Japanese companies face dilemma over Beijing Winter Games

Japanese companies are in a dilemma over the upcoming Beijing Winter Olympics and Paralympics, overshadowed by a spate of diplomatic boycotts and the coronavirus pandemic.

Public awareness of companies’ commitment to human rights is increasing after the United States and some other countries decided not to send government officials to the Games in protest against China’s alleged human rights abuses.

This has made it risky for companies to actively deploy marketing campaigns related to the Winter Games. The Beijing Olympic opening ceremony is slated for Feb. 4.

Given that the time difference between Japan and Beijing is just one hour, people in Japan do not need to worry much about timing their viewing of the Games. This would create an ideal opportunity for Japanese companies to cash in on the Games under usual circumstances.

However, due to the global spread of the omicron coronavirus variant, only spectators from mainland China will be admitted to the Games.

“Our company has been gearing up for the Games, but emotionally, the momentum has not built up as much,” because the Tokyo Olympics ended only five months ago, a source said.

“There will be no tours from Japan to watch the Games. Replacement demand for television sets will also be limited,” said Toshihiro Nagahama, economist at Dai-ichi Life Research Institute Inc.

The Winter Games may boost sales of some sports gear and visitors to ski resorts, depending on the performance of Japanese athletes.

But a company official said that given the conflict between China and the United States, the situation is very sensitive, making it difficult for the company to make a move.

Countries that have declared diplomatic boycotts of the Games allege China’s human rights abuses in the Xinjiang Uyghur autonomous region and Hong Kong.

Against this backdrop, companies are facing stronger pressure to tackle the issue. They need to explain to investors and consumers whether there is no forced labor or child labor across their supply chains.

China is a huge market. Many Japanese companies have production bases there.

Japanese companies “will need to reconsider their transactions (in China) if any human rights-related problems are found,” said Kengo Sakurada, chairman of the Japan Association of Corporate Executives, or Keizai Doyukai.