This is Shaq
on The Great Wall of China.
Here’s Michael Jordan,
There are a lot of these.
For years, the NBA has been sending teams to China
where more people watch NBA games than in the United States.
The purpose is to play basketball,
meet Chinese fans,
and have players like Rip Hamilton spread a clear message.
The NBA has worked hard
to build a successful business in China,
but then they almost lost it all because of a single tweet.
It was March of 2000 and President Clinton was pushing for a trade deal with China,
despite concerns about China’s human rights record.
“It does deny its citizens fundamental rights of free speech and religious expression.
It does define its interest in the world in sometimes in ways that are dramatically at odds from our own.
Just a decade before, China’s government put down an uprising at Tiananmen Square.
“...human rights not trade!”
And in 1999, Americans also had concerns about China’s record in Taiwan and Tibet.
“The Fortune 500 companies are controlling the American foreign policy in China.
This is wrong.
It’s gotta stop.
President Clinton, we are asking you to take a courageous position.”
But Clinton insisted that
doing business with China would have a positive impact on their human rights platform.
"The question is not whether we approve or disapprove of China's practices.
The question is: What is the smartest thing to do to improve these practices?"
Bill Clinton came to think that engagement, that trade, that direct contact would have
a positive impact on the human rights situation in China, as well as improving
the overall U.S. China relationship.
The next year, China joined the WTO.
2001 is important because that's when the country enters into the World Trade Organization,
which greatly simplifies doing business, not just with the United States, but with the entire world.
The Chinese economy was about to take off.
US businesses began investing in China
and eventually Chinese companies would start investing back in the US.
As China became richer, as China became more integrated into the global economy,
it became a more important market for the United States.
After 2001, the average Chinese person had more disposable income
as a result of the rapid growth.
It was the perfect moment for the NBA to build a business in China and it all started right here.
“With the first pick in the 2002 NBA Draft, the Houston Rockets select Yao Ming from Shanghai, China!”
At the time Yao Ming was 21-years old, watching the NBA draft on a laptop in China.
“Can you fully comprehend, for yourself, for Chinese Basketball, and for the NBA,
what it means to be the NBA’s number one overall pick?”
Yao was the NBA’s “next big thing” for fans in China,
where basketball has been popular ever since it was introduced by missionaries in the 19th century.
When the Communist Party came to power they banned most Western sports,
but basketball was embraced as a national passion.
But China never produced a star player...
until Yao.
"...Yao Ming and company, ready to go..."
Now they could watch a Chinese player playing at the same level of these legendary greats
and playing Shaq
200 million Chinese viewers tuned in for his first game against Shaq and The Lakers.
“They’re watching live in Shanghai at 10:30 in the morning as O’Neal goes right at Ming!"
Compare that to 9.9 million: the average number of Americans that watched the NBA Finals that year.
“Yao, first touch, for two!”
Yao became a household name in China and soon American companies turned to him for endorsements.
“Can Jimmy play?
Hi Yao!
Jimmy?”
“Get a Garmin”
“...the new 17-inch powerbook.”
Yao’s popularity also helped the NBA develop their fanbase there.
In 2004 The NBA started sending teams on an annual summer tour of China,
where the Houston Rockets became a fan favorite, simply because that was Yao’s team.
The tours brought the biggest NBA players to China and boosted the league’s popularity.
For comparison, The NBA has slightly more Twitter followers
than the the next major sports league in The United States.
But in China, the NBA dominates social media platforms like Weibo.
Nearly 500 million people watched NBA games last year using Tencent, China’s largest
streaming platform.
That’s more than the entire population of the United States.
In 2019 Tencent and The NBA signed a deal worth $1.5 billion dollars,
almost three times what it was worth five years ago.
The people who manage the NBA recognized that there were tremendous opportunities in China
and they worked hard to develop that market and they have succeeded.
Then seven words threatened everything.
Daryl Morey is the general manager of the Houston Rockets
and his tweet repeated a phrase chanted by protesters in Hong Kong.
Well this is just about civil liberties, this is about having a voice in government.
What's wrong with that?
And so he thought nothing of tweeting this out, whereas in China, it was perceived quite differently.
It was seen as an effort to break up China, an effort to weaken China.
The Chinese Consulate in Houston responded by saying they were “deeply shocked
by the erroneous comments on Hong Kong” and asked the Rockets to “correct the error”.
Daryl Morey took down his tweet and
The Rockets tried to do damage control.
“Yeah, We apologize, you know, we love China.
We love playing there.”
Despite the apology, the government cancelled NBA broadcasts on Chinese state TV.
“CCTV’s sports channel has just announced that it will suspend the broadcast of any
NBA games in China, including this week’s preseason games.”
Tencent also suspended broadcasts of Houston Rockets games.
In Shanghai, workers were tearing down advertisements for upcoming games
And fans protested outside the stadium where teams were set to play.
On social media, a fan posted this video of himself tearing up tickets to the game
in support for the Chinese government.
The NBA Commissioner stood behind Morey at a press conference.
“The long held values of the NBA are to support freedom of expression and, in this
case, Daryl Morey, as the general manager of the Houston Rockets, enjoys that right.”
But the league undercut their message when
journalists were stopped from asking about the incident afterwards.
“I just wonder after the events of this week and the fallout we’ve seen, whether
you would both feel differently about speaking out in that way in the future?”
Foreign businesses in China, have long recognized that there are red lines that must not be crossed.
And traditionally those have been the three Ts: Taiwan, Tibet, Tiananmen.
Three political issues the Chinese government tries to control messaging around.
Companies have learned that if you cross one of these lines, there is a price to pay.
For example, in 2018 Gap was selling this t-shirt featuring a map of China without Taiwan.
After a photo of the shirt was posted online, Gap apologized and promised to stop selling
the “incomplete” t-shirt in a statement released by People’s Daily: a government newspaper.
You're talking about a one party state that has the ability to let you in, to expel you, to make you rich.
By withholding access to consumers, China forces foreign companies to apologize
and/or change their message in order to continue selling products.
Because China has a population of 1.4 billion, that usually works.
The NBA learned that doing business in China means playing by their rules and that’s
not what US leaders like President Clinton had envisioned.
The hope was that trade with China would open it up to ideas of democracy and free speech,
while making American companies money at the same time.
But as American companies changed their messages to sell products in China,
the risk became importing Chinese censorship.