Boycott Watch  
March 24, 2008
The politics and economics of the 2008 Beijing Olympics related boycott.
Part 1 in a series
Summary: The U.S. Economy can's afford the boycott
    There has been much excitement in the media in anticipation of the 2008 Olympics in China, much of it based on two factors: First, U.S. nationalist pride in support of our athletes competing internationally, as happens every Olympic year; and also the public relations campaign by China promoting itself and the "coming out party" we have heard so much about in the media.

    The boycott calls over the Olympics stem from a few reasons, mainly freedom for Tibet, a nation China invaded in 1949 for its natural resources. The subjugation of the Buddhist monks in Tibet has been a leading topic of human rights activists for decades. There is also issue of general human rights under communist rule, yet China is slowly become more capitalist despite its communist leadership, thus hope for more change.

    Separately, the rapid industrialization of China has resulted in a major pollution problems, thus many Olympic athletes are worried air pollution from Chinese factories will degrade their performance capabilities, and as such many Olympic athletes are not planning to arrive in China until the last possible moment, meaning many will forgo the opening ceremonies, as opposed to traditionally arriving early to acclimating themselves to the venue.

    The U.S. State Department has now weighed in, saying that tourists should limit themselves to official Olympic areas for safety concerns. This stems from a change in attitude among the traditionally pacifistic Tibetans who have physically clashed with Chinese soldiers recently, presumably knowing television cameras were nearby. The State Department fears that these clashes may spread beyond Tibet.

    All in all, while the media was excited about the Olympics in China, the reality of what will potentially be the most troubled Olympics in history is sinking in for many Americans. At the same time, businesses which have invested in the Beijing Olympics are publicly discounting such fears in order to protect their financial interests.

    Stephen Spielberg, for example, has been a Free Tibet activist for many years, yet he engaged in a PR contract with China, and then suddenly backed out of his dealings with China, which makes Boycott Watch suspect his pullout was a planned PR move all along.

    Internationally, Prince Charles of England came under fire for being the first world leader, or at least figurehead in his case, to announce he was not going to attend the opening ceremonies, a virtual who's who of world leaders. Global politics is playing a role in these decisions, as the leaders of some countries have to weigh the cost of a no-show snub for their economy, as China has became a global financial and manufacturing superpower that may not be beyond revenge games.

    President Bush, for one, is going to the opening ceremonies for the economic fear reasons, as the U.S. cannot afford the chance that China may pull back its part in financing of the U.S. national debt - the U.S. economy is simply held hostage not just by the foreign dictators who control the U.S. economy via oil, but also those who control the U.S. economy via the mounting national debt which is resulting in the declining dollar on the world currency exchanges. More significantly, the US relies on China for the manufacturing and distribution of consumer goods - while China relies on the US as a market for its goods, the US economy relies on Chinese goods far more for its economic stability and growth, as low priced goods have played a significant role in the growth of the buying power in the U.S.

    The concern of Boycott Watch, in this case, is how such a boycott would affect the US. When analyzing this, it is important to remember that many business people who are claiming there will be no effect in the U.S. may in fact have a vested interest in the failure of such a boycott. Billions and billions of dollars have already been invested in the Olympics in the form of sponsorships and broadcast / reporting rights, which is also why the U.S. simply cannot afford to boycott the China Olympics, especially considering the failure of the total Olympics boycott by the Carter administration.

    If, for example, there was a U.S. consumer boycott of the Olympics, a 10% drop in anticipated television viewership could have a devastating effect on the return on investment of some advertisers, and a 20% drop would not just mean that television broadcasters may lose significant revenue, but also that advertisers and sponsors may not see the return on their investment either. In the case of television, there is a significant upfront investment to broadcast the Olympics which must be met just to break even, and the same applies to official sponsors.

    In essence, China has been very concerned about its image and is doing everything in its power to put on a dog and pony show, while at the same time the U.S. businesses, thus the US economy, can not afford a sluggish return on investment in the China Olympics, despite geopolitical concerns, especially for the Republicans before just before the presidential elections.

    President Bush will, therefore, have to promote the Olympics for several reasons despite the Presidents personal objections considering his human rights stance. This is primarily because the U.S. economy can not afford a fight with China right now, making the November presidential elections a minor consideration in comparison, but part of the overall concern for both Republicans and Democrats, where Democrats are likely to question President Bush his China policy once the Democrats have their nominee.

    The US put itself into a position where a boycott of the Olympics in China can be harmful to its own economy, but considering the growth of Olympics boycott activity over human rights issues, American consumers may not see the national economic impact at all. It is still too early to determine who will ultimately boycott the Olympics and of that boycott will amount to much, but consumer boycotts have been known to be very successful, thus explaining the fear by sponsoring businesses, media accountants and even politicians.

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