Free markets are creating a major free speech problem

Integration with China was supposed to spread our values; it's done the opposite

Former wrestler John Cena has apparently been learning Mandarin Chinese for years, which led to him giving a Chinese-language promotional interview to a Taiwanese television station for the forthcoming movie “Fast & Furious 9.”

Due to, I believe, the circumstances of the pandemic, F9 was released in certain East Asian markets weeks before its scheduled arrival in the United States. So doing the Taiwanese promotion was important, and Cena told TVBS that “Taiwan is the first country that can watch F9.”

It’s of course an important point of the delicate international situation that Taiwan is technically not a country but rather a part of China that happens to be governed by a totally different government than the government of the rest of China. And if, I dunno, the Secretary of State slipped up and referred to Taiwan as a “country,” you might well expect him to apologize and clarify that he’s not trying to start any wars. But when normal people are speaking, you know, it’s a country.

But not according to Cena, who ended up doing a groveling apology video.

I am not into hawkish foreign policy and I don’t want to see a new Cold War with China. I don’t want to see the military budget go up, and I really don’t want to see a resurgence of proxy wars in poor countries the way we had in the original Cold War. Indeed, I would even hope that despite the very serious differences in our political systems that the U.S. and Chinese governments can find ways to better collaborate in the future on problems like climate change and pandemic control that inherently have international aspects.

That being said, it seems really clear at this point that the original premise of U.S.-Chinese economic integration got one important point backward. Rather than trade and development allowing for some spread of American liberal norms into China, it is doing the reverse, and western multinationals’ commercial interests in China are inducing them to impose Chinese speech norms on the West. And we ought to try to do something about it.

Global integration — the God that failed

One of the last pieces of legislation that Bill Clinton signed during his term of office was a bill establishing Permanent Normal Trade Relations with China and paving the way for China’s integration into the World Trade Organization.

On a basic economic level, this gave American companies more confidence that China-based supply chains would endure for the longer term so they could make money by doing more business there. I think it’s fair to say that most policymakers at the time underestimated how big of a deal this would be in practice because American tariffs were already very low. Some of the people who were involved in negotiating the deal at a high level also tell me that they specifically worked to ensure that the next administration would have policy levers to slow the tide of Chinese imports if things proved too disruptive, but the Bush administration simply chose not to use them.

Either way though, in directional terms, the opening of normal trade to China achieved its main economic goals — Americans got a bunch of cheaper stuff from China, and American companies made money selling things to Chinese people.

But at the signing ceremony in October 2000, then-Speaker Dennis Hastert said the deal was about more than money: “you know what — we open it up so that we can exchange ideas and values and culture. And that's an important thing.”

Clinton laid out this argument at greater length during his remarks:

Of course, opening trade with China will not, in and of itself, lead China to make all the choices we believe it should. But clearly, the more China opens it markets, the more it unleashes the power of economic freedom, the more likely it will be to more fully liberate the human potential of its people. As tariffs fall, competition will rise, speeding the demise of huge state enterprises. Private firms will take their place, and reduce the role of government in people's daily lives. Open markets will accelerate the information revolution in China, giving more people more access to more sources of knowledge. That will strengthen those in China who fight for decent labor standards, a cleaner environment, human rights and the rule of law.

This idea that trade, development, and democratization would all move together was always controversial. But from what I can remember of the debates at the time, even the sharpest critics of trade with China underestimated exactly how wrong Clinton would be about this.

For starters, it proved much easier on a technical level to censor the internet than I think non-technical people realized 20 to 25 years ago. But what’s worse is that modern technology, especially since the growth of the smartphone industry, is basically a huge surveillance machine. In the west, that machine is basically used for targeted advertising, which can sometimes feel “creepy” but that I don’t think has a ton of real downsides. But in the People’s Republic of China, it’s been used to craft a more intrusive authoritarian state than the worst dictators of the 20th century could have dreamed of.

But here’s what’s worst of all: not only is the internet failing to smuggle free speech into China, Western companies’ desire to make money is smuggling unfree speech out of China.

There are no Chinese movie villains

International intrigue is a common cinematic plot device. There are lots of movies about spies and assassins and terrorists attacking the White House and all sorts of other things. One would expect that just in the ordinary course of such matters, someone would make a movie where the bad guy is an agent of the Chinese government. After all, I assume that in the real world, the U.S. and Chinese intelligence agencies tussle here and there doing whatever the boring real-world equivalent of cool movie spying is.

For a while, the general understanding about this was basically that the PRC would not let you show your movie in China if it made them mad, so film studios told the stewards of big tentpole films and franchises to not do stuff that would cut them off from the China market.

That’s kind of lame, but it also seems to fall within the scope of pretty normal business operations. But last year, Ben Smith reported that Apple’s formal guidelines for original Apple TV+ content include that you cannot portray China in a negative light:

Eddy Cue, Apple’s senior vice president for internet software and services, who has been at the company since 1989, has told partners that “the two things we will never do are hard-core nudity and China,” one creative figure who has worked with Apple told me. (BuzzFeed News first reported last year that Mr. Cue had instructed creators to “avoid portraying China in a poor light.”)

And Smith says that Disney+ has essentially the same policy:

So far, Apple TV+ is the only streaming studio to bluntly explain its corporate red lines to creators — though Disney, with its giant theme park business in China, shares Apple’s allergy to antagonizing China’s leader, Xi Jinping.

What’s disturbing about this is that while “you can’t sell this particular movie in China” certainly hurts that movie’s marketing prospects, it’s not like it’s impossible to make a profitable film or TV series without selling it to China. It’s one thing to say “look, we’re so invested in the James Bond franchise that we don’t want to lose any opportunities to market it.” It’s another thing entirely to say “we are categorically going to refuse to make anything that antagonizes the Chinese government.”

The implication is that Chinese pressure has stepped up. That they’re not just telling Disney that if they make a movie the PRC disapproves of then that movie won’t air in China, but that they will retaliate against Disney’s overall business interests. Of course on some level, we can’t really know what’s going on inside these companies or in their conversations with Chinese leaders. But some things that we can see are disturbing.

China is extending its reach

The incident that shocked me was when Houston Rockets General Manager Daryl Morey tweeted in solidarity with Hong Kong and turned the NBA upside down.

One striking thing about this, to me, is that Morey was writing in English on a platform that is illegal in China. Obviously, the Chinese government would get mad if American athletes tried to use their platform in China to communicate anti-regime messages to Chinese people. And while Americans don’t need to be happy about PRC efforts to curtail our communications with Chinese people, to an extent, that’s just life. But what got the NBA in hot water with China, and thus Morey in hot water with the NBA, was communicating in English to other Americans about China.

This has, in turn, provoked a big conservative hue and cry every time LeBron James or another NBA player speaks out about a social justice issue in the United States — “why won’t you speak up for the Uighurs?”

As a critique of James, I don’t think that makes sense. The reason NBA players don’t criticize China is that the owner of the Rockets, Tilman Fertitta, threw Morey under the bus when China retaliated for Morey’s tweet against Fertitta’s business interests. But as a critique of the NBA as an institution, it makes a lot of sense. Not in the lib-owning sense that they ought to shut up about domestic social justice issues, but in the sense that Uighur Lives Matter and it sucks that the NBA’s commercial interests in China have created a situation where league personnel cannot say things, in English, to other Americans, about human rights issues in China.

A lesser-noted but very telling incident occurred in 2018 when Mercedes-Benz quoted the Dalai Lama on its Instagram account only to be forced into a groveling apology.

What’s striking here, again, is that it’s not like Mercedes was smuggling anti-regime propaganda into China. All of Instagram is banned in China.

This again is to say that the PRC is not just censoring content in China. They are censoring content in the West. And it’s not clear what the limiting principle is.

This slope could keep slipping

Morey’s Tweets, the Mercedes Instagram account, and John Cena’s promotional interviews are kind of trivial.

But Disney doesn’t just make movies, they own ABC, and ABC has a news channel. NBC Universal puts out movies and wants access to the China market, but they also run MSNBC and NBC News. CNN is owned by the same conglomerate as HBO and the Discovery channel. So far, all these news stations still run critical reporting about China, and good for them.

Obviously, one reason it’s relatively easy to bring a sports league to heel on this sort of thing is that providing rigorous, objective information about the situation in Hong Kong is very far from the NBA’s core competency. I don’t think Mercedes should apologize for quoting the Dalai Lama, but it was also a kind of odd thing for them to do — it’s a luxury car brand. By contrast, news stations need to report the news and a lot of the news about China is not flattering. So they stand much stronger there. But for how long? These are for-profit business enterprises. China seems to be expanding the aggressiveness with which it pushes the envelope. And at the end of the day, the ability to show Marvel movies in China means a lot more to Disney’s bottom line than the editorial integrity of ABC News.

I also worry a lot about Apple in this regard. Privacy features on smartphones are very much at the core of Apple’s business. And as the New York Times has revealed in some brilliant reporting, Apple ultimately decided to completely sell out on this — with the selling out thus far limited to their Chinese customers.

But Apple has also become a significant player in media, not just with Apple TV+, but with podcasting and the Apple News app. And while Apple News is a pretty big deal in news, it’s just not that big of a deal to Apple.

John Gruber had a thoughtful post on the China/privacy issue that closed with the observation that it’s disingenuous to argue that Apple should have refused to comply without “acknowledging that Chinese iCloud users would not benefit in any way by Apple pulling out of the country.” And I do agree with that. But what I think we saw with the movie studios and the NBA is that the compromises ultimately don’t stop there. You start by saying “look, it’s not like refusing to comply with Chinese censorship would help the Chinese audience” and next thing you know you’re apologizing for stuff you said on Taiwanese television or tweeted in English or posted on Instagram. Gruber also notes that totally separate from sales to China, “the elephant in the room is Apple’s reliance on Chinese manufacturing,” which raises the question of whether Apple really could pull out of the China market without suffering crippling retaliation against its supply chain.

That strikes me as something of a mutually assured destruction situation where neither Tim Cook nor Xi Jinping really wants to find out what happens if China threatens to shut Apple’s manufacturing down.

My main point about this is just that if we know Apple is willing to compromise on the core privacy features of its core device business for the sake of its relationship with the PRC, we should be moderately skeptical that they will forever stand firm against pressure to muck with Apple News — just as we should be skeptical about the long-term integrity of news products whose owners already compromise free expression in their entertainment products.

Nothing is changing

There’s a feeling in D.C. that there’s a new, post-Trump China hawk consensus in town.

But I would note that as is often the case with bipartisan consensuses, this tends to reflect narrow interest group politics rather than a real sense of the national interest. The total failure of the post-9/11 counterinsurgency fad could be a big threat to the defense sector’s desire to earn gobs of revenue, and the new China hawk consensus solves that problem. From here on out, any military agency that wants money just needs to talk about the China threat rather than the terrorism threat and the gates are open.

China has also become a useful bugbear in trade politics. A lot of Trump’s protectionist measures had an anti-China focus, and Biden has basically kept them all in place.

People with short memories often see this as Biden adopting Trump’s view, but I think it’s more accurate to say that Trump adopted the longstanding view of congressional Democrats, most of whom voted against NAFTA, against PNTR with China, and against the Trans-Pacific Partnership. But critically, protectionist politics are not genuinely anti-Chinese. The TPP was supposed to be, among other things, a U.S.-centric trade bloc that deliberately excluded China. And Trump put tariffs on certain exports from Taiwan, which is the opposite of getting tough on China. Biden has kept those tariffs in place, though, because they are general protectionist politics and have nothing to do with China.

That’s all great if you’re trying to sell military equipment or you own a steel plant and want to charge higher prices. But Cena’s climbdown shows that the rash of stories from 2019 where luxury brands apologized for selling a t-shirt that listed Taiwan as a separate country from China haven’t actually changed anything. When the video game company Activision Blizzard punished a pro player for speaking out on behalf of Hong Kong, they were roundly condemned, but nothing actually happened.

Rather than fixing the 2019-era issues, China seems to have successfully entrenched a new norm where multinational corporations and most celebrities know to preemptively self-censor. These apology stories are a bad look for everyone, so it’s just overall better to know to steer clear of offending China — if you do that, then you never need to apologize, and you don’t take the crap in the U.S. for having done so.

Normal citizens should worry

I normally agree with Richard Hanania about foreign policy issues. But when Josh Hawley sent out a press release about Cena, Hanania characterized it as a topic that “affects basically nobody in America except rich athletes and entertainers wanting access to a large market so they can be even more rich and famous.”

To me, the problem here is characterizing this as a purely optional thing on the part of entertainers.

Could Cena have really said no to the demand to apologize, or would he have found himself permanently blacklisted? One big problem here is that many of the key actors are just publicly traded companies. Comcast — in the conventional American understanding — has an obligation to maximize profits, which means not letting Universal Pictures take moral stands that cost its movies the Chinese market, which means not hiring actors who take moral stands. And all the other movie studios are in the same boat.

Two things follow from that. One is that just because you’re a rich actor who could easily get by with less money doesn’t mean the option to make a bit less money and retain your principles is actually on the table. The real choice may be to give up your entire livelihood.

The other thing is that, of course, lots of people who currently or aspirationally work in the movie business aren’t famous. So far, we don’t know about China monitoring the Twitter feeds of obscure actors and complaining about random things they’ve said. But nothing is stopping them from doing that. And this, after all, is the big miscalculation we made about globalization, information technology, and authoritarianism. Digital technology makes it easier than ever to monitor what people are saying.

Today, Mercedes apologizes for quoting the Dalai Lama in an Instagram post. But suppose the person who made that post put it up on her personal Instagram account. Would China complain to Mercedes about that? Smith caught Apple with a formal policy of no China content on Apple TV+, but while I assume Apple doesn’t have a formal rule against an Apple executive saying “ethnic cleansing in Xinjiang is bad,” clearly none of them will or would say it. So how far down the line does that go? The nature of chilling effects is that you don’t want to find out. Probably the manager of the Apple Store in San Antonio could post a “Taiwan is a country” meme on Instagram without fear of anything bad happening. But do you want to risk that?

High-level executives, famous actors, and rich athletes are the most likely to be noticed and get in trouble. But the things that happen to famous and privileged people send a signal to the rest of society, and I think Hawley is basically correct to see this as a troubling trend. But it needs a solution.

Polarization will end us

My problem with Hawley’s release is that instead of talking about some kind of idea to break the collective action problem that has led Hollywood to this point, his statement says “Joe Biden, ‘The Squad,’ and the rest of the Democrat Party has made a point to bow down to the Chinese Communist Party at every turn.”

This is simply false.

Here on April 6, 2020, for example, Ilhan Omar led a congressional letter to American CEOs demanding that they do more to separate themselves from the use of forced labor in China. Her co-signatories include Reps. Rashida Tlaib, James McGovern, Andy Levin, Jan Schakowsky, and Jamie Raskin — all Democrats. Legislation aiming to impose U.S. sanctions on top Chinese officials associated with human rights abuses against Uighurs passed the House 431-1 later that spring over mild objections from the Trump administration.

The problem we are having with China is not that Democrats are bad or that Republicans are bad, but that the kind of measures Congress has been willing to contemplate have very low efficacy. Beyond that, it is moderately challenging to think of policy measures that have high efficacy and acceptable costs.

To get there, legislators are going to need to try to actually address the issue and not just use it to lob tomatoes at each other or call various people hypocrites. The fact is that all the bad stuff that’s happening with regard to China and speech flows very naturally from the basic logic of capitalism. If you let factories dump toxic waste into the water to save money, then companies that do that will gain market share, and managers who refuse to do it will be booted by activist shareholders. Disney and Apple and Comcast and Mercedes and Versace and Activision are all doing what they are supposed to do given the current trade and regulatory policies, and the situation will keep getting worse unless the policies change.

So what should we do? A boring but earnest place to start would be with some good old-fashioned congressional hearings. What guarantees can executives give us that the compromises they’ve made on entertainment products won’t extend to the news? And what guarantees about entertainment have they given to the Chinese government? I think ultimately, members of Congress should make the point that the downside of television news coming under the control of Chinese censors for the American people is extremely large, while the upside of U.S.-based conglomerates gaining access to the lucrative Chinese box office is modest. So even if the censorship risk is low, the cost-benefit isn’t there, and unless the companies can offer very clear guarantees, we should look at passing laws that would break up these conglomerates.

Of course, a single round of hearings isn’t going to fix things here. But defining problems is an important part of solving them. And that, to me, starts with a bipartisan acknowledgment that something has gone awry here. And that what has gone awry does not reflect individual weakness of will but the unintended consequences of a bipartisan change in China policy that happened over 20 years ago.