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Owen: Western Sponsors Face Careful Balancing Act as Beijing 2022 Nears

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Protestors from various human rights groups are calling for a boycott of the Beijing 2022 Winter Olympics. Photo: Sky News

By David Owen |

Beijing 2022 is shaping up to be a strange Winter Olympics for a number of groups, for athletes, for reporters – and for sponsors.

With little more than a month to go before the Opening Ceremony, the 14 large companies which are shelling out tens of millions of dollars to be part of the current The Olympic Partner (TOP) worldwide sponsorship program would normally be in full activation mode, doing everything in their power to make their pricey association with the great global sporting spectacle pay off.

And indeed in China itself – a vast and rapidly expanding market of well over a billion increasingly comfortably-off consumers – this is probably exactly what they are doing.

Outside the host country, however, sponsors are having to tread carefully lest escalating political tensions between the realm of President Xi Jinping and the West cause their investment to backfire.

A recent episode relating to Intel, the computer chip company whose exclusive sponsorship category is (wait for it) “5G technology platforms, VR, 3D and 360 content development platforms, artificial intelligence platforms, sports performance platforms, drones and processors” gives an idea of just how careful companies are having to be in a world where news – and misinformation – tends to travel fast and seamlessly, however hard some might try to stop it.

I came across a report of the episode in the Financial Times just before Christmas. According to this, the “controversy” began after California-based Intel “sent a year-end letter to suppliers noting that components made in the north-western Chinese region of Xinjiang should not be used in its chips.”

Xinjiang is, of course, one of a number of issues blamed for the deteriorating state of relations between the West and China. Others include Hong Kong, Taiwan and the increasing threat posed by China to the United States’s long-time global economic hegemony.

Returning to Intel, the FT reported that this letter had “attracted the attention of nationalist media outlet Guancha”.

According to the newspaper, which bylined reporters in both Hong Kong and Beijing: “The episode quickly became one of the most talked-about topics online in China with netizens on Twitter-like Weibo calling for the Government to hit Intel with fines and other punishments.”

The FT said that, “in a Chinese language social media post, Intel said it wanted to ‘clarify’ that the ban was only for compliance with US law and not its “own intention or position.”

“We apologise for the trouble caused to our respected Chinese customers, partners and the public,” Intel added.

The FT also said that the chipmaker earned “one-quarter of its revenue from customers in China last year and has more than 10,000 employees in the country.”

When I asked Intel directly about the report, the company replied that it had “issued a statement in China to address concerns raised by our stakeholders there regarding how we communicated certain legal requirements and policies with our global supplier network.”

The company went on: “We will continue to ensure that our global sourcing complies with applicable laws and regulations in the US and in other jurisdictions where we operate.”

I would not be in the least surprised to see other International Olympic Committee (IOC) sponsors attempting to perform a similar balancing act in the weeks running up to ignition of the Olympic Cauldron in the Chinese capital.

Multinational corporations are of course used to tailoring their messaging to different audiences in different countries.

In less polarised times in 2004 or 2005, I remember being surprised by an announcement that EDF Energy, then a wholly-owned subsidiary of the French state-owned power supplier Electricité de France, had become a premier partner of London 2012. 

This at a time when the United Kingdom’s capital city was battling tooth and nail against its French counterpart Paris for the right to stage the 2012 Summer Olympics and Paralympics.

In reaction to my questions, the EDF Energy chief executive, Vincent de Rivaz, told me that “the vision that EDF Group has of the role of its subsidiaries in various countries – the UK, Italy, Germany or others – is very much about them acting locally.

“We are selling products which are essential for any social life,” de Rivaz added. “This gives us a special responsibility and that is deeply local.”

In more polarised times back in 1980, meanwhile, when the Summer Games were staged in Moscow, to the east of the ideological and military “Iron Curtain” then dividing Europe, there were two very good reasons why multinational companies did not face similar issues to those confronting the western sponsors of Beijing 2022.

First, very few Western companies had commercial interests of any size in the country then known as the Soviet Union. Second, while Moscow 1980 might, under different circumstances, have become known – improbable as it may seem – as the birthplace of sports marketing – the industry was at little more than embryonic stage.

It is also worth remembering in this context that when the Summer Games went to Beijing, in 2008, following a vote taken in 2001, relations between China and the West were widely perceived as on an improving path, with constructive engagement viewed, on the whole, as a smart policy option. A somewhat similar point might be made with respect to Russia and the Sochi 2014 Winter Games.

So Olympic history offers little by way of guidance for Intel and its fellow TOP sponsors regarding how best to navigate an Olympics staged in a country that is both an important market and a widely-perceived political and commercial adversary of wealthy Western liberal democracies.

As they ponder this, they can perhaps reflect that the main event of the present cycle – Paris 2024 – should, with a fair wind, bring a reversion to something approaching marketing normality.

Republished with permission from insidethegames.biz.

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