Costco Latest US Company Facing Chinese Ire Over Taiwan Stance

On May 9, American wholesale company Costco signed an agreement with Chinese Shanghai Pudong Kangqiao group to set up its first store in China. However, it seems the going will not be easy for the wholesale giant in the Asian country as it recently joined a list of companies that have come under fire due to their stance on Taiwan.

It all started two years ago when Formosan Association for Public Affairs — an organization that supports Taiwan’s right to be recognized as an independent country — complained Costco’s online job application did not include Taiwan in a list of countries.

Responding to this, Costco Wholesale Corp.’s senior vice president of human resources and risk management, Patrick Callans, wrote a mail April 14, 2016, saying, “We have retail locations in Taiwan and very much consider it a country.”

Formosan Association posted the letter on Facebook. This letter started circulating on Chinese social media last week after Costco’s agreements with Shanghai Pudong group were inked. An article by state-run newspaper People’s Daily even included comments by a reader who claimed Costco should apologize for its stance.

The most number of anti-Costco comments were posted on Chinese social media platform Weibo.

A user wrote, “There is nothing small when it comes to the national interest. … We should firmly boycott and stick to the One China principle,” Wall Street Journal reported.

However, Sen. Marco Rubio came out in support of Costco and posted on Twitter about United States companies and people “being censored by the Chinese govt with threat of losing access to market.”

The Taiwan Ministry of Foreign Affairs retweeted his comments and thanked him for the support.

Not the first case

Costco, as mentioned earlier, is not the first American company that is facing issues — mainly from Chinese social media, which is reportedly quite influential in the country’s corporate behavior — due to their viewpoint on Taiwan.

Retailer Gap offended China when the company sold t-shirts depicting a map of the country, without Taiwan, the disputed islands in the South China Sea and parts of Tibet and Xinjiang. The apparel company was quick to apologize when it came under China’s ire.

A post on its official Chinese social media account on May 15 said: “We were informed the design of a Chinese map on a Gap T-shirt sold in some overseas markets was incorrect. … The product has been withdrawn from the Chinese market and completely destroyed.”

Gap added it respects China’s territorial integrity and sovereignty. The company opened their first store in the country in 2010 and now has 27 shops there.

Hotel chain Marriott International also had to apologize earlier this year after Chinese government shut down its website because an online questionnaire suggested some regions were separate countries.

China’s Cyberspace Administration said the hotel “seriously violated national laws and hurt the feelings of the Chinese people” as a survey listed Tibet, Taiwan, Hong Kong and Macau as separate countries.

The company immediately issued a statement saying, “Marriott International respects the sovereignty and territorial integrity of China. We don’t support separatist groups that subvert the sovereignty and territorial integrity of China. … We sincerely apologise for any actions that may have suggested otherwise.”

Marriott has over 100 hotels in the Asian country.

Another American company that faced a similar issue in January was Delta Air Lines when it listed Taiwan and Tibet as countries on its website.

The Civil Aviation Administration of China demanded the airline issue an “immediate” apology, which it did.

“Delta recognizes the seriousness of this issue and we took immediate steps to resolve it,” the company said in an email, Reuters reported. “It was an inadvertent error with no business or political intention, and we apologize deeply for the mistake. As one of our most important markets, we are fully committed to China and to our Chinese customers.”

Since China continues to be the world’s largest consumer market, expulsion from it would mean a major loss for foreign companies. This is the major reason they are quick to issue apologies and statements when asked for.

Taiwan has governed itself since 1949; however, China regards it as part of the country.