is not allowed on many topics, they have a completely censored internet compared to the rest of the world with many sites, shows, games, and other media being completely unavailable to Chinese citizens. Anything that is critical of the government is immediately banned from the internet and the markets. People can be arrested in China with little to no due process if they are critical of the government, they can be threatened with heavier sentences if they request a lawyer, and they can be not informed of how long or where they will be imprisoned for. This is the majority of what Hong Kong, a city that has been largely free of these Chinese policies since the 1800’s, is now being threatened with.
So, it may seem like a stupid decision and a completely gross over-reacting by Blizzard to ban the player for a year and the casters present during the interview, but from a strictly business perspective it was most likely seen as the least bad scenario for them internally. They knew they’d take a PR hit in western culture (maybe they didn’t realize the extent of the PR hit it would be), but they also knew they couldn't risk being cut out of the Chinese market entirely. Blizzard, and its parent company Activision, is a multi-billion dollar company with shareholders and stocks to answer to. It’s a choice that’s already made for them, especially when 5% of their company is owned by Tencent, a Chinese conglomerate that’s closely tied with the government of China (any large million or billion dollar Chinese company has to be.) It's basically China’s Google, they’re huge and involved with everything, including many American companies like Blizzard and many other popular games.
Of course, this problem isn’t just something Blizzard faces. Already, we’ve seen the NBA have to deal with some hot water with China after Houston Rockets General Manager Daryl Morey sent out a tweet in support of Hong Kong. China’s reaction was immediate and swift, banning all cooperation with the team, and the Chinese state broadcast network and Tencent Sports (there’s that company again) announced they would suspend live streaming and any news about any NBA games. That's about 500 million to a billion people who were watching NBA games in China who now won't be, over one managers tweet.
NBA issued a lukewarm apology to China over the controversy, which was met with ridicule in the states. In the NBA's defense, they then came down hard on China afterwards and said :
"The NBA will not put itself in a position of regulating what players, employees and team owners say or will not say," Silver said in the statement. "We simply could not operate that way."
So they eventually came around to the right way of thinking after being shamed by the West. But unlike Blizzard, they aren't partially owned by Chinese companies and they did the math and can probably take the hit with Chinese markets more so than they can with Western ones. The numbers work for them, unlike Blizzard who is primed to shift their focus to more of the behemoth that is the Chinese gaming market even more so in the coming years.
Apple and Google have also had to deal with the Hong Kong protest, by both pulling a popular Hong Kong protest app from their web stores after being pressured by China:
South Park, seemingly omniscient of the controversy brewing, released an episode last week titled "Band in China". The episode is extremely critical of the Chinese government and the global media corporations who bow to their whims. And, as the cleverly named title predicted, the show was nearly immediately banned across all platforms in China.
But these overt controversies aren’t even the whole story. Movies and TV are and have been affected for years now, with many large blockbuster movies extremely careful to not incite the ire of the Chiense government, for fear of getting that ban hammer and being cut off from a huge international revenue stream, which is predicted to be the largest movie market in the world in the coming years.
Disney in particular, which owns basically everything at this point, is very careful to keep that revenue stream open. Earlier this year, the live action Mulan actress came out in support of the Chinese government and was met with some ridicule in the west.
However, certainly not enough for Disney to care. If it went the other way however? If that actress came out in support of Hong Kong and the Chinese government threatened to ban Mulan as a response? A movie that has been hand crafted for the Chinese market? We would be having a very different conversation, I’m sure.
This is just touching the surface of where we are headed as the Chinese market grows further and continues expanding their social norms. With how entwined many of our companies are with global markets, it colors all of our social media and can affect everything when a country that has a huge stake in markets and corporations can threaten to ban access if anyone or anything critiques it. Beyond what an actress or actor says off the set of a movie, studios who are looking to global markets for large releases are most assuredly carefully curating their scripts and content to make sure there is no critique of the Chinese government in them.
This issue can have an affect far beyond this, even. As more companies swell and more mergers happen, we can see more of these issues emerge. Huge tech companies like Google and Facebook already bow to the pressures of Chinese markets in many ways, as I mentioned earlier. We still enjoy freedom of speech in our country but what about in the future when these companies have higher stakes in the Chinese market? What if the government of China decides to ban Google or Facebook from the country if they decide to allow ANY anti Chinese government media on any of their sites in any country? (Youtube, Reddit, Google Search, Instagram, Snapchat, etc). They may be able to weather that impact now, but what about ten, twenty years from now? Will these companies, who are so large in the US they have basically become utilities, begin censoring free speech under the guise of the almighty dollar?
What about large private power corporations that run the US power grid or other infrastructure? If these corporations start dealing with more of the Chinese market share, they may also become beholden to the whims of the Chinese government. With how corporations are set up to ultimately appease shareholders they may not even have a choice in the matter if the numbers don’t work.
Google used to have a slogan that said,
“Do no evil.”
It has been removed after a few years, as they have probably realized that a global multi billion dollar corporation that has to constantly be profiting and having growth and shareholders can’t also be a force of good. There’s something wrong with that structure and we’re seeing the cracks to our democracy on the global stage as China flexes its market might. But hey, free market capitalism is the ruler of all. This is what free market gets us. A slow but consistent push towards whoever the market leader is. In this case, it's a dictatorship.
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