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IOC’s middleman role in Peng Shuai case may invite boycotts of 2022 Olympics in Beijing

November 23, 2021, 10:40 AM UTC

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On Sunday, the International Olympic Committee announced that Chinese tennis star Peng Shuai had assured IOC president Thomas Bach in a video call that she is “safe and well,” and living at her home in Beijing.

A photo of the encounter, published on the IOC website along with a statement summarizing their 30-minute conversation, shows Peng smiling and seated in a room surrounded by brightly colored stuffed animals. According to the IOC, Peng, a three-time Olympian, told Bach in the call that, while she appreciated the world’s concern about her welfare, she “would like to have her privacy respected at this time.”

The statement vaulted Bach and the Olympics governing body into the center of global controversy over Beijing’s treatment of Peng following a post to her Weibo social media account accusing a senior ex-government leader of coercing her into sex. The IOC later described Bach’s call with Peng as an exercise in “quiet diplomacy.” But the effort inspired noisy criticism of the organization from human rights groups, Western political leaders, and athletes—and rekindled calls for a global boycott of the Winter Olympic Games, set to begin Feb. 4 in Beijing.

Peng’s 1,600-character Weibo post, published Nov. 2, is extraordinary. It alleges that she was assaulted by Zhang Gaoli, who served as China’s senior vice premier from 2013 to 2018. The post claims Zhang first pressured Peng to have sex with him more than 10 years ago in Tianjin, and describes a complicated, on-again, off-again relationship that ended when Zhang was promoted to the Politburo Standing Committee, China’s highest ruling council. Then three years ago, after Zhang retired, the post alleges, he sought Peng out, invited her to his home, and again forced her into sex. (Zhang has not responded to the allegations publicly.)

If Peng’s claims are unprecedented, Beijing’s response to them is not. Censors scrubbed Peng’s post from China’s Internet within minutes. Peng disappeared from public view for weeks. China’s state media have blacked out all discussions of her allegations and fate.

Outside China, that clampdown appears to have backfired, prompting human rights organizations and global tennis stars including Serena Williams, Naomi Osaka, and Chris Evert to express concern on social media with the hashtag #WhereIsPengShuai? The White House and the United Nations called on the Chinese government to provide proof of Peng’s whereabouts. The Women’s Tennis Association demanded an investigation into Peng’s allegations and threatened to pull tournaments out of China, potentially sacrificing billions of dollars in sponsorship money, unless Beijing can confirm that she is safe.

Peng re-emerged last week, but in an oddly stilted fashion. On Wednesday, the state-owned broadcaster China Global Times Network released what it said was an e-mail Peng had sent to WTA chairman Steve Simon in which she said the assault allegations were not true. “I’m not missing, nor am I unsafe,” it read. “I’ve been resting at home and everything is fine. Thank you again for caring about me.”

Simon expressed skepticism about veracity of the statement. “I have a hard time believing that Peng Shuai actually wrote the e-mail we received or believes what is being attributed to her.” Others said the e-mail sounded like a hostage note.

Over the weekend, a series of photos and videos of Peng—attending a popular restaurant in downtown Beijing, signing autographs at a junior tennis tournament—began popping up on Twitter. But the accounts posting those images all were individuals connected to China’s state-owned media or state-run sports system.

The call with Bach was Peng’s first known direct contact with officials outside China since making her allegations. The IOC declined media requests to release a full video of the conversation.

Steve Tsang, a Chinese politics professor at the SOAS China Institute, told Fortune that in becoming a middleman between China and the world in the Peng case, the IOC may be undermining its own credibility. The IOC’s call with Peng may “generate more pressure on democratic governments to boycott diplomatically the Winter Games,” he said.

President Joe Biden said Thursday that the U.S. is considering a diplomatic boycott of the Olympics, meaning that no U.S. officials would be dispatched to attend the games. U.S. lawmakers from both parties have urged a diplomatic boycott to protest Chinese human rights abuses, though that is a position many advocated before the Peng affair, and the gesture would be mostly symbolic. Beijing, clinging resolutely to its “COVID zero” pandemic policy, already has decreed the games off-limits to foreign spectators.

Bloomberg columnist Clara Ferreira Marques argues that Beijing’s clumsy attempts to quash international outrage over its treatment of Peng Shuai “show just how hard it is for China to balance domestic imperatives and international goals—and what it will sacrifice to retain control.” That sounds about right.

More Eastworld news below.

Clay Chandler
clay.chandler@fortune.com

This edition of Eastworld was curated and produced by Grady McGregor. Reach him at grady.mcgregor@fortune.com

Eastworld news

Doors shut

Academics have long based their understandings of China on rigorous, on-the-ground fieldwork. But for the past two years, students and professors have been all but barred from entering the country amid China’s restrictive COVID-19 policies, threatening to derail a cohort—or perhaps a generation—of scholars seeking to understand China. “If Beijing closes the doors [to scholars], this will only lead to more speculation and misunderstanding about China overseas,” Yuen Yuen Ang, political scientist at the University of Michigan, tells the SCMP.

Living with the virus

Countries across Asia are re-opening their borders as vaccination rates across the region improve. After initially lagging behind places like Europe and the U.S., Asian countries are quickly catching up. Singapore, South Korea, and Cambodia have vaccinated 90%, 78%, and 80% of their populations, respectively, with each country slowly re-opening borders to quarantine-free travel. China remains a notable exception, with little discussion of re-opening despite the country's high vaccination rate. New York Times

Cobalt race

The U.S. and China are in a race to acquire cobalt, a critical material in making the batteries that power electric vehicles. And China is winning. As of last year, Chinese companies owned or financed 15 of 19 cobalt-producing mines in the Democratic Republic of the Congo, according to a New York Times investigation. The Congo produces two-thirds of the world's cobalt, but U.S. companies have lost out amid China's efforts to buy up cobalt mines. New York Times

Repealed

On Friday, India Prime Minister Narendra Modi announced that his government would repeal three controversial farm bills that sparked mass farmer protests since late last year. Before Friday, Modi dropped few clues that he'd back down from the bills, and he continues to insist that they would be good for small farmers. Critics said the bills would devastate small farmers by cutting critical subsidies, while Modi's government argued it would allow them to be more profitable on the free market. Some protesters of the farm bill say the fight is not over and will only celebrate once the laws are officially repealed in coming months. BBC

Markets and movers

Hang Seng – Hong Kong’s benchmark stock market index announced it is removing indebted property giant Evergrande from its China Enterprises index. Hang Sang did not explain why it removed Evergrande from the index, but the property developer remains on the brink of default even after meeting some bond interest payments in recent weeks.

Cloud Village – The music unit of gaming giant NetEase has restarted its Hong Kong IPO process and expects to raise up to $453 million when it goes public on Dec. 2. Cloud Village has 185 million monthly active users and is Tencent Music’s main rival in the Chinese market but halted its planned IPO in July amid the government’s antitrust crackdown.

Iron ore – China’s benchmark iron ore futures index surged 10% on Tuesday, hitting the daily trading limit. Steelmakers appear optimistic that they will resume production after China’s government imposed strict controls on steel production in recent months.

Reliance Industries – The Indian conglomerate called off a deal on Friday for oil giant Saudi Aramco to take a 20% stake worth $15 billion in its oil and chemicals business. Reliance CEO Mukesh Ambani said last year that the pandemic had altered fuel demand and created hurdles for the deal to go through.

Live streamers – China fined two live-streamers a combined $14.6 million for income tax evasion, alleging that they reported business income instead of personal income to reduce tax exposure. Such tax practices are common in China’s valuable live streaming market, fueling speculation that China is preparing a wider crackdown on the sector.

J.P. Morgan – The U.S. investment bank told Fortune that it will comp Hong Kong staff $5,000 to cover the cost of quarantining in the city after visiting family abroad. Hong Kong maintains some of the world’s most intense pandemic-related border restrictions, requiring all arrivals to serve two- to three-week hotel quarantines once entering the city.

Tesla – CEO Elon Musk said on Twitter on Monday that Tesla plans to launch its Model S Plaid high end sedan in China early March 2022.

Final figure

27%

The share price for Indian digital payments firm Paytm dropped 27% after it debuted on the Bombay stock exchange last Thursday. It plunged another 12.5% on Monday in its second day of trading. Paytm raised $2.44 billion in India’s largest IPO ever, but investors appear concerned about increasing competition in India’s digital finance sector and prospects for the firm’s long-term profitability. Paytm’s stock showed signs of life on Tuesday, with its share price climbing 9.6%.

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