Part two of a two-part series.
It doesn’t take much to have progressives boycott your company, or to have universities and others divest your stocks.
A boycott of Goya foods began after CEO Robert Unanue appeared at a White House event and praised President Trump. He had previously met with and praised President Obama. Trader Joe’s was threatened with a boycott because it used goofy product names that some found offensive (e.g., “Trader Ming’s” for its Chinese food and “Trader José” for its Mexican food).
Air pollution in Shanghai, China.
Olive Garden was boycotted because a handful of its employees personally contributed $886 to President Trump’s campaign, and other companies such as SoulCycle have been subject to boycotts for similar reasons.
The Boycott, Divestment and Sanctions movement has been aimed at Israel for alleged oppression of Palestinians, in spite of suicide bombers and other terrorist acts. Divestment of fossil fuel stocks has been ongoing for years, especially among colleges, and divestment of stocks of South African companies to protest apartheid was widespread in the 1980s.
But, in spite of the popularity of such actions, hardly anyone seems to have considered boycotting Chinese products or divesting Chinese stocks.
A boycott would be difficult. China makes everything — it supplies 80% to 90% of antibiotics used in the U.S., for example — so how can anyone stop buying products made in China?
India, though, which is angered by the pandemic and a border dispute with China in the Himalayan territory of Ladakh, has begun a partial boycott. India has banned more than 50 Chinese apps, including consumer apps like WeChat, TikTok and Baidu Maps. And the government is asking Indian e-commerce companies to label country of origin for all products sold on its websites, so consumers can avoid buying goods labeled “Made in China.”
The U.S. has had mixed results with attempts to disallow business with certain Chinese companies, primarily because American companies don’t want the U.S. government interfering with its lucrative business in China.
President Trump issued an executive order on Aug. 6 banning U.S. individuals and firms from transactions involving WeChat, citing concerns over national security. But American companies such as Apple and Wal-Mart have expressed concern over the ban, because they need to use the messaging app to communicate in China.
Ironically, they can’t use U.S. apps such as Instagram and Twitter, because their use is banned in China.
The U.S. and other countries have banned the use of equipment made by telecommunications and consumer electronics giant Huawei Technologies Co., citing security concerns, as its equipment is believed to include backdoors that enable the Chinese government to spy on users. Huawei has also been accused of fraud, intellectual property theft and involvement with China’s “re-education” camps for Uighur Muslims.
However, except for a few government actions, neither a boycott nor divestment have received much air play in the U.S.
That may change, as the U.S. State Department is asking colleges and universities to divest from Chinese holdings in their endowments, and to disclose Chinese assets held in index funds.
“Boards of U.S. university endowments would be prudent to divest from People’s Republic of China firms’ stocks in the likely outcome that enhanced listing standards lead to a wholesale de-listing of PRC firms from U.S. exchanges by the end of next year,” Keith Krach, undersecretary for economic growth, energy and the environment, wrote in an Aug. 18 letter addressed to the board of directors of American universities and colleges.
“The boards of your institution’s endowment funds have a moral obligation, and perhaps even a fiduciary duty, to ensure that your institution has clean investments and clean endowment funds,” he wrote.
Colleges and universities have led efforts to divest fossil fuels, but are among the largest investors in Chinese stocks, even though China has had a greater impact on climate change than the companies that academia has divested. China is the world’s largest emitter of greenhouse gases, but its efforts to increase use of solar energy receive more media attention.
Given their obsession with “social justice,” will colleges and universities step up and divest Chinese stocks? Don’t count on it.