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By allowing netizens to define its cross-Strait policy, Beijing risks losing control of the situation and could cause severe harm to an already tense relationship.

China’s punitive “strategy” on Taiwan once again escalated this week after the Taiwanese coffee chain 85℃ Bakery Cafe came under assault by Chinese ultranationalists over a visit to one of its stores in Los Angeles by Taiwanese President Tsai Ing-wen.

The ire was sparked by President Tsai’s visit to the coffee shop, where staff, excited to be meeting the democratically elected head of state, gave her store paraphernalia as a gift (Chinese disinformation claimed the package was stuffed with money).

After photos of the encounter were made public, Chinese ultranationalists kicked into action and accused the chain, which operates 859 stores in China and made 64% of its Q1 revenue there, of supporting Taiwan independence. Threats of a boycott (described by the South China Morning Post as a “zealous online campaign”) were sent to the company’s Weibo account, and its Taiwan website was was knocked offline by what is believe to have been a cyber attack. The next day, Long Mingbiao, deputy director of the State Council’s Taiwan Affairs Office (TAO), said China would “never allow” a company that (purportedly) supports Taiwanese independence to operate in China.

Thus threatened, the company — which was founded in 2004 and is now registered in the Cayman Islands — issued a three-point apology on its China website. The company thanked the Chinese for “educating” it, reaffirmed its “firm support” for the so-called “1992 consensus,” and stated its hopes for the “peaceful unification” of the two sides of the Taiwan Strait while “opposing any behavior and remarks that separate the brotherhood of the two sides.”

Company shares plunged on Thursday after Chinese netizens remains unsatisfied with the company’s press release. 85℃ Bakery Cafe has also been removed from a popular food delivery app in China.

As with previous incidents involving pressure on international firms in China, the coffee chain’s genuflection to Beijing read like it was scripted by the Chinese Communist Party (CCP). The idea that companies have to abide by the “consensus” (a construct whose very existence is dubious and which has hitherto been a matter between governments and political parties, not the private sector) is absurd, and confirms that the whole affair was meant to put pressure on the Tsai administration ahead of the 2020 general elections. It seeks to portray President Tsai as noxious — even serving her a cup of coffee can cause you serious headaches, not to mention cost you millions.

The idea that such acts, in the aggregate, will undermine Taiwanese morale is rather unconvincing. So far these have instead inflamed passions in Taiwan and reaffirmed their desire for a separate destiny (as Richard Bush of the Brookings Institution in Washington, D.C., observed recently, “if this is a kind of family that Taiwan is a part of, I’m not sure if it is a very good family”).

One worrying aspect of this incident is that — and this is not the first time — Beijing appears to have allowed netizens to define its cross-Strait policy. As with the boycotts (or threat thereof) of several Taiwanese entertainers accused of supporting Taiwan independence (some of those attacks were led by the Chinese Communist Youth League), or criticism of a Gap T-shirt sold in Canada that showed an “incomplete” map of China, the assault on 85℃ Bakery Cafe was the result of bottom-up pressure, which by force of circumstance eventually turned into official policy. Having set the tone on cross-Strait relations, the CCP could not de-escalate: instead, it had to reflect the “wishes” of “the Chinese people.” This is a very dangerous dynamic, as it gives uncontrollable forces the power to compel the authorities, hostage to the furies they themselves unleashed, to take action even when doing so will prove counterproductive.

“If this is a kind of family that Taiwan is a part of, I’m not sure if it is a very good family.” — Richard Bush

As I have argued before, China’s bullying is an act of frustration. It stems from the absence of a viable Taiwan policy, and Beijing’s stunning lack of “soft power.” (The same can be said, of course, of its growing reliance on “sharp power.”)

Ultimately, this is a recipe for irrational decision making, and fools are those who believe that such behavior will remain limited to China’s dispute with Taiwan. No foreign firm operating in China is safe anymore, as all could become the targets of netizens for printing the “wrong” map, meeting the “wrong” people or saying the “wrong” thing. Our apathetic response to China’s assault on our freedoms has put us in a situation where Chinese ultranationalists can now dictate what we do, say, meet or print anywhere — even on our own turf, even in our freedom-loving liberal democracies — and pressure Chinese authorities to punish us if we fail to agree to their Orwellian worldview. This exposure adds yet another reason why companies should think very carefully about establishing a presence in China. No doubt it can be lucrative for a while, but as China becomes more assertive and expands its list of “core interests,” the risks of their operations becoming collateral to the conflicts that will inevitably arise, as airlines and hotel chains are now discovering, will increase commensurably.

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