Just when images of prime ministerial genitalia had receded from public consciousness, the term “Pig-Gate” has re-entered the lexicon. But this time it’s more consequential, if as absurdist as any situation that you might find in Chinese politics.
To restate the facts of the matter – on June 12, UBS Global Wealth Management chief economist Paul Donovan was discussing the inflation outlook during a podcast that was later transcribed on the UBS website. With an outbreak of African swine fever causing the price of pork (a key domestic inflation gauge) to rise in China, Donovan explained – and this is the entire paragraph:
Chinese consumer prices rose. This was mainly due to sick pigs. Does this matter? It matters if you are a Chinese pig. It matters if you like eating pork in China. It does not really matter to the rest of the world. China does not export a lot of food. The only global relevance would be if Chinese inflation influenced politics and other policies.
You’d have to go pretty far to find offence in those words. But that is exactly what happened. Chinese social media users latched onto the term “a Chinese pig”, inferring that Donovan was calling Chinese people pigs. “Chinese pigs”, right?
The nationalist tabloid Global Times noticed and posted about it on Sina Weibo, China’s Twitter-like social media network, saying the comment amounted to “suspected discriminatory remarks”. This caused a major stir, with one Weibo user saying there was nothing “innocent” in the comment, another suggesting “the Swiss are the pig”, while China Daily newspaper opined that, “Those who insult China should pay the price for their misdeeds, so as to deter others from insulting China in the future… Now the country is strong, we should have confidence and uphold the nation’s dignity.” (Though some suggested that the furore was unwarranted: as the website What’s On Weibo noted, author Deborah Chen said, “If you look at the context, you’ll see he’s talking about farm animals, and is not humiliating the people of the nation”, while others called finding the comments offensive “too sensitive” a reading.)
In any case, the wheels of business and bureaucracy had begun to turn. Although UBS swiftly apologised, with Donovan saying “I apologise unreservedly for any misunderstanding caused by my innocently intended comments” and UBS explaining that, “This comment was about inflation and Chinese consumer prices rising, which was driven by higher prices for pork”, the consequences continued to ripple.
The Chinese Securities Association of Hong Kong condemned the apologies as insufficient and demanded Donovan’s suspension. UBS subsequently said Donovan had taken “a leave of absence”, though this was not enough to prevent the Securities Association saying he had “created very bad influences” (sic). Haitong Securities – one of the largest securities houses in China – cut its ties with UBS, which was then also removed as an underwriter from a bond transaction worth up to $1bn by the state-owned firm China Railway Construction Corp (listed as #57 on the Fortune 500 in 2017). These losses are of material significance to UBS.
All in all, it’s essentially rather an absurd story. And yet if we look behind the headlines, the incident fits with a recurring Chinese strategy: weaponizing what it can deem offensive, in order to set the terms of debate, and so control what is said about it. The episode follows on from similar incidents including the Chinese government complaining about airlines listing Taiwan as a nation on their international maps and enforcing import controls against Norwegian salmon in retaliation for the country allowing the Nobel Committee to nominate dissident Liu Xiaobo for the Nobel Peace Prize (a decision in which the government had no say whatsoever).
South Korean firms from Hyundai to Lotte supermarkets suffered a backlash after Seoul’s installation of THAAD (Terminal High Altitude Area Defence) in 2017, which Beijing worried would be able to spy on its own missile programmes. The South China Morning Post reported shortly afterwards that “sales of Korean restaurants in the Beijing area have plunged by a third year-on-year and sales of Hyundai and Kia Motors have fallen by half”.
In attempting to enforce these self-declared red-lines, Beijing is striving to enforce a discourse air defence zone where only it can determine the terms of any discussion in which it features. This is the first step to cultural hegemony. This is important because the Chinese government has long sought to increase what it calls “soft power”, but like most Marxists Beijing has an ass-backwards understanding of the concept. Believing that cultural influence is a gauge of economic power (since hegemonic nations have strong soft power capacities), the Chinese government wants to declare its importance through a brute assertion of its status, rather than making itself appealing and seeing its estimation rise.
Unsurprisingly, this method isn’t particularly effective. No-one wants to feels bullied. But as this latterday Pig-Gate shows, the Chinese government is ready and willing to exploit what it deems, or can pretend to deem, offensive. Hence, we must get ready for, and find ways to manage, further such excursions. They are coming.