Tech companies struggle in complicated relationship with communist China

A new report from Victims of Communism gives several American tech companies a failing grade for their “complicity” with China and its human rights violations, an ongoing controversy for tech companies which often rely on the nation’s cheaper labor and large market to pad their profits.

The report examines Amazon, Apple, Dell, Facebook, GE, Google, Intel, and Microsoft on a range of issues, including to what degree they partner with China’s surveillance state and human rights violations.

“This research does not assume that doing business in China is inherently wrong. However, support for Beijing’s military modernization, surveillance state, and human rights violations may contradict professed corporate ethics, mislead consumers, and risk violating relevant laws in the US and elsewhere,” the report said. “Many US companies began their relationships with China well before China revealed itself as an aggressive international player. Companies which do substantial business with China need to reassess their role – not just the benefit they receive, but the degree to which they could be said to facilitate China's abusive domestic and international policies.”

China’s human rights abuses have come under particular scrutiny ahead of the Beijing Olympics kicking off this week. Activists have called for a boycott of the games with reports that some athletes are considering opting out this time around to protest China’s communist government.

The VOC report gave a failing grade to GE, Intel and Microsoft for their “direct support to military or state security.” GE, along with Dell, were also given a failing grade for conducting operations in Xinjiang, a territory in China where about a million Uyghur Muslims have been held in “re-education camps” by the Chinese government.

Amazon and Apple did a little better with a grade of “D.” No companies received an A, but both Facebook and Google received a “B” grade.

Those ratings were compiled through a variety of factors, including the risk of their supply chain's exposure to forced labor or government surveillance as well as the nature of their relationship with Chinese officials.

“The profiles are also meant to convey the need to develop a new framework for corporations doing business in China,” the report said. “Companies should recognize the operational and reputational risks associated with engagement with the Chinese government and its state-driven industrial system, even when their engagement seems limited to the private sector. US investors must also recognize these risks and internalize them as they consider the long-term prospects of companies with significant exposure to China and the CCP.”

Victims of Communism said their goal is to have more scrutiny and a greater conversation about the responsibility of U.S. companies when dealing with China.

“The research findings are wide-ranging and invite further scrutiny of how U.S. companies’ engagement with China relate to US-sanctioned Chinese entities such as the Xinjiang Construction and Production Corps as well as U.S. laws such as the U.S. Trafficking Victims Protection Act,” said Ken Pope, Director of Academic Programs at VOC. “Overall, this project aims to inspire the development of new best practices for U.S. industry. Rather than merely condemning the U.S. private sector, the report develops a grading scorecard system to incentivize corporations to equally promote freedoms and rights everywhere.”