Categories Search

China to punish airlines for failing to respect territorial claims

Video Preview

Foreign airlines that refer to Taiwan, Hong Kong or Macau as being independent from China could face punishment under a new social credit regulation issued by Beijing late last year, reported South China Morning Post (Hong Kong).

According to a report by The Washington Post, the Civil Aviation Administration of China sent a letter to 36 carriers last month saying that companies that failed to acknowledge the one-China principle may be subjected to closer administrative scrutiny or even given demerits on their credit records.

The article included a copy of a letter, written in Mandarin, which the newspaper said it had obtained from United Airlines, one of the original recipients. Phone calls and faxes from the South China Morning Post to the administration on Sunday and Monday went unanswered.

Koji Nagata, United Airlines’ director for Asia-Pacific corporate communications, told the Post, however, that the company had passed the letter on to the White House.

“As to this matter, we have deferred it to the US Government since this is a diplomatic issue to be resolved among governments,” he said in an email.

On Saturday, Washington, which is embroiled in a trade dispute with Beijing, issued a strongly worded statement criticising the CAAC’s demands as “Orwellian nonsense”. China’s foreign ministry hit back on Sunday afternoon, saying all foreign businesses must respect China’s sovereignty and the feelings of its people.

The US embassy in Beijing joined the war of words by publishing a version of the White House statement in Mandarin on Weibo, the Chinese equivalent of Twitter.

As of Monday afternoon, the post had attracted more than 23,000 comments, most of them critical of the US.

“Go away if you are not willing to do business, or abide by our laws,” said one, while another called for independence for the US states of Hawaii, Alaska, California, Texas and New Mexico.

A report by The Sydney Morning Herald on Monday said Australia’s Foreign Minister Julie Bishop had warned Beijing against using threats to pressure Qantas to adopt the Communist Party’s political line by referring to Taiwan as part of mainland China rather than a separate country.

Qantas confirmed last week it was one of the carriers that had received a letter from the CAAC.

While the punishments foreign airlines might face for breaching the new social credit regulations are vague, Alexander Wolf, a former US diplomat who used to work in the Chinese capital, said it was unlikely any of them would deliberately go against Beijing’s wishes.

“You would expect the Chinese government to retaliate, such as shutting down websites or banning certain routes … but there is no reason why these companies wouldn’t comply because their priority is to the shareholders, not to abide by US government foreign policy,” said Wolf, who is now the Hong Kong-based senior emerging market economist for Aberdeen Standard Investment.

Sow Keat Tok, an international relations professor at the University of Melbourne in Australia, said the warning from the aviation administration was simply the latest effort by Beijing to impose “soft sanctions” on foreign companies in line with its rising economic power.

“[President] Xi Jinping has been building up expectations over the past five or six years, so China has to show it is a big power, with a big say in world affairs, and can defend its interests,” he said.

Meanwhile, Wang Yi-kai, a Taiwanese social activist, who launched the satirical “Apologise to China” contest on Facebook in 2016, said that amid rising nationalist sentiment, even those foreign companies that abided with Beijing’s one-China policy would find themselves being reprimanded for some other misdemeanour.

“China is like a crying baby that is demanding sweets,” he said. “You can’t just keep giving in without explaining what is right and what is wrong, otherwise it will only cry louder in the future.”


The US Department of State on April 27 rebuked Beijing for the threats it made to two US airlines over the way they list Taiwan on their Web sites, saying: “We object to Beijing dictating how US firms, including airlines, organize their Web sites for ease of consumer use.” – reported Taipei Times (Taiwan).

China also threatened to hack the Web sites if the airlines failed to make the changes, but the department urged the airlines not to comply.

As of press time last night, neither United Airlines nor American Airlines have made changes to their Web sites. Australia’s Qantas Airways has also not changed its site, despite earlier promises to do so.

China has traditionally forced companies operating there to comply with their position on Taiwan in exchange for access to the Chinese market. With airlines, which cannot simply overlook geographical realities for ideologies, this strategy cannot work.

While some companies might be willing to sacrifice Taiwanese customers for Chinese ones, an airline flying to Taiwan is not only serving Taiwanese passengers, but also people from around the world who are flying to and from Taiwan.

People worldwide are aware that Taiwan is not part of the People’s Republic of China. When they are looking to fly to Taiwan, if they do not see it listed as a country option, it is not improbable that they would assume the airline does not fly here, rather than looking for Taipei under the site’s section for Chinese airports. This would mean lost revenue if passengers use competing carriers.

Airlines of course would not want to be barred from operating in China, but if that is the consequence of non-compliance, it would likely not have a large effect on the airlines’ revenues.

On a list of the 10 busiest airports in the world in terms of total passenger numbers published last year by the Telegraph, only one is in China: Beijing Capital International Airport, which serves about 90 million passengers annually. Four of the airports are in the US, including No. 1, Hartsfield-Jackson Atlanta International Airport, which is used by about 100 million passengers per year.

A US airline could easily be kept busy with its domestic flights alone. United Airlines flies to all 10 of the world’s busiest airports and more through its partnerships with other international carriers. The company is therefore not likely to be very hurt by the loss of Beijing as a destination.

It would also set a dangerous precedent if China were to be allowed to dictate the terms of international aviation practice. Aviation safety would be at risk, as is evidenced by China’s unilateral activation of new flight routes near the median of the Taiwan Strait earlier this year.

US President Donald Trump’s administration has shown it is losing patience with China’s incessant unilateral decisionmaking on issues that affect other nations.

The department’s statement is just one in a series of moves by Washington. Trump in March signed off on the Taiwan Travel Act, ignoring China’s threats, and the two nations are on the brink of a trade war.

Last week, a New York Times article said that US officials were considering restricting Chinese citizens from performing sensitive research at US universities and research institutes. The proposal comes amid growing concern over Chinese theft of US research and technology, particularly with regard to military applications.

Moving forward, it will be of growing importance for companies to refuse to comply with Chinese demands, such as compliance on the Taiwan issue and providing access to patented technologies and customer information.

As China becomes a less attractive place to do business and as more companies decide to leave the Chinese market, Beijing will be forced to soften its stance or risk isolation.

show source

Rating: (0)
Location: Show map
Location: Show map
Share report:
Share on Facebook
If you want to buy or a sell a report
go to marketplace

Comment report: