Nike's Dropping Sales in China Shows that Capitulation to Tyranny is a Lose-Lose Strategy

Nike now finds itself being squeezed on both ends, at home, and in China.

Nike stands out among all American companies that have kowtowed to Beijing in exchange for accessing the Chinese market. Last year, Nike’s CEO John Donahoe unabashedly declared during an earnings call with Wall Street analysts that “Nike is a brand that is of China and for China.” His declaration came right after the company expressed some vague concern over the forced labor issue in Xinjiang, China. The company has been criticized for valuing profit more than human rights at home. But Nike’s latest financial information suggests that the company’s capitulation to Beijing may not be a profitable strategy in the long run anyway. 

The Wall Street Journal reported that Nike’s growth in China has slowed down, and the company is losing ground to China’s home-grown brands. Nike’s sales in China fell 20 percent in the latest quarter, which ended on November 30, 2021. Meanwhile, the revenue of Anta, a Chinese sportswear company, “rose 56% in the first half of 2021 compared with the same period…