Issues faced by marketers during the 2022 Winter Olympics highlighted a growing disconnect between the costs and opportunities for businesses operating in China and elsewhere outside of the U.S. Corporate sponsors of the event faced possible sanctions because of political and human rights differences between the countries.
Ultimately, U.S. businesses helped successfully defeat legislation that would have prevented them from sponsoring the Games and selling products to the American government. However, other companies continue to carefully traverse the legal gap between the two countries.
Laws from both countries challenge business operations
According to The New York Times, the U.S. will enact a law in June 2022 that will give the U.S. government the ability to prevent imports manufactured with materials sourced from the Xinjiang region. The law expands upon the restrictions already in place. The U.S. also maintains regulations that impose restrictions on the sale or transfer of certain sensitive technology to some Chinese firms, as well as substantial tariffs on goods from the country. China has an anti-sanctions law, allowing the government to act against businesses in compliance with foreign laws viewed as biased against the country.
Left in the middle, businesses have the unenviable task of trying to comply with U.S. law, Chinese law and public opinion. Some have scaled back their operations in the country. Others, however, have attempted to comply with both sides, while telling neither in order to avoid the possible fallout.
While the Chinese market cannot be ignored, operating in the country does not come without challenges. Understanding their rights, responsibilities and obligations on both sides may help businesses choose the right path for their futures.