With its global economic might, Beijing is pressing foreign corporations to go along with its vision for Hong Kong, and many executives and union leaders have paid a price for supporting the pro-democracy movement

Nathan VanderKlippe } Asia correspondent
Hong Kong
Published August 26, 2019

As unrest in this Asian financial centre reaches from the streets and into boardrooms, the message from Beijing has become increasingly clear: Respect Chinese dictates or prepare for the consequences.

Over the past two weeks, executives, pilots and union leaders have lost jobs over shows of support for pro-democracy demonstrators, whose protests have continued for more than two months.

The global accounting firms that employ thousands in the city – and thousands more in mainland China – have publicly condemned the demands of some demonstrators.

Managers at financial companies have ordered employees to stay away from protests.

The corporate convulsions come as Chinese authorities adopt a strategy of increasingly harsh consequences, both for protesters now being cleared from the streets with powerful new weapons, such as water cannons, and for companies seen as sympathetic to a protest movement whose actions Beijing has likened to terrorism.

And Chinese leadership hopes the fear it has created in Hong Kong will be felt elsewhere, too, as it wields the power of the world’s second-largest economy to enforce its will far outside its borders.

“Foreign companies should understand that it’s impossible for them to profit from business with a country if they don’t even have the slightest respect for this country,” said Mei Xinyu, an economist at the Chinese Academy of International Trade and Economic Cooperation, a think tank under the Ministry of Commerce.

His counsel to overseas corporations: Bar any expression that Beijing finds objectionable.

“If I was a foreigner with a company that does business with China, I would right away warn my employees from participating in related activities or talking about it,” he said, referring to support for protests in Hong Kong.

“I don’t think it’s possible for a company to let its staff speak rudely about a country and also have good economic performance in the Chinese market.”

Chinese leaders have for many years employed softer-handed efforts to breed loyalty in Hong Kong since the 1997 handover from Britain, promising a windfall from greater economic integration with the mainland and using Beijing-friendly media to emphasize China’s benevolence.

But such efforts have struggled. Surveys in Hong Kong find a long-term decline in those who identify as Chinese, while resentment toward Beijing rises. The current protests, which have now continued for more than 70 days, have drawn motivation from that feeling of ill will. Hong Kong in recent days has been decorated with graffiti comparing the Communist Party to the Third Reich.

Unable to halt the protests, Beijing is turning to harder methods to gain compliance among businesses in Hong Kong. Chinese pressure has led to the resignation of the chief executive of Cathay Pacific Airways and the removal of two pilots, as well as the chair of the Hong Kong Dragon Airlines Flight Attendants’ Association and several others, after employees at the airline publicly supported protests. Fashion and luxury brands – Versace, Coach, Givenchy, Swarovski and Calvin Klein among them – have issued apologies for products and websites that implied Hong Kong is independent.

Big accountancies have publicly distanced themselves from protesters, including among their own employees, with PricewaterhouseCoopers last week saying in a statement it firmly opposes “any action and statement that challenge national sovereignty.” Local banks and securities companies who rely on China for business have ordered their employees not to attend protests.

Leaders in Hong Kong have little sympathy for companies unwilling to do as Beijing says.

”If you are doing business in China, you have to comply,” Bernard Chan, a top adviser to Chief Executive Carrie Lam, said in a recent interview. Some companies may have been “too relaxed about it,” he said. Now, they “need to think more closely.”

Any company – be it an airline or a factory – should be wary, said He Weiwen, a former Chinese diplomat who sits on the executive council of the China Society of WTO Studies and is a senior fellow at the Center for China and Globalization.

He cautioned against “concluding that China is trying to impose its control everywhere.” But, he said, what happened at Cathay Pacific is a “warning, a reiteration of our stance.”

“If a company wants to do business with China, even if it only opens a single branch office in a Chinese city, it needs to take into consideration our country’s reality, no matter where their headquarters is located,” he said. To those unwilling to comply, “you are free not to come,” he said.

But if such a policy has long-standing roots in Beijing, it has been put to more strict effect as China’s leadership seeks to exert control in the midst of unrest in Hong Kong.

Cathay Pacific is ”just the beginning, a starting point, that the Communist Party of China plans to open fire on companies that have ‘incorrect’ political preferences,” said Qin Yongpei, a human-rights lawyer in southern China. His friend, lawyer Chen Qiushi, was last week summoned back to Beijing and interrogated by security services after posting about the protests to Chinese social media.

“If you don’t show your loyalty and obedience on key issues you will be punished and retaliated,” Mr. Qin said.

The Canadian corporate sector has largely kept silent on the risks, nervous about being caught up in political matters that could be bad for business. The Canadian Chamber of Commerce in Hong Kong declined comment.

But there is little doubt that the atmosphere of fear extends to Canada. In Vancouver, a person who joined a demonstration to support Hong Kong subsequently received threatening messages from someone with a Chinese name. “I know where u live,” said one, according to a screen capture viewed by The Globe and Mail.

Some Canadians in Hong Kong, meanwhile, have stayed clear of protests to avoid professional consequences. “I need to be able to continue to keep working with both Hong Kong and Chinese companies,” said a Canadian banker, whose identity The Globe is keeping confidential because they were concerned about retribution. “The best interests of the firm are in not getting involved.”

Christine Chiu, who works for one of the big four accountancy firms in the city, had to promise superiors that she would not encourage participation among people in her team, and has been told not to take any photos at protests. On Saturday, she joined a march in sweltering heat wearing a baseball cap, sunglasses, face mask and bandana. If a photo of her at the protest were to circulate, she puts the odds of losing her job at “50-50.”

“Have said that, this is the last chance for Hong Kong people to fight for freedom and democracy,” she said. “I’m open to being fired.”

Canto-pop star Denise Ho has already been fired, in a way, by Beijing, which has barred her from performing in mainland China because of her pro-democracy activism. But, she said, corporations should not see the current protests as risky. Instead, she argued that demonstrators and executives have common cause. There has been a “mentality that you need the Chinese market to survive – and you need that door into this Communist country where you have to silence yourself in order to get these benefits,” she said.

Those on the streets are, in loud fashion, pushing back.

“Hong Kong is actually at the front lines of this very global fight,” she said.