trol over the Communist Party, however was not tolerated, and human rights we such as the environment that were of increasing concern to citizens. T e government was also sensi- to the possibility of popular dissent arising from econom's seemedto dissatisfaction ush the othe government performance, as in the case of corruption. Despite the migrations on rights, Chawith One citizens enjoyed greater liberty than at any time in the postwar period. He honmarket environment was important not only because of the government Unimicron Involvement in business but also because of issues pertaining to human rights, intellecant Property, and the natural environment. The nonmarket environment was structured by the gual reside chical nature of government that persisted despite the devolution of authority to provincial e the Ku local governments. Since the government was not checked by opposition parties, elections, ganized interest or activist groups, some policies could be changed quickly , as in the case PLOADUn vironmental policy and the Labor Contract Law. The judicial system in China did not provi tile protection available in other countries, but citizens were increasingly turning to the course resolve disputes and enforce rights. The capabilities of the judicial system had improved. The importance of guanxi networks, not only between companies but also between busi Copynig less and government, complicated strategies of those companies new to China. Joint venture with domestic companies, most of which were enterprises owned by national, provincial, or loss government units, could also provide the guanxi networks and access needed to address non market issues. Joint ventures, however, posed their own set of problems, which led most foreign entrants to China to establish wholly owned subsidiaries. Will CASES Apple and Private Politics in China Apple had revolutionized mobile communications with its suppliers with the IPE, while Apple hasn't."34 He said, "The iPhone, iPod, and iPad, and its product introductions were company refuses to make the identities of suppliers public and closely-guarded secrets. The company also held information to fulfill its responsibility to disclose information about the on its operations close to its vest. Apple provided on its web environmental effects of suppliers' actions."$5 site an "Apple and the Environment" section with information The report was based on inspections of 22 factories on products and its environmental footprint. The section also believed to be Apple suppliers. Some information was also included a report on supplier compliance with Apple's policies obtained from people living near the factories. Li Chunhua of and workplace standards, including summaries of steps taken the environmental group Green Stone, who had inspected the as a result of its supplier audits. In contrast to Nike, however Kaedar Electronics (Kunshan) Co. Lid. factory and had inter- Apple did not release the audit reports or identify its suppliers viewed local residents, said, "Only about 50 people live in the This made it a target for environmental activists in China. village [Tongxin], and nine of them have had cancer."56 The The Beijing-based Institute of Public & Environmental report named seven factories supplying Apple and identified Affairs issued a 46-page report entitled "The Other Side of specific problems primarily concerning the disposal of hazard Apple II" that focused on Apple's Chinese suppliers that it ous materials including copper, cyanide, and nickel. The cited for discharging hazardous materials into the environment. Institute also released videos posted on a video sharing website The report said that Apple was "stubbornly evasive' and its refusal to discuss suppliers 'can only be seen as a deliberate of pollution at "suspected" Apple suppliers. The report con refusal of responsibility' for environmental issues.">2 The tained maps of suspected and confirmed suppliers and phot Institute had released a report earlier in the year to which Apple of environmental damage. Ma said, "We believe App had not responded, which resulted in the Institute focusing on customers cannot accept the fact that these faddish gadgets Apple. Ma Jun, director and founder of the Institute, said, made at the cost of poisoning the environment, harming c "Apple has made this commitment that it's a green company. munities, and sacrificing employees' rights."$7 So how do you fulfill your commitment if you don't consider Apple spokesperson Carolyn Wu responded to the r you have responsibility in your suppliers' pollution."$3 stating that the company "is committed to driving the hi "Mr. Ma said the IPE focused its latest report on Apple because standards of social responsibility throughout our other technology companies have been willing to discuss their 54Wall Street Journal, September 1, 201 1. 2 Wall Street Journal, September 1, 2011. 55 Chinadaily.com.cn, September 1, 2011. New York Times, September 2, 2011. 56 Ibid . 57 Ibid.Steve Dowling said, "We require that our he safe working conditions, treat workers with direct, and use environmentally responsible man- Chapter 16 . China: History, Culture, and Political Economy 471 Nesses wherever Apple products are made." ed to the Institute by letter and said that it took Pollution and the disposal of toxic wastes were regulated by the government, but Mr. Ma said, "The costs of flouting a ously but that there were inaccuracies in it. The regulation are lower than following it."61 for a "private conference call" with the Institute sponsors of the report. Preparation Questions the plants identified as an APP Apple supplier was (unshan) near Shanghai, where the report said the 1. What should Apple do about the Institute report? Does this have the potential to turn into a crisis? dtoxic wastes and noxious odors. Mr. Wang of 2. How much responsibility should Apple assume regarding its suppliers? local government said, "It's true that it smells level of pollution is actually better than national 3. Should Apple disclose the names and locations of its sup But when the wind blows, the smell is just pliers? Why or why not? 4. What effect might the report have on Apple's market in China? In the United States? 5. Formulate a strategy for dealing with this issue. Iby David P. Baron. All rights reserved. Reprinted with permission. Direct Selling in China illion people China represented an extremely selling.' It was said that 50,000 people had come to Wuhan ket for direct sellers such as Amway, Avon seeking jobs selling Xingtian Company's foot massaging Kay Cosmetics, Sara Lee, and Tupperware. machine. Some of these companies operated pyramid an s the restructuring of state-owned enterprises Ponzi schemes in which they profited by recruiting sellers a orkforces, providing an ample supply of selling them products rather than making sure that produ d in becoming direct sellers, many of whom were being purchased by consumers. Other companies du or sales calls. With the Asian and Russian unsuspecting consumers. In a front-page article the CI beginning in 1997 the supply of potential Daily said that these companies "have been behaving b onnel increased further. In 1995 Amway getting involved in underworld crimes and preying on inn in Guangzhou and began sales in China. By people through their superstitions.' On April 21, 1998, the State Council published a 000 independent sales agents in China tive banning all direct sales in the country. The directive ue of $178 million. 62 Avon's revenue in "Criminals have used direct selling to set up sects an illion. spread superstition and carry out illegal activities, a such as Amway and Avon operated by the country's social stability." The directive expres ent sales agents who bought product from cern about the massive sales meetings of direct sellers standard apped and chanted to build enthusiasm. The selling had attracted people, officials of th