U.S. firms with a presence in China may soon be forced to change how they operate and employees could be asked to restrict how they use personal social media, according to one analyst.
China flexed its economic might against the U.S. National Basketball Association (NBA) on Tuesday by suspending broadcast arrangements after the Houston Rockets general manager tweeted support for anti-government protests in Hong Kong.
Beijing’s power over international companies was also highlighted back in August when Cathay Pacific CEO Rupert Hogg stepped down after one of the airline’s pilots was found to have taken part in the protests.
With this latest swipe back at corporate business, China has underlined how sensitive it is to criticism and reinforced the strict rules it wants to be followed by overseas firms wanting to earn money in the country.
Speaking to CNBC’S Street Signs Tuesday, James Pethokoukis, an economic policy analyst at the American Enterprise Institute, said U.S. firms in China would face increasingly difficult choices.
“Perhaps in how employees use social media but more importantly about how to do business in China,” he said, before adding that a cultural boycott by overseas entertainment, similar to what was seen in South Africa in the 1980s, was also a possible outcome.
“I can easily see how there will be increasing pressure on the NBA or Hollywood to limit or change how it does business in China,” said Pethokoukis.
“Perhaps no more red carpet or premieres in Shanghai as long as there are crackdowns in Hong Kong and internment of Uighurs in western China,” he added….[ ]