Visible Hands: Made in China❓

Geopolitical tensions, human rights violations, and billions of dollars are at stake...

📚 Book club meeting soon! We’re reading The Fifth Risk by Michael Lewis. Join us next Sunday, July 26 @ 2 PM ET / 11 AM PT (Zoom link here and here’s the calendar invite). Excited to discuss your thoughts on the book and the role of government broadly. And please feel free to come even if you haven’t had a chance to finish (or read a page of the book).

As Chinese companies gain power, the US government and businesses scramble to respond. And American businesses face pressure from the Chinese government and concerns about human rights. It’s as dramatic as Hype House.

You've probably seen that TikTok is under increased scrutiny. TikTok is on the list of 59 Chinese apps that the Indian government is trying to block out of data security concerns. Amazon awkwardly banned and then unbanned TikTok from its employees’ work phones, while other US companies, like Wells Fargo, have forced employees to remove the app from company devices. Notably, President Trump and Secretary Pompeo (and White House adviser Navarro) have indicated that the US is considering banning TikTok, drawing parallels to past government actions against Huawei and ZTE (the 5G folks). But don’t worry, the lobbyists are coming!

It’s not all bad for Chinese businesses: Bloomberg's billionaire index has seen significant growth in Chinese wealth recently.

Meanwhile, it’s become harder to criticize China. We have the hubbub between ESPN and Senator Josh Hawley around the NBA demurring to Chinese pressure. Remember when the Houston Rockets’ general manager shared a pro-Hong Kong tweet and was forced to apologize? China pulled NBA games off the air and the league subsequently lost “more than $300 million in revenue” in February.

On the supply chain front, the Australian Strategy Policy Institute’s (ASPI) 2020 report alleged several US brands used forced Uighur labor (though several companies denied working with the accused vendors). Subsequently, Nike also announced they were reviewing their suppliers for “potential risks related to employment of people from Xinjiang.” This same problem arose last year for other companies as well (including Adidas, H&M, Kraft Heinz, Coca-Cola, and Gap).

So with geopolitical tensions, human rights violations, and billions of dollars at stake, how should businesses approach these concerns?

According to NYU Professor Michael Posner, “All too often, U.S. companies have opted to pursue their economic interests, while paying insufficient attention to how their words and actions affect the broader human rights debate.” And information is also often unreliable: Leta Hong Fincher shared how Bloomberg News axed unflattering stories about China. 

There’s not an easy panacea to these issues. Strong international standards are a start, but are difficult to devise and enforce. Take for example, the United Nations Global Compact, a list of 10 human rights, labor, environment, and anti-corruption principles: 11,017 companies globally have signed on, including active American signatories like Bloomberg, Bank of America, Starbucks, and CVS Health. Yet, the fact that only 123 US companies actively commited to principles as seemingly basic as “not complicit in human rights abuses” and “effective abolition of child labour” is pretty startling. (That’s, of course, not to say that non-signatories are necessarily engaging in violations…)

It’s telling when tech bad boy, Mark Zuckerberg, is concerned about the future of internet data privacy if the Chinese model dictates the rules. The EU’s General Data Protection Regulation (GDPR -- the reason behind those privacy policy emails back in 2018) is one of the world’s most comprehensive digital privacy regulations and applies to companies that operate in the EU, including TikTok. Given ongoing concerns around TikTok’s use of data, could stronger international data privacy standards be warranted? And how would they be set and enforced?

As an consumer:

• Consider researching the supply chain transparency before you buy. Though none of these resources are the one-stop shop for supply chain questions, you can check the certification reports the company has. For example, you can find CVS Health’s Communication on Progress for the UN Global Compact online.

• Worried about your social media data? Check out this Forbes assessment on TikTok and this Wired article on Facebook’s most recent civil rights audit. (Though security breaches are becoming all too common…)

As an investor:

• Know the Chain shares information on forced labor risks within global supply chains. Find their 2020 scorecards here (mainly large companies). For Amazon, they identified “one allegation of forced labor in the company’s supply chains. While the company discloses undertaking follow-up audits, it does not disclose engagement with affected stakeholders nor remedy outcomes for workers.” 

As a citizen:

• Laws like the UK Modern Slavery Act and the California Transparency in Supply Chains Act are important policies holding businesses accountable for the ethics and transparency of their supply chains. 

• The California Consumer Privacy Act protects personal user information (especially against opaque third party sharing) Similar to GDPR and the EU, CCPA applies to all companies that serve California residents (aka a lot of tech global companies).

• Seeing any trends? State legislation can have a huge ripple effect on business standards. Vote in your local elections!

As an employee:

• New companies, such as Supply Shift, offer tech-enabled tools to improve supply chain transparency. These technologies might be game changers — could your company use them?

• You Can Make Millions Selling Masks to the Government in Three Easy Steps: “This transaction is just one small example of the thousands of murky deals that have sprung from the Trump administration’s $17.7 billion — and counting — spending spree to address the pandemic. Of that, about $6.8 billion was spent on PPE and related equipment…More than 2,000 of those contracts, including two with VPL, were given without any competitive bidding [and]...got contracts totaling $2.29 billion.”

• Covid Conversations With One of America’s Richest Men.This whole article is wild. It’s hard to pull a succinct quote but “So none of this was about frustration with the system itself—with tax cuts that favor the rich, government bailouts for big corporations, or the decline of the social safety net? ‘I’m sorry,’ [the billionaire] said. ‘Nobody’s worried about the system. They’re mad about what’s happening in their life.’”

• The Federal Agency that’s Supposed to Protect Workers is Toothless on Covid-19: “[OSHA’s] guidelines are nonbinding and unenforceable, essentially toothless without repercussions for employers who don’t comply...the pandemic could present an opportunity for the labor movement if workers can collectivize around their fear, get the likes of the United Food and Commercial Workers or the United Auto Workers Union to advocate on their behalf, and demand better working conditions through the collective-bargaining process.”

• Fracking Firms Fail, Rewarding Executives and Raising Climate Fears: “You have large corporations protecting and enriching their top executives, while they’re cutting corners and putting their companies in a death spiral...Ordinary Americans, the people who need the money the most, are being left behind and neglected.”

• The End of Small Business: “Competing in this environment requires scale, technology and cash: scale to justify major new investments, technology to build new systems and processes (such as online-to-curbside order fulfillment), and cash to pay for it all. Most mom-and-pop businesses don’t have those resources.”

• Wall Street Reaps a Bonanza on Fed’s Support for Corporate Debt: “Fees for underwriting blue-chip U.S. company bonds in the first half of the year essentially doubled to more than $7 billion, according to data compiled by Bloomberg, after the Fed set up an unprecedented series of programs to support corporate debt markets and slashed interest rates. U.S. companies have rushed to borrow, selling more than $1 trillion of high-grade notes in just a few months, and some of the proceeds have trickled down to banks.”

Stay connected via our Instagram,Twitter, Medium, and, of course, email (visiblehandsmedia@gmail.com)! Please invite any friends, roommates, coworkers, armchair activists, and TikTokers to join the movement. See ya next Thursday!