Chen Jie/China Foto Press

Olympics

Beijing Olympics: More at Stake than Gold Medals

Although largely celebrated as China's global coming-out party, the Beijing Olympics poses uncertain risks and challenges for Olympic organizers and foreign corporate sponsors

by Drew Thompson

As the Omega clock in Tiananmen Square counts down to the opening ceremony of the summer Olympic Games on the auspicious day of August 8, 2008, Beijing will increasingly be the focus of world attention. That attention will bring significant opportunities and risks to Beijing, Olympic sponsors, and international companies that invest in China. With thousands of foreign media and an unknown number of activists prepared to descend on Beijing, the PRC leadership would be naïve to believe that it can present a one-dimensional, exclusively positive image to the world. Despite efforts to shape its image as a "responsible" country and emerging power, China cannot realistically expect negative preconceptions and critical reporting to melt away in such a highly politicized environment.

Quick Glance

Companies operating in China, particularly Olympic sponsors, need to be aware of possible risks related to next summer's games.
These companies should consider now how they will respond to events that could have a negative effect on their corporate image.

Although Beijing officials hope the spotlight will be forgiving, whether the international media will act accordingly is unclear. With growing international economic and political clout, China will confront myriad issues that are not directly related to the 2008 Beijing Olympics. International concerns about China's product safety, trade surplus, assertive foreign policy, and growing eagerness among activists of all political persuasions to capitalize on the international attention present significant risks to Olympic organizers and sponsors.

While PRC leaders are concerned about maintaining social stability and projecting a positive image associated with the games, corporations, particularly large and high-profile companies, will face risks from negative media portrayals and activists with specific agendas. PRC officials have voiced their concerns about image and security risks but have determined that the benefits of holding the Olympics outweigh the risks. Quoted in the China Daily in August 2007, Jiang Xiaoyu, an executive vice president of the Beijing Organizing Committee of the Games of the XXIX Olympiad (BOCOG), noted that "Great achievement is always accompanied by great challenges." The PRC government has actively sought to mitigate risks associated with the Olympics, and multinational corporations (MNCs) linked to the games should take similar precautions.

China's challenges and risks

As part of its efforts to present a positive image to the world, China has taken several critical steps to ensure that the Olympics will be successful.

Infrastructure and pollution

Although construction of imposing and architecturally significant Olympic venues is on schedule and relatively free of controversy, air quality is posing a greater challenge. Beijing's efforts to address the city's notorious traffic woes—a major source of pollution in the capital—have been tested during events such as the December 2006 China-Africa Forum. Other efforts include relocation of polluting factories and a massive tree planting scheme, which are expected to reduce the likelihood of a sandstorm hitting the capital next August. Despite these efforts, air quality remains poor in the capital. Propaganda officials no longer hype the "Green Olympics" slogan. Instead, they hope that visitors to Beijing in August 2008 will merely be spared the gray skies that often plague the city.

Press freedom

As Beijing prepares to welcome an influx of journalists, China has expanded media freedoms for foreign journalists under regulations that took effect in 2007, though coverage of what China vaguely defines as "state secrets" is still prohibited.

A 2006 Foreign Correspondents Club of China survey of the Beijing-based international press corps revealed, however, that although the media landscape has improved, foreign journalists are still dissatisfied with the pace and quality of the new freedoms granted to accredited foreign journalists. The survey cited at least 38 incidents of detainment since 2004, primarily when foreign journalists were covering sensitive issues such as land disputes, antipollution protests, and HIV/AIDS. China also recently began to compile a database of all foreign journalists expected to cover the Olympics. Although PRC officials claimed that the list will help them to better serve journalists, many foreign journalists remain skeptical about the list's purpose, according to news reports.

As foreign journalists covering China during the Olympics fan out across the country, ham-fisted local cadres, particularly those unaccustomed to Chinese or foreign reporting on issues normally considered sensitive, will create ample opportunities for journalists to cover "oppressive" government restrictions. Journalists already have some latitude to cover unflattering issues, such as rural poverty and environmental degradation. Nevertheless, despite the significant strides in transparency that China has made over the past 20 years, a "transparency gap" with Western nations is likely to remain prior to the opening ceremony, virtually ensuring that press freedoms will fall short of many visiting journalists' expectations.

International pressure

Some of the organizations and activists that make up international civil society pose a management challenge for Beijing and Olympic sponsors. Well-funded US-based coalitions and celebrity activists, such as those focused on Darfur, Sudan, human rights, HIV/AIDS, and other issues, have achieved some success in influencing China's foreign and domestic policy behavior.

Reflecting the intensifying influence of globalization and economic interconnectedness, China has adjusted its long-standing foreign policy principle of non-interference in other nations' internal affairs, in part because of international non-governmental organization (NGO) and foreign government advocacy efforts. UN and US officials responsible for Sudanese affairs have commented that China was instrumental in motivating the Sudanese president to open negotiations with rebels and accept peacekeepers in Darfur, presumably in response to international pressure.

Other examples of China responding to international public opinion include the country's prominent role in the six-party talks over North Korea and in moderating the behavior of Myanmar generals during the crisis in the fall of 2006. In the domestic sphere, China's constructive response to a growing and unchecked HIV/AIDS epidemic, which began in 2003, also reflects the influence of external actors, including the Joint United Nations Program on HIV/AIDS, the World Health Organization, and the Geneva-based Global Fund to Fight AIDS, Tuberculosis, and Malaria. Likewise, China's approach to press freedoms has evolved steadily over time, in part because of pressure to conform more closely to US and EU norms.

These and other modest achievements are unlikely to satisfy activists who are heavily invested in those causes, however. Some activists and NGOs are arguably opportunistic, using the Olympics and negative global impressions of China to boost their relevance and exposure. International Olympic Committee member Hein Verbruggen, who leads the group that oversees Beijing's preparations, told CNN in August 2007, "The way in which the games are being used as a platform for groups with political and social agendas is regrettable."

As the Olympics approach, NGOs will likely increase the volume and frequency of their activities, posing risks for companies and organizations associated with the event.

As the Olympics approach, NGOs will likely increase the volume and frequency of their activities, posing particular risks for the PRC government and companies and organizations associated with the event. One senior BOCOG official, quoted in the China Daily in August 2007, pointed out that there is limited room for dialogue, stating: "We welcome constructive criticism on our faults and defects, but we resolutely oppose the politicization of Olympic affairs, for this is not in accordance with the Olympic spirit and Olympic charter."

At this point, there are few indications that PRC government reactions to political protests will be tempered or nuanced, especially given the fact that it is unaccustomed to substantive engagement with international civil society. How China manages foreign and domestic NGOs or protesters during the Olympics will be closely scrutinized. During a briefing on security plans in November, the deputy director of the Olympics Security Command Center said that protests and demonstrations will be dealt with promptly in accordance with PRC law and noted that any legal demonstration will require advance approval from authorities. If the government responds with force or in an overly heavy-handed way to demonstrations, otherwise minor incidents could generate significant media attention.

Challenges for foreign companies during the games

Managing corporate image

MNCs sponsoring the 2008 Olympics face considerable risks that cannot be easily mitigated. PRC officials and MNCs have a decidedly different calculus when it comes to protecting national and corporate images, respectively. Moreover, the Chinese state has more tools at its disposal to quell dissent, notably a colossal security force and a court system subordinate to political authorities. Protestors of any stripe will likely be unwelcome at event venues, and some high-profile MNCs may find it difficult to escape controversy.

For instance, the Coca-Cola Co., a sponsor of the Olympics since 1926, has agreed to support the torch relay, despite controversy over the relay route through the Tibet Autonomous Region and objections from Taiwan over the island's political status. General Motors Corp. has distanced itself from controversy by recently announcing its intention to not sponsor the Olympics, though it is unclear whether such a move was motivated by political or financial considerations. Nonetheless, General Motors' presence is already visible in the United States through its sponsorship of the US Olympic team, and it is well-known in China as a major foreign investor. McDonald's Corp. has also faced pressure from within China, including from the All-China Federation of Trade Unions, over working conditions and wages, underlining a potential vulnerability that might resurface during the Olympics.

US corporations should not rely on either the PRC or US government to provide significant support when faced with a public relations crisis associated with the Olympics. PRC officials would invariably respond to a peaceful protest in front of a government ministry differently than they would to one in front of a Chinese or foreign company. Protests aimed at a company, for instance, would likely be met with a milder response because demonstrations that focus on corporate interests are a lower priority for government security organs. In addition, US government officials may be reluctant or unable to effectively support a US company linked to politically sensitive issues in China. One US congressional representative has already urged major companies to be "responsible sponsors" and use their leverage to lobby PRC officials on the Darfur issue.

With all eyes trained on China during the Olympics, MNCs must be especially attuned to quick shifts in public opinion.

Worldwide, the growing influx of information from the Internet, including digital bulletin board service chatter and blog rants, has made managing corporate image more challenging in recent years. With all eyes trained on China during the Olympics, MNCs must be especially attuned to their strategies, policies, practices—and quick shifts in public opinion.

Ensuring food and product safety at the games

In addition to foreign policy and human rights issues, the PRC government and several MNCs have faced a significant international public relations crisis related to food and consumer product quality over the past several months (see Careful Contracts Reduce Risk). Most senior PRC officials have recognized the gravity of the issue and have engaged with international government counterparts to begin implementing regulations and procedures to improve product safety.

Extensive media reporting and high-level official dialogues on the issue ensure that China will seek to mitigate the risk from unsafe food, maintain the focus on food and product safety, and raise the expectation that the benefits of enhanced oversight will extend beyond the Olympics. Although a high-tech tracking and tracing system—which Beijing pledged to implement—is a positive step toward ensuring the safety of food supplies for Olympic athletes, risks remain. Poor animal husbandry practices, a dilapidated healthcare system, and widely varied hygiene and manufacturing practices increase the risk that a public health, food safety, or consumer product crisis could emerge at an inopportune moment, with little guarantee that local or central government officials will respond appropriately.

Although recent product safety issues are not directly related to the Olympics, they reveal many MNCs' vulnerability to external pressure and the challenge of maintaining a positive public image in the complex business environment in China. The potential consequences of mismanaging public relations can extend beyond the Chinese market to home markets. While a misstep in China, such as negligence in a manufacturing or procurement process, might affect relationship-centered business opportunities in China, legal liabilities resulting from those missteps can multiply in the United States.

Nationalism and sportsmanship

Perhaps the ultimate risk to China and the MNCs associated with the Olympics is the long-term impact of the event on China's international relations—which, in part, depends on the management of the games—and the image the country wishes to project to the rest of the world. Chinese expectations for a successful Olympics are palpable and will translate into intense pressure on Chinese athletes to perform well and secure medals. A focus on medal counts will undoubtedly serve as an indication of "national strength" for some Chinese citizens. The distinction between average Chinese sports fans and ardent nationalists might become difficult to distinguish as the differences between athletic triumph and China's status as an emerging superpower become blurred.

PRC Olympic officials and commentators have admitted that there is the potential for overreaction when nationalism spills into sport, stating: "We must be a friendly and professional audience." According to one Beijing resident quoted in the China Daily in August 2007, "We want foreigners to discover Chinese culture and to know that China is a strong country now." Nationalistic sports fans can potentially engage in unsavory behavior, such as poor sportsmanship, violence, and flag burning, that can sully the host country's reputation. This issue may be particularly salient in China because the Chinese Communist Party has linked its legitimacy to nationalistic concepts, and the Olympics could easily fan collective nationalism.

Such rabid nationalism surfaced when Chinese fans booed during the Japanese national anthem at the 2004 Asian World Cup final between China and Japan and heckled the Japanese team at the Women's World Cup in Hangzhou, Zhejiang, earlier this year. A mob of fans even surrounded the Japanese team's bus and pelted it with rocks. As a result, former Beijing Mayor Wang Qishan ordered cheering squads to train Beijingers who "will fill stadiums with the polite noise of rhythmic clapping and drumming and a preapproved roster of 20 chants," according to a November 2007 Telegraph article. Because China has never before hosted a sporting event of such magnitude, it is impossible to predict whether Chinese fans will misbehave in response to a particular situation, regardless of the nationality of the competitors involved.

The emphasis on the medal count may prove to be a "Catch 22" for China's efforts to shape its global image over the long term. Widespread media coverage of China's economic development and an overall victory in the Olympic medal count could negatively impact public perceptions about China. If China takes home the most medals, it may ultimately "lose" favorable international public opinion because such a victory could cause foreign viewers, particularly those in the United States, to ask how the Chinese have "caught up," thus adding another dimension to what the Chinese refer to as "the so-called China threat." PRC officials have sought to play down the medal count issue, noting that though Chinese athletes have a home court advantage, global audiences should not over-estimate their prospects for victory. To date, PRC officials have been cautious in predicting China's total medal haul. Corporate sponsors should nonetheless consider the broader implications of overly nationalistic images of Chinese victories in terms of whether they can capitalize on those images or whether the images could negatively affect their performance in other markets.

What can companies do?

Companies can take several steps to prepare for, and prevent, negative publicity during the Olympics.

Perform a risk assessment Conduct research on likely or potential areas of controversy with which your company could be associated, including relationships with corporate vendors or customers and government partners. Issue areas, such as the environment, labor, media freedom, foreign policy, and human rights, also deserve scrutiny. MNCs would do well to review supply-chain information to ensure that vendors comply with legal requirements and corporate standards and to track Chinese and international public opinion.
Develop crisis plans MNCs should ensure that a crisis plan is in place and prepare in advance to respond honestly and directly at the outset of a crisis. Plans should involve corporate headquarters as well as local China offices and identify spokespersons and corporate resources (see the CBR, September-October 2007, Planning for Highly Improbable Events). Moreover, MNCs should develop an engagement plan with government, media, academics, and "opinion leaders" in key communities and create "stakeholder maps" of Chinese and international stakeholders. Having such a plan in place would help to identify critical issues and areas of expertise or influence where each stakeholder will add value to a strategic response. Plans should include corporate security responses to non-violent, direct actions by NGOs, such as demonstrations in front of company offices or factories.
Corporate social responsibility (CSR) MNCs should review their corporate China and global CSR initiatives prior to the Olympics (see the CBR, May-June 2007, CSR Best Practices). Fact sheets and communications that clearly describe corporate objectives and achievements should be readily available. Foreign companies should also consider linkages between their CSR inventory and crisis topics. Such a strategic review can be more than an academic or "defensive" enterprise.

Uncertainties remain

The PRC leadership has defined the 2008 Beijing Olympics as the ultimate manifestation of China's emergence as a normal member of the international community. The games will usher in a "new-new era" for China, putting the political turmoil of the Mao era and the unrest of 1989 behind it. Just as China's reemergence as a global power both defines and challenges how the world perceives it, the country, and the MNCs heavily invested in it, must be cautious to avoid becoming victims of their own success.

The potential challenges facing the games' organizers give rise to critical questions that will shape how the world accommodates an "emerged" giant. How will global audiences, particularly those in the United States and neighboring Asian countries, respond to the extensive media coverage, both positive and negative? Will overly positive images of meticulously groomed cities and victorious Chinese athletes undermine China's insistence that it seeks peaceful and harmonious development and that it is not a military or economic threat to the global community? Will those same images reinforce Washington's insecurity about ceding its competitive edge to Beijing? Will PRC leaders be forced to confront an increasingly nationalistic, medal-counting public at home at the expense of maintaining good relations with Japan, South Korea, and the rest of Asia? Already worried by a ballooning trade deficit and uncertainties in Iraq, will the US public find its global vulnerabilities reflected in Chinese national pride?

China's management of all these risks will determine how the Olympics are ultimately perceived in the global public eye. Despite the controversy and activism that will likely accompany the Beijing Olympics, there is some reassurance in the fact that the Olympics are still fundamentally about sports and should be appreciated as such.

Drew Thompson is director of China Studies and Starr senior fellow at the Nixon Center in Washington, DC.

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	Chen Jie/China Foto Press Print Article Olympics Beijing Olympics: More at Stake than Gold Medals Although largely celebrated as China's global coming-out party, the Beijing Olympics poses uncertain risks and challenges for Olympic organizers and foreign corporate sponsors by Drew Thompson As the Omega clock in Tiananmen Square counts down to the opening ceremony of the summer Olympic Games on the auspicious day of August 8, 2008, Beijing will increasingly be the focus of world attention. That attention will bring significant opportunities and risks to Beijing, Olympic sponsors, and international companies that invest in China. With thousands of foreign media and an unknown number of activists prepared to descend on Beijing, the PRC leadership would be naïve to believe that it can present a one-dimensional, exclusively positive image to the world. Despite efforts to shape its image as a "responsible" country and emerging power, China cannot realistically expect negative preconceptions and critical reporting to melt away in such a highly politicized environment. Quick Glance Companies operating in China, particularly Olympic sponsors, need to be aware of possible risks related to next summer's games. These companies should consider now how they will respond to events that could have a negative effect on their corporate image. Although Beijing officials hope the spotlight will be forgiving, whether the international media will act accordingly is unclear. With growing international economic and political clout, China will confront myriad issues that are not directly related to the 2008 Beijing Olympics. International concerns about China's product safety, trade surplus, assertive foreign policy, and growing eagerness among activists of all political persuasions to capitalize on the international attention present significant risks to Olympic organizers and sponsors. While PRC leaders are concerned about maintaining social stability and projecting a positive image associated with the games, corporations, particularly large and high-profile companies, will face risks from negative media portrayals and activists with specific agendas. PRC officials have voiced their concerns about image and security risks but have determined that the benefits of holding the Olympics outweigh the risks. Quoted in the China Daily in August 2007, Jiang Xiaoyu, an executive vice president of the Beijing Organizing Committee of the Games of the XXIX Olympiad (BOCOG), noted that "Great achievement is always accompanied by great challenges." The PRC government has actively sought to mitigate risks associated with the Olympics, and multinational corporations (MNCs) linked to the games should take similar precautions. China's challenges and risks As part of its efforts to present a positive image to the world, China has taken several critical steps to ensure that the Olympics will be successful. Infrastructure and pollution Although construction of imposing and architecturally significant Olympic venues is on schedule and relatively free of controversy, air quality is posing a greater challenge. Beijing's efforts to address the city's notorious traffic woes—a major source of pollution in the capital—have been tested during events such as the December 2006 China-Africa Forum. Other efforts include relocation of polluting factories and a massive tree planting scheme, which are expected to reduce the likelihood of a sandstorm hitting the capital next August. Despite these efforts, air quality remains poor in the capital. Propaganda officials no longer hype the "Green Olympics" slogan. Instead, they hope that visitors to Beijing in August 2008 will merely be spared the gray skies that often plague the city. Press freedom As Beijing prepares to welcome an influx of journalists, China has expanded media freedoms for foreign journalists under regulations that took effect in 2007, though coverage of what China vaguely defines as "state secrets" is still prohibited. A 2006 Foreign Correspondents Club of China survey of the Beijing-based international press corps revealed, however, that although the media landscape has improved, foreign journalists are still dissatisfied with the pace and quality of the new freedoms granted to accredited foreign journalists. The survey cited at least 38 incidents of detainment since 2004, primarily when foreign journalists were covering sensitive issues such as land disputes, antipollution protests, and HIV/AIDS. China also recently began to compile a database of all foreign journalists expected to cover the Olympics. Although PRC officials claimed that the list will help them to better serve journalists, many foreign journalists remain skeptical about the list's purpose, according to news reports. As foreign journalists covering China during the Olympics fan out across the country, ham-fisted local cadres, particularly those unaccustomed to Chinese or foreign reporting on issues normally considered sensitive, will create ample opportunities for journalists to cover "oppressive" government restrictions. Journalists already have some latitude to cover unflattering issues, such as rural poverty and environmental degradation. Nevertheless, despite the significant strides in transparency that China has made over the past 20 years, a "transparency gap" with Western nations is likely to remain prior to the opening ceremony, virtually ensuring that press freedoms will fall short of many visiting journalists' expectations. International pressure Some of the organizations and activists that make up international civil society pose a management challenge for Beijing and Olympic sponsors. Well-funded US-based coalitions and celebrity activists, such as those focused on Darfur, Sudan, human rights, HIV/AIDS, and other issues, have achieved some success in influencing China's foreign and domestic policy behavior. Reflecting the intensifying influence of globalization and economic interconnectedness, China has adjusted its long-standing foreign policy principle of non-interference in other nations' internal affairs, in part because of international non-governmental organization (NGO) and foreign government advocacy efforts. UN and US officials responsible for Sudanese affairs have commented that China was instrumental in motivating the Sudanese president to open negotiations with rebels and accept peacekeepers in Darfur, presumably in response to international pressure. Other examples of China responding to international public opinion include the country's prominent role in the six-party talks over North Korea and in moderating the behavior of Myanmar generals during the crisis in the fall of 2006. In the domestic sphere, China's constructive response to a growing and unchecked HIV/AIDS epidemic, which began in 2003, also reflects the influence of external actors, including the Joint United Nations Program on HIV/AIDS, the World Health Organization, and the Geneva-based Global Fund to Fight AIDS, Tuberculosis, and Malaria. Likewise, China's approach to press freedoms has evolved steadily over time, in part because of pressure to conform more closely to US and EU norms. These and other modest achievements are unlikely to satisfy activists who are heavily invested in those causes, however. Some activists and NGOs are arguably opportunistic, using the Olympics and negative global impressions of China to boost their relevance and exposure. International Olympic Committee member Hein Verbruggen, who leads the group that oversees Beijing's preparations, told CNN in August 2007, "The way in which the games are being used as a platform for groups with political and social agendas is regrettable." As the Olympics approach, NGOs will likely increase the volume and frequency of their activities, posing risks for companies and organizations associated with the event. As the Olympics approach, NGOs will likely increase the volume and frequency of their activities, posing particular risks for the PRC government and companies and organizations associated with the event. One senior BOCOG official, quoted in the China Daily in August 2007, pointed out that there is limited room for dialogue, stating: "We welcome constructive criticism on our faults and defects, but we resolutely oppose the politicization of Olympic affairs, for this is not in accordance with the Olympic spirit and Olympic charter." At this point, there are few indications that PRC government reactions to political protests will be tempered or nuanced, especially given the fact that it is unaccustomed to substantive engagement with international civil society. How China manages foreign and domestic NGOs or protesters during the Olympics will be closely scrutinized. During a briefing on security plans in November, the deputy director of the Olympics Security Command Center said that protests and demonstrations will be dealt with promptly in accordance with PRC law and noted that any legal demonstration will require advance approval from authorities. If the government responds with force or in an overly heavy-handed way to demonstrations, otherwise minor incidents could generate significant media attention. Challenges for foreign companies during the games Managing corporate image MNCs sponsoring the 2008 Olympics face considerable risks that cannot be easily mitigated. PRC officials and MNCs have a decidedly different calculus when it comes to protecting national and corporate images, respectively. Moreover, the Chinese state has more tools at its disposal to quell dissent, notably a colossal security force and a court system subordinate to political authorities. Protestors of any stripe will likely be unwelcome at event venues, and some high-profile MNCs may find it difficult to escape controversy. For instance, the Coca-Cola Co., a sponsor of the Olympics since 1926, has agreed to support the torch relay, despite controversy over the relay route through the Tibet Autonomous Region and objections from Taiwan over the island's political status. General Motors Corp. has distanced itself from controversy by recently announcing its intention to not sponsor the Olympics, though it is unclear whether such a move was motivated by political or financial considerations. Nonetheless, General Motors' presence is already visible in the United States through its sponsorship of the US Olympic team, and it is well-known in China as a major foreign investor. McDonald's Corp. has also faced pressure from within China, including from the All-China Federation of Trade Unions, over working conditions and wages, underlining a potential vulnerability that might resurface during the Olympics. US corporations should not rely on either the PRC or US government to provide significant support when faced with a public relations crisis associated with the Olympics. PRC officials would invariably respond to a peaceful protest in front of a government ministry differently than they would to one in front of a Chinese or foreign company. Protests aimed at a company, for instance, would likely be met with a milder response because demonstrations that focus on corporate interests are a lower priority for government security organs. In addition, US government officials may be reluctant or unable to effectively support a US company linked to politically sensitive issues in China. One US congressional representative has already urged major companies to be "responsible sponsors" and use their leverage to lobby PRC officials on the Darfur issue. With all eyes trained on China during the Olympics, MNCs must be especially attuned to quick shifts in public opinion. Worldwide, the growing influx of information from the Internet, including digital bulletin board service chatter and blog rants, has made managing corporate image more challenging in recent years. With all eyes trained on China during the Olympics, MNCs must be especially attuned to their strategies, policies, practices—and quick shifts in public opinion. Ensuring food and product safety at the games In addition to foreign policy and human rights issues, the PRC government and several MNCs have faced a significant international public relations crisis related to food and consumer product quality over the past several months (see Careful Contracts Reduce Risk). Most senior PRC officials have recognized the gravity of the issue and have engaged with international government counterparts to begin implementing regulations and procedures to improve product safety. Extensive media reporting and high-level official dialogues on the issue ensure that China will seek to mitigate the risk from unsafe food, maintain the focus on food and product safety, and raise the expectation that the benefits of enhanced oversight will extend beyond the Olympics. Although a high-tech tracking and tracing system—which Beijing pledged to implement—is a positive step toward ensuring the safety of food supplies for Olympic athletes, risks remain. Poor animal husbandry practices, a dilapidated healthcare system, and widely varied hygiene and manufacturing practices increase the risk that a public health, food safety, or consumer product crisis could emerge at an inopportune moment, with little guarantee that local or central government officials will respond appropriately. Although recent product safety issues are not directly related to the Olympics, they reveal many MNCs' vulnerability to external pressure and the challenge of maintaining a positive public image in the complex business environment in China. The potential consequences of mismanaging public relations can extend beyond the Chinese market to home markets. While a misstep in China, such as negligence in a manufacturing or procurement process, might affect relationship-centered business opportunities in China, legal liabilities resulting from those missteps can multiply in the United States. Nationalism and sportsmanship Perhaps the ultimate risk to China and the MNCs associated with the Olympics is the long-term impact of the event on China's international relations—which, in part, depends on the management of the games—and the image the country wishes to project to the rest of the world. Chinese expectations for a successful Olympics are palpable and will translate into intense pressure on Chinese athletes to perform well and secure medals. A focus on medal counts will undoubtedly serve as an indication of "national strength" for some Chinese citizens. The distinction between average Chinese sports fans and ardent nationalists might become difficult to distinguish as the differences between athletic triumph and China's status as an emerging superpower become blurred. PRC Olympic officials and commentators have admitted that there is the potential for overreaction when nationalism spills into sport, stating: "We must be a friendly and professional audience." According to one Beijing resident quoted in the China Daily in August 2007, "We want foreigners to discover Chinese culture and to know that China is a strong country now." Nationalistic sports fans can potentially engage in unsavory behavior, such as poor sportsmanship, violence, and flag burning, that can sully the host country's reputation. This issue may be particularly salient in China because the Chinese Communist Party has linked its legitimacy to nationalistic concepts, and the Olympics could easily fan collective nationalism. Such rabid nationalism surfaced when Chinese fans booed during the Japanese national anthem at the 2004 Asian World Cup final between China and Japan and heckled the Japanese team at the Women's World Cup in Hangzhou, Zhejiang, earlier this year. A mob of fans even surrounded the Japanese team's bus and pelted it with rocks. As a result, former Beijing Mayor Wang Qishan ordered cheering squads to train Beijingers who "will fill stadiums with the polite noise of rhythmic clapping and drumming and a preapproved roster of 20 chants," according to a November 2007 Telegraph article. Because China has never before hosted a sporting event of such magnitude, it is impossible to predict whether Chinese fans will misbehave in response to a particular situation, regardless of the nationality of the competitors involved. The emphasis on the medal count may prove to be a "Catch 22" for China's efforts to shape its global image over the long term. Widespread media coverage of China's economic development and an overall victory in the Olympic medal count could negatively impact public perceptions about China. If China takes home the most medals, it may ultimately "lose" favorable international public opinion because such a victory could cause foreign viewers, particularly those in the United States, to ask how the Chinese have "caught up," thus adding another dimension to what the Chinese refer to as "the so-called China threat." PRC officials have sought to play down the medal count issue, noting that though Chinese athletes have a home court advantage, global audiences should not over-estimate their prospects for victory. To date, PRC officials have been cautious in predicting China's total medal haul. Corporate sponsors should nonetheless consider the broader implications of overly nationalistic images of Chinese victories in terms of whether they can capitalize on those images or whether the images could negatively affect their performance in other markets. What can companies do? Companies can take several steps to prepare for, and prevent, negative publicity during the Olympics. Perform a risk assessment Conduct research on likely or potential areas of controversy with which your company could be associated, including relationships with corporate vendors or customers and government partners. Issue areas, such as the environment, labor, media freedom, foreign policy, and human rights, also deserve scrutiny. MNCs would do well to review supply-chain information to ensure that vendors comply with legal requirements and corporate standards and to track Chinese and international public opinion. Develop crisis plans MNCs should ensure that a crisis plan is in place and prepare in advance to respond honestly and directly at the outset of a crisis. Plans should involve corporate headquarters as well as local China offices and identify spokespersons and corporate resources (see the CBR, September-October 2007, Planning for Highly Improbable Events). Moreover, MNCs should develop an engagement plan with government, media, academics, and "opinion leaders" in key communities and create "stakeholder maps" of Chinese and international stakeholders. Having such a plan in place would help to identify critical issues and areas of expertise or influence where each stakeholder will add value to a strategic response. Plans should include corporate security responses to non-violent, direct actions by NGOs, such as demonstrations in front of company offices or factories. Corporate social responsibility (CSR) MNCs should review their corporate China and global CSR initiatives prior to the Olympics (see the CBR, May-June 2007, CSR Best Practices). Fact sheets and communications that clearly describe corporate objectives and achievements should be readily available. Foreign companies should also consider linkages between their CSR inventory and crisis topics. Such a strategic review can be more than an academic or "defensive" enterprise. Uncertainties remain The PRC leadership has defined the 2008 Beijing Olympics as the ultimate manifestation of China's emergence as a normal member of the international community. The games will usher in a "new-new era" for China, putting the political turmoil of the Mao era and the unrest of 1989 behind it. Just as China's reemergence as a global power both defines and challenges how the world perceives it, the country, and the MNCs heavily invested in it, must be cautious to avoid becoming victims of their own success. The potential challenges facing the games' organizers give rise to critical questions that will shape how the world accommodates an "emerged" giant. How will global audiences, particularly those in the United States and neighboring Asian countries, respond to the extensive media coverage, both positive and negative? Will overly positive images of meticulously groomed cities and victorious Chinese athletes undermine China's insistence that it seeks peaceful and harmonious development and that it is not a military or economic threat to the global community? Will those same images reinforce Washington's insecurity about ceding its competitive edge to Beijing? Will PRC leaders be forced to confront an increasingly nationalistic, medal-counting public at home at the expense of maintaining good relations with Japan, South Korea, and the rest of Asia? Already worried by a ballooning trade deficit and uncertainties in Iraq, will the US public find its global vulnerabilities reflected in Chinese national pride? China's management of all these risks will determine how the Olympics are ultimately perceived in the global public eye. Despite the controversy and activism that will likely accompany the Beijing Olympics, there is some reassurance in the fact that the Olympics are still fundamentally about sports and should be appreciated as such. Drew Thompson is director of China Studies and Starr senior fellow at the Nixon Center in Washington, DC. Further Reading Going for an Olympic Marketing Gold Beijing Olympics 2008: Opportunities for Foreign Firms Making Green in Beijing The Green Olympics and CSR Blue Skies for the Beijing Olympics Copyright 2008 US-China Business Council Top of Page Table of Contents
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