Disney Can’t Afford for You to Know It’s in Business with China’s Communist Party

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In recent years, The Walt Disney Company has promoted itself by touting its storytelling prowess, but there’s one story Disney isn’t telling because the company can’t afford for fans to know the truth.
The Walt Disney Company - Wikipedia

Credit: Wikipedia

During this year’s meeting, shareholders will make a decision about whether The Walt Disney Company should disclose the “China Risk Report,” a document that would reportedly make it clear for investors and shareholders to see Disney’s operations and activities within the Chinese borders and just how dependent the company is on the Communist country.
According to Global Economic Report, The Walt Disney Company will face multiple shareholder proxy votes during the April 3 shareholders’ meeting. Those include votes related to the company’s charitable contributions and political contributions, as well as its business dealings in China. The proxy vote related to Disney’s operations in the Red Dragon has been proposed by the National Legal and Policy Center (NLPC), a public interest non-profit organization that doubles as a Disney shareholder.
The NLPC is asking that Disney comply with the following requests:

“[To] report annually to shareholders on the nature and extent to which corporate operations depend on, and are vulnerable to, Communist China, which is a serial human rights violator, a geopolitical threat, and an adversary to the United States. The report should exclude confidential business information but provide shareholders with a sense of the Company’s reliance on activities conducted within, and under control of, the Communist Chinese government.”

Disney would be hard-pressed to find many American citizens who feel that the NLPC has been unfair in its description of China as a “serial human rights violator, a geopolitical threat, and an adversary to the United States.” Political affiliations aside, daily international news reports chronicle China’s repeated violations of human rights, the threats it poses to other nations and peoples around the world, and the Chinese government’s disdain for the United States. These are the simple, undeniable, proven facts.

What Hong Kong Unrest Tells Us About China's Plans for the Rest of the  World | The Heritage Foundation

Credit: The Heritage Foundation

The Federal Bureau of Investigation refers to the aforementioned geopolitical threat as “The China Threat” and states that “the counterintelligence and economic espionage efforts emanating from the government of China and the Chinese Communist Party are a grave threat to the economic well-being and democratic values of the United States” but makes it clear that “the adversary is not the Chinese people or people of Chinese descent or heritage,” saying instead that “the threat comes from the programs and policies pursued by an authoritarian government.”

The U. S. State Department reports that China’s “documented human rights abuses include coercive population control methods, forced labor, arbitrary detention in internment camps, torture, physical and sexual abuse, mass surveillance, family separation, and repression of cultural and religious expression.”

Two questions immediately arise: (1) Why is Disney actively seeking business opportunities in a country where such atrocities are commonplace, and (2) Why isn’t Disney already disclosing its business dealings in Communist China to its shareholders, regardless of a proxy vote? But sometimes the most obvious, common sense questions are ones that go unanswered, often because the answers ultimately require honesty, accountability, a change of course, and sometimes a complete “abort mission” initiative, but even the most diehard, devout Disney fanatics have to admit that’s sadly not The Walt Disney Company of today.

Shanghai Disneyland | Shanghai Disney Resort

Credit: Shanghai Disney Resort

The company is currently in the midst of a massive workforce reduction as part of a greater cost-cutting initiative aimed at saving Disney more than $5.5 billion. And it’s not because the company had a bad quarter–not by a long shot. In February, CEO Bob Iger and CFO Christine McCarthy shared numbers from the company’s fiscal first quarter earnings report, disclosing billions in revenue, but there apparently were the right amount of billions, as Iger followed the report with news that sent shockwaves down Wall Street and across the Disney kingdom of fandom: effective immediately, Walt’s beloved company would undergo a massive restructuring, thousands of Cast Members would lose their jobs, and the effects would be felt across Disney’s entities around the globe. The “billions” were not “billions enough.”

And if the thought of laying off thousands of unemployed Cast Members who might eventually go hungry and be unable to care for their families while C-level execs at Disney take home multi-million-dollar bonuses in addition to their 5- and 6-figure monthly salaries draws no compassion from those execs, why then are shareholders and fans to think that China’s rap sheet of atrocities would make the company think otherwise about its business ventures within the Middle Kingdom? Money’s money. And there’s lots of it to be made in China, so Disney’s working hard to break through some of the barriers within the Communist nation and tap into additional revenue streams, garnering an even greater profitability for the company.

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One report suggests that “Disney’s entanglement with the Chinese Communist Party (CCP) is nearly unrivaled.” Go ahead, read that again. Disney’s dealings with the Chinese Communist Party is nearly unrivaled. The company leans on the CCP for access to China’s multi-billion-dollar film and streaming market. Disney also depends heavily on the CCP to manufacture its products, and for the party’s permission to continue operating its two Chinese Disney Resorts: Hong Kong Disneyland and Shanghai Disney Resort. In China, it’s the CCP that lays out the terms on which American-owned organizations like Disney are permitted to operate.

The CCP requires much. China’s government is a dictatorship, not a democracy, and companies that want to operate within China’s borders are met with multiple hoops through which to jump–perfectly, flawlessly, and without compromise. Outside of that, Disney’s access to China’s film market would be restricted. Delays would follow at the manufacturing plants where Disney’s merchandise is made, and soon after, there would simply be no Disney merchandise made in China.

Let’s add one more question to the aforementioned questions about Disney’s operations in China and the company’s lack of disclosure of those operations: how many of Disney’s shareholders know that the company’s Shanghai Parks are not owned by Disney? Do shareholders know that The Walt Disney Company is engaged in a joint venture with the Chinese Communist Party that allows for the operation of the Shanghai Disney Resort? And it’s not an equal split, by the way. Instead, the CCP has 57% ownership while Disney holds only 43% ownership. So which owner has the final say on the operations and goings-on inside the resort that most Parks fans think is owned by Walt’s company? Exactly.

Discover Shanghai Disneyland: Gardens of Imagination | Disney Parks Blog

Credit: Disney Parks

Cast Members at Disney’s Shanghai parks “attend [CCP] lectures during business hours,” “display hammer-and-sickle insignia at their desks,” and even participate in “singing contests” organized by officials with the CCP. It bears mentioning that Disney’s investment in the Shanghai joint venture, aka “state-owned enterprise” is a whopping $5.5 billion. One wrong move, and CCP leadership can pull the proverbial rug out from under Disney, leaving it with little to no recourse.

Should Disney release the so-called “China Report?” The answer is an emphatic, resounding “YES!” followed by “why isn’t the company already being forthcoming with its Chinese business pursuits, especially with shareholders? Disney’s board of directors reports to the company’s shareholders, not to President Xi and the Chinese Communist Party, and if The Walt Disney Company is more concerned with keeping itself clear of the CCP’s ire than it is with being transparent with its American shareholders, those shareholders have options too.

It’s worth restating that Disney literally cannot afford for American shareholders to know just how deep the Disney/CCP relationship goes, but Americans deserve to know. Here’s hoping the company will do what’s right for its shareholders instead of what preserves Disney’s access to the CCP-owned Chinese marketplace.

About Becky Burkett

Becky's from the Lone Star State and has been writing since she was 10 and encountered her first Disney Park when she was 11. It was love at first Main Street Electrical Parade. Joy is blank lined journals, 0.7 mm pens, and all things Walt, Woody and Buzz, PIXAR, Imagineering, Sleeping Beauty (make it blue!), Disney Parks history and EPCOT. At Disney World, you'll find her croonin' with the birdies at the Enchanted Tiki Room or hangin' with Woody and the gang at Toy Story Land. If you can dream, you really can do it!