Boycott orders rise, but China sees retaliation

Countries and companies outside China face growing pressure to boycott the Beijing Winter Olympics next year, but China will not stand still in response, says political risk consultancy Eurasia Group.

“Western governments and companies face increasing pressure from human rights defenders and political critics in China to boycott the Beijing 2022 Winter Olympics,” according to analysts at the Eurasia Group.

The Games are scheduled to take place between the 4th and the 20th of February.

“China will punish countries that boycott the Games with political sanctions and trade retaliation, but with much more severity in the athletic boycott scene,” they said in a report published on Thursday.

“Activists have focused on Beijing’s crackdown on Uighurs in Xinjiang, which some Western governments have called ‘genocide’,” the report said. “Calls to avoid what activists label ‘Genocide Games’ will grow as the opening ceremony approaches, increasing the risks for governments, companies and investors – whether they decide to boycott or not.”

Last month, the governments of Canada, the United Kingdom and the United States issued a joint statement accusing the Chinese government of inflicting an “extensive repression program” on the Uighur people, including detention camps, forced labor and forced sterilizations.

China has repeatedly denied allegations of forced labor and other abuses in Xinjiang. The Foreign Ministry last month called these allegations “malicious lies” designed to “tarnish China” and “thwart China’s development”.

Companies were also caught in the crossfire.

In late March, H&M faced a backlash in China over a statement – allegedly from last year – in which the Swedish retailer said it was “deeply concerned” about reports of forced labor in Xinjiang.

Supporters of the Olympic boycott argue that it is “necessary to punish China for its systemic discrimination against ethnic minorities in Tibet and Xinjiang, repression of political freedoms in Hong Kong and hostility to self-government in Taiwan,” said the Eurasian report.

Eurasia outlined three possible scenarios: a diplomatic boycott, an athletic boycott or the so-called “atypical scenario”.

1. Diplomatic boycott

The most likely scenario – with a 60% probability – is that the United States will join at least one other major western country in a so-called diplomatic boycott of the Games.

“A diplomatic boycott is defined here as downgrading or not sending government officials to the Olympics and taking other important steps to deny Beijing the spotlight as a host,” the analysts explained.

Eurasia said that the likely participants in a diplomatic boycott would be the United States, Canada, the United Kingdom and Australia, with the possibility of some European countries joining.

In Asia, however, US partners such as Japan, India and South Korea – which have “more complex political dynamics” or deeper economic relations with China – are not expected to join this boycott.

The diplomatic approach is the least drastic scenario, according to Eurasia.

2. Athletic boycott

In this scenario, which is 30% likely, one or more Western countries could prevent their athletes from participating in the Games, perhaps by applying internal political pressure. An economic boycott is defined as a ban on US viewers, broadcasters and sponsors.

“Athletic and economic boycotts, which are more difficult to ignore by the public, would force even tougher retaliations from Beijing, possibly involving a diplomatic freeze and more widespread consumer boycotts against Western brands,” said Eurasian analysts.

3. ‘Boycott Lite’

This is an atypical scenario in which tensions between the West and China subside and there will be “moderate political statements about the Games”, but no formal boycott, analysts said, labeling it a “light boycott”.

It is the least likely scenario and has only a 10% chance of happening, they said, adding: “There is currently little reason to be optimistic about the trajectory of Sino-Western relations.”

Here, heads of state can refuse to attend the Games and cite scheduling conflicts or other non-political excuses. “The rhetoric would fall far short of an enthusiastic endorsement by Beijing as a hostess, but there would be no boycott declaration and no presentation of a united Western position,” the report said.

A boycott of the Olympics “would lessen any soft power dividend” that Chinese President Xi Jinping hoped to gain from the event, which gives Beijing “a platform to promote its global status among the domestic audience and project a positive image for billions of foreign viewers. around the world, “said Eurasian analysts.

“Beijing will almost certainly retaliate against countries involved in boycotts,” analysts said. “Beijing’s direct response to a diplomatic boycott would likely be a reciprocal boycott of Western events and sanctions against prominent boycott advocates.”

Increasingly, consumer companies based outside of China are attempting a balancing act – projecting an image of human rights concerns to consumers outside of China, on the one hand, while trying to avoid being left out of the huge Chinese market, for another.

“If a company does not boycott the Games, it risks damaging the reputation of Western consumers. But if it does, it risks being excluded from the Chinese market,” analysts said.

Due to the high international profile of the Games, retaliation in China may be “even worse” than the current removal of H&M’s commercial presence on the Chinese Internet, they said.

Still, analysts say most companies are likely to choose to participate in the Olympics, as “the potential cost of losing access to the Chinese market is likely to outweigh concerns about a reaction from the Western consumer,” which Eurasia predicts is likely to be soon.

– CNBC’s Arjun Kharpal contributed to this report.