Hedge fund manager Kyle Bass, a frequent critic of the Chinese Communist Party, blew up American companies on Thursday speak out against social injustices in the US, but fail to take firm positions on human rights violations in China.
“If the US national security were left to the American corporation, we will all speak Chinese very quickly,” said the founder of Hayman Capital Management from Texas on CNBCs “Squawk Box.”
In particular, bass ripped Nike CEO John Donahoe for comments made during the company’s conference call with Wall Street analysts last week.
According to a FactSet transcript, Donahoe said, “We have been in China for over 40 years. Phil [Knight] In the beginning we invested a lot of time and energy in China, and today we are the largest sports brand there and a brand for China and for China. ” Knight is a co-founder of Nike under the name Blue Ribbon Sports in 1963. “We have a strong consumer franchise in China and they feel very attached to our brand, so we will continue to invest,” added Donahoe.
Bass described the comments as “actually pretty incredible”. He added, “Look, his job is to maximize profitability. They are social justice fighters wherever they see fit until it hits their wallet.”
Nike faced backlash Earlier this year, after she said in a statement that she was “concerned” about allegations of forced labor in Xinjiang, a western region home to Uighur Muslims and other ethnic minorities.
In January, 24 hours before Joe Biden was sworn in as President, then Secretary of State Mike Pompeo refers to the treatment of the Uyghurs by the Chinese government in Xinjiang “Genocide.” The administration of the former president Donald Trump also took a hard line in trade with China – raising tariffs on Chinese imports, which led to mutual taxes on US imports there, before a “Phase one” trade agreement was achieved in early 2020.
In March of this year, the Biden administration also did sanctioned two Chinese government officials for her alleged role in “arbitrary detention and serious physical abuse, among other serious human rights violations against Uyghurs”.
In addition to China’s crucial role in supply chains, the country has become an important consumer market for many American companies. China, the one Population of 1.4 billion people, today has the second largest economy in the world.
Despite its economic boom since opening to Western investment in the Post Mao era“China is not a democracy, and Beijing’s complete control of the economy puts companies, especially American firms, in a delicate position to avoid the wrath of the Chinese government.
Bass said he’s trying to walk the fine line between remaining in the president’s economic grace Xi Jinping while it’s getting louder and louder on social issues in the US, it’s hard to justify.
“Whether or LeBron James or Nike or Disney, they’ll be social justice campaigners here in the United States because it’s fashionable, “said Bass, who became famous for his successful wagering on sub-prime mortgages during the 2008 financial crisis.
“When it comes to a regime that the US State Department has labeled genocide and crimes against humanity, their lips are sealed,” he added. “They are actually from China, for China.”
Nike, representatives from James and Disney did not immediately respond to CNBC’s request for comments.
James, an NBA superstar who signed a long-running advertising deal with Nike, was criticized in 2019 for responding to the controversy surrounding then-general manager of the Houston Rockets, Daryl Morey. Morey’s tweet in support of Hong Kong was pro-democracy protesters hit with severe setback from the Chinese government.
The Los Angeles Laker had said he didn’t feel educated enough on the tension between Hong Kong and mainland China, to be right. Many felt this was an inadequate position since James’ story of speaking against police violence and racism in the USA. More recently, James has campaigned for the right to vote.
Last year, Disney became hot for thanking the government agencies in the Xinjiang area in credits for his remake of “Mulan”.
Disney CFO Christine McCarthy defended the platoon as usual to say that it is customary in the film industry to recognize “the national and local governments that allow you to film there”. The credits “recognized both China and locations in New Zealand. And I would just leave it at that, but that created a lot of problems for us,” she said at a Bank of America conference in September.
Bass said Washington leaders must show “leadership” over Beijing’s human rights abuses because US corporations will not stop pursuing “the treasure trove” of access to China’s economy.
“It requires the State Department, the Department of Commerce, the National Security Complex, the National Security Council to come together and actually make some difficult decisions. Don’t just lead with rhetoric and don’t do anything on the other side because corporate America won’t. “Stop chasing profits,” he added.