- Nike canceled the launch of a new line of shoes in China after the Japanese designer of the line posted on Instagram supporting protests in Hong Kong against a proposed extradition bill.
- The incident sheds light on the dilemma multinational companies face between needing to comply with China’s demands to sell to Chinese markets, but also not wanting to be perceived negatively by more liberal countries.
- Last year, Mercedes-Benz and the Gap both faced similar experiences, prompting them to apologize to Chinese consumers.
Undercover x Nike Collaboration
Nike pulled the sale of a new line of shoes in China after the Japanese designer of the line publically supported the protests in Hong Kong on social media, the Financial Times reported Wednesday.
Nike and the Japanese brand Undercover, lead by the designer Jun Takahashi, intended on releasing the limited shoe line this month.
However, the product was withdrawn entirely after Undercover posted a photo on it’s Instagram of posters in Hong Kong fighting against a proposed extradition bill.
The post included the text “no extradition to China.”
Undercover later deleted the post after receiving backlash from Chinese Instagram users, who use VPNs to access Instagram, which is blocked in China. After deleting the post, Undercover reportedly said it said was an “individual opinion” that had been posted by mistake.
YYSports, Nike’s retail partner in China and one of the country’s largest retailers, said they were given “urgent notice” from Nike to stop the launch of the new line. Other Chinese retailers also removed the shoes from sale without explanation.
One online vendor said it withdrew all Undercover brand products because of “special reasons,” but did not give details.
China and Multinational Retailers
A person described as being “close to” Nike told the Financial Times that the event with Undercover probably will not hurt Nike’s sales or revenues in China, as the situation was dealt with quickly and the shoes were designed as a limited-edition collector’s item rather than a mass-marketed product.
Additionally, while the line did not launch in China, it did launch globally on June 21.
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#NIKE x #UNDERCOVER Daybreak sneakers in Black and Green will be released on June 21th (Fri) globally. NOTE: Purchasing at UNDERCOVER Aoyama is only possible through an advance online lottery. Application period is between June 18th (Tue) 12:00 ~ 20:00. Please check the UNDERCOVER website for details (undercoverism.com/projects) NIKE x UNDERCOVER Daybreak を6月21日（金）より販売いたします。 国内Daybreak販売店舗：UNDERCOVER 青山、新宿伊勢丹MENS、阪急MENS東京、GINZA SIX, 阪急MENS大阪、阪急うめだ本館、LUCUA1100、岩田屋本店、仙台、金沢、名古屋、京都店及び、NIKE SNKERS、NIKELAB MA5、DSM GINZA UNDERCOVER 青山店での購入については、事前にオンライン入場抽選を実施しますので、発売日に店頭にて購入をご希望の方は、アンダーカバーのウェブサイトundercoverism.com/projects（携帯からはBioにあるリンクより）にて詳細をご確認のうえ、抽選応募フォームよりご応募ください。ご応募受付期間 : 2019年6月18日(火) 12:00 ～ 20:00 #アンダーカバー #ナイキ
Regardless, the incident shines a light on the double-edged sword that is selling retail products to Chinese markets.
On one hand, China is a huge market and brings in a ton of revenue for multinational retailers like Nike. In Fiscal Year 2018, Nike reported more than $5.1 billion in revenue from greater China alone.
On the other hand, if Nike adjusts to the political needs of China, it risks being perceived by more liberal countries as bending to China’s authoritarian requests. This is especially difficult for Nike, which markets itself as an advocate for social causes.
However, it is not only Nike that has had these issues with selling products in China.
Last year, Mercedes-Benz apologized to Chinese consumers after they posted on their official Instagram account and used a quote from the Dalai Lama, who the Chinese government believes is a dangerous separatist.
Gap also apologized to Chinese consumers last year after a post on a Chinese social media site showed T-shirts with a map of China that did not include Taiwan, South Tibet, and the South China Sea, all of which China considers as territories that belong to them, but are disputed.
Protests in Hong Kong
Meanwhile, the protests over the proposed extradition bill in Hong Kong have continued intermittently for the last few weeks.
The bill would let the government detain people accused of committing certain crimes and send them to countries or territories that Hong Kong does not have extradition agreements with, including mainland China.
The people of Hong Kong oppose the bill because they are concerned China could use the law to target political activists and dissidents who are critical of the Chinese government.
On June 15, Hong Kong’s chief executive Carrie Lam said she would suspend the bill indefinitely, but not fully withdraw it. The next day, the people of Hong Kong staged an even bigger protest with an estimated 2 million people in attendance.
Since then, the people have still continued to demonstrate, taking to the streets, surrounding and entering government buildings.
On Tuesday, hundreds of people demonstrated at foreign governments’ consulates in Hong Kong, to call on foreign leaders to address their concerns at the upcoming G20 summit in Japan.
See what others are saying: (The Financial Times) (Business Insider) (CNBC)
China Cautiously Crawls Out of Zero COVID Policy
Estimates put the number of people who will die if China fully reopens between 1.3 and 2 million, but higher vaccination rates could limit the death toll.
People Go Back to Bars
The Chinese government has begun to ease some of its notoriously strict pandemic lockdown measures, signaling that the end of the “zero-COVID” policy may be on the horizon.
On Monday, commuters in Beijing and at least 16 other cities were allowed to board buses and subways without a virus test in the previous 48 hours for the first time in months.
In Shanghai, visitors to most sites will require a negative test within the last week, rather than the last two days, though schools, hospitals, and bars will require one within the past 48 hours.
Dining in restaurants in some parts of Beijing is still prohibited, but bars and restaurants in many areas of the country are reopening.
In Urumqi, where anti-lockdown protests erupted late last month after an apartment fire killed 10 people, authorities said in a statement Monday that malls, markets, and other venues will reopen.
Zhengzhou, the central city home to the world’s largest iPhone plant which was last month rocked by violent unrest, will no longer require COVID test results for public transport, taxis, and visits to “public areas”, authorities said in a Sunday statement.
Beijing authorities had required registration to purchase fever, cough, and soar throat medicine, which they believed people were using to hide their coronavirus infections, but that mandate has been lifted. Certain districts in the capital also announced that some residents may self-isolate inside their homes rather than being forced to quarantine in a centralized facility.
Is China Ready to Reopen?
Vice Premier Sun Chunlan, who oversees COVID efforts, said last week that the country’s health system had withstood the test of the virus and that the omicron subvariant is less deadly than previous strains.
But there has not been a significant drop in cases recently to prompt the easing of restrictions. On Monday, the government reported 30,014 new cases, down from last week’s peak of over 40,000 but still near record highs for China.
Some observers speculate that the government’s move was related to the recent protests, in which thousands of people poured onto the streets of several major cities to demand freedom and an end to the zero-COVID policy. Authorities cracked down on demonstrators, and any mention of the protests was rigorously censored on Chinese social media.
There was no sign of any significant unrest this weekend.
Although many people are excited to enjoy less restricted lives and restart a shuddered economy, others are concerned about the public health consequences reopening society could incur. Estimates put the number of people who will die from the coronavirus if China fully reopens between 1.3 and 2 million, but higher vaccination rates could limit the death toll.
Last week, the government launched a campaign to vaccinate the elderly population.
Only about 40% of people over the age of 80 have gotten their booster shot, according to official statistics.
Health experts and economists say vaccination rates and ICU preparedness won’t be sufficient to fully end the zero-COVID policy until mid-2023 or 2024.
See what others are saying: (BBC) (Associated Press) (Reuters)
India Pedestrian Bridge Collapsed 4 Days After Renovations, Killing Over 100 People
The company responsible for the upkeep of the Morbi bridge did not obtain a safety certificate before re-opening.
After seven months of renovations, the Morbi walking bridge in India opened to the public. Four days later, the bridge collapsed, killing more than 130 people.
According to the local government, there were about 200 people on the bridge when it collapsed on Sunday, despite its capacity of 125.
During a campaign event on Monday, India’s Prime Minister Narendra Modi said the state government had set up a committee to investigate the tragedy.
“I assure the people of the country that there will be nothing lacking in the relief and rescue efforts,” he stated.
Along with the investigation, the state has launched a criminal complaint against Oreva Group, the company responsible for maintaining the bridge. Oreva Group reopened the bridge after renovations without getting a safety certificate from the government.
In response, Oreva Group spoke to a local news outlet and blamed those on the bridge for its collapse.
“While we are waiting for more information, prima facie, the bridge collapsed as too many people in the mid-section of the bridge were trying to sway it from one way to the other,” the group claimed.
The state government has offered compensation for the families of the deceased, but that is not enough for some. One father whose wife and two children died in the collapse told VICE he wants answers and accountability.
“Why were so many people given tickets? Who allowed them? Who is answerable?” he asked.
Indian police have arrested nine people including ticketing clerks and security guards for failing to regulate the crowd, according to Reuters.
Xi Jinping Tightens Grip on China by Eliminating Rivals
Despite the staggering power grab, Xi faces geopolitical competition from abroad as well as social and economic instability at home.
Xi Surrounds Himself With Allies
Chinese President Xi Jinping shook up politics over the weekend when he revealed the government’s new leadership, almost exclusively composed of his own hardline loyalists.
Six men — Li Qiang, Zhao Leji, Wang Huning, Cai Qi, Ding Xuexiang, and Li Xi — will form the Politburo Standing Committee, China’s top ruling body.
The four new members are all Xi loyalists, pushing out Premier Li Keqiang and the head of China’s top advisory body Wang Yang, two key party figures outside Xi’s inner circle who retired despite being eligible to serve another term.
For the first time in a quarter-century, China’s 24-member Politburo will be made up entirely of men, underlining the exclusion of women from Chinese politics.
An official account of the selection process said that a top criterion for leadership was loyalty to Xi, and rising officials must stay in lockstep with him “in thinking, politics and action.”
Topping off the developments, Xi officially secured an unprecedented third term as leader, something that was only made possible in 2018 when the government abolished term limits on the presidency. The weekend marked China’s greatest consolidation of political power in a single figure in decades.
As the 20th Communist Party Congress came to a close Saturday, China’s former leader Hu Jintao appeared reluctant as he was suddenly and inexplicably escorted from his seat next to Xi out of the Great Hall of the People.
Some commentators have argued that a tightly knit band of yes men may help Xi fend off internal party dissent, but it could ultimately result in poor governance as his subordinates fear giving him bad news.
The Arc of History Bends Toward China
Despite the extreme concentration of political power, China’s Communist Party stares down a gauntlet of challenges both foreign and domestic.
Beijing remains locked in a strategic competition with Washington, which has sought to contain the East Asian rival’s rise as a global superpower, but the past week’s congress may portend a stubbornly defiant China for years to come.
Xi is expected to use his firmly secure position within the party to pursue his agenda in full force — by strengthening Beijing’s claim over Taiwan, expanding China’s economic foothold in developing countries, and achieving self-sufficiency in strategic technologies such as semiconductors.
At home, China’s economy has faltered during the pandemic, with high unemployment, low consumption, and slow economic growth putting pressure on a government that stakes much of its legitimacy on promises to deliver prosperity to the population. Between July and September, the country’s GDP grew by 3.9%, according to official data released Monday, which is above many analysts’ expectations but still far below the state’s target of around 5.5%.
China’s National Bureau of Statistics postponed the data’s publication last week ahead of the 20th party congress, reinforcing concerns that Xi’s leadership will put politics before economics.
Monday’s announcement roiled stock markets, with Hong Kong’s Hang Seng Index plunging 6%, as well as the Shanghai Composite and the Shenzhen Composite Index both falling by about 2%.
Beijing has also seen increased political resistance from the population, from anti-lockdown protests in Shanghai to widespread mortgage boycotts over delays from real estate developers.
Last week, a man unfurled two large banners from an overpass in Beijing and called President Xi a “dictator” through a megaphone.
Such small-scale demonstrations are not new, but they took place in the capital just before the congress drew enough attention for photos of the stunt to go viral on social media, where an equally swift censorship campaign stamped out any mention of it.