China’s Public Diplomacy: International Companies Face Increasing Reputational Risks



Mercator Institute for China Studies

German camera manufacturer Leica wanted to pay tribute to heroic photographers with an advertising video. One of the featured photographers had taken a picture of a young Chinese man standing in front of a tank in the center of Beijing in June 1989. Soon after the video became available in China via streaming services in April 2019, Weibo users reacted angrily: “#Leica insults China,“ they posted. In January 2018, the US hotel group Marriott sent its customers a questionnaire that treated China, Hong Kong, and Macao as distinct regions. The Chinese government blocked the website for a week. German carmaker Mercedes-Benz in February 2018 published an Instagram post quoting the Dalai Lama. The text led to widespread indignation in China, even though the social media service is blocked there.

These three examples are by no means isolated cases. The list of companies with similar stories to tell can be extended – Audi, Delta Airlines, Dolce & Gabbana, Gap, Lotte, MAC, Medtronic, Skoda, Zara. Since 2017, communication campaigns launched by all of these international corporations were publicly criticized by China – often even sanctioned – even when the campaigns were not targeted at the Chinese market. Most of the companies had no choice but to apologize in Beijing so as not to jeopardize their market position. Beijing‘s efforts to use China’s economic power to enforce its standards internationally are a new challenge companies have to take seriously. This reflects two trends: Firstly, China has become an important market for many companies, if not their largest single market in the world – in other words, the Chinese government and public have become influential stakeholders for many companies; secondly, Beijing in recent years has greatly stepped up its efforts in the field of public diplomacy to convince foreign audiences of Chinese views – and the Chinese leadership has proved ever more willing to focus on international companies when it comes to asserting Beijing’s geopolitical ideas or gaining support for its initiatives.

The Chinese Foreign Ministry in 2004 created a department for public diplomacy under the purview of the information department. An extensive network of state actors, state-financed media, and public-diplomacy instruments has appeared since then. This article looks at China’s public diplomacy efforts and takes them to encompasses the various activities of the Chinese party and state leadership that serve to propagate their ideas, values, and (geo) political ideals. Public diplomacy includes instruments that can, on the one hand, coerce or incentivize cooperative behavior, and, on the other hand, sanction undesired behavior. It is essential to understand these instruments can have an effect on corporate communications activities outside China. Public diplomacy has to be treated as a corporate risk that continually has the potential to turn into a cross-border organizational and reputational crisis.

China Monitor Diplomacy

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