Calls grow louder to boycott Beijing's Olympics — and analysts warn of retaliation from China

Key Points
  • The 2022 Winter Olympic Games are set to be hosted by Beijing between Feb. 4 to 20.
  • Relations between major Western powers and China have been tense over allegations of severe human rights abuses in China's Xinjiang region – home to the Uyghur Muslims, who have been identified by the United Nations, U.S. and UK as a repressed ethnic group.
  • For its part, China has repeatedly denied allegations of forced labor and other abuses in Xinjiang.

In this article

A journalist looks at a display at the exhibition center for the Beijing 2022 Winter Olympics in Yaqing district on February 5, 2021 in Beijing, China.
Kevin Frayer | Getty Images

Countries and companies outside China face rising pressure to boycott the Winter Olympics in Beijing next year, but China will not sit back idly in response, says political risk consultancy Eurasia Group.

"Western governments and firms face mounting pressure from human rights advocates and political critics of China to boycott the Beijing 2022 Winter Olympics," according to Eurasia Group analysts.

The Games are due to take place between February 4 to 20.

"China will punish countries that boycott the Games with political sanctions and commercial retaliation, but with much greater severity in the athletic boycott scenario," they said in a report published Thursday.

"If a company does not boycott the Games, it risks reputational damage with Western consumers. But if it does, it risks being shut out of the Chinese market.
Eurasia Group analysts

"Campaigners have focused on Beijing's targeted repression of Uyghurs in Xinjiang, which some Western governments have called 'genocide,'" the report said. "Calls to shun what activists label the 'Genocide Games' will grow as the opening ceremony approaches, increasing risks for governments, corporates, and investors — whether they decide to boycott or not."

Last month, the governments of Canada, the United Kingdom and United States issued a joint statement accusing the Chinese government of inflicting an "extensive program of repression" on the Uyghur people including detention camps, forced labor and forced sterilizations.

China has repeatedly denied allegations of forced labor and other abuses in Xinjiang. The foreign ministry last month called such claims "malicious lies" designed to "smear China" and "frustrate China's development."

China boycotts Nike and H&M for stand on Uyghur labor camp
China boycotts Nike and H&M for stand on Uyghur labor camp

Businesses have also been caught in the crossfire.

In late March, H&M faced backlash in China over a statement — reportedly from last year — in which the Swedish retailer said it was "deeply concerned" by reports of forced labor in Xinjiang.

Supporters of the Olympic boycott argue that it is "necessary to punish China for its systemic discrimination against ethnic minorities in Tibet and Xinjiang, crackdown on political freedoms in Hong Kong, and hostility to self-rule in Taiwan," the Eurasia report said.

Three kinds of boycott

Eurasia outlined three possible scenarios: a diplomatic boycott, an athletic boycott, or a so-called "outlier scenario."

1. Diplomatic boycott

The most likely scenario — with a 60% probability — is for the U.S. to join at least one other major Western country in a so-called diplomatic boycott of the Games.

"A diplomatic boycott is defined here as downgrading or not sending government representatives to the Olympics and taking other high-profile steps to deny Beijing the limelight as host," the analysts explained.

Eurasia said the likely participants in a diplomatic boycott would be the U.S., Canada, the United Kingdom and Australia, with the possibility of some European countries joining in.

In Asia, however, U.S. partners such as Japan, India and South Korea — which have "more complex political dynamics" or deeper economic relations with China — are not expected to join such a boycott.

The diplomatic approach is the least drastic scenario, according to Eurasia.

2. Athletic boycott

In this scenario, which has a 30% probability, one or more Western countries could stop their athletes from participating in the Games, perhaps by applying domestic political pressure. An economic boycott is defined as the banning of U.S. spectators, broadcasters, and sponsors.

"Athletic and economic boycotts, which are harder for audiences to ignore, would compel even harsher retaliation from Beijing, possibly involving a diplomatic freeze and more widespread consumer boycotts against Western brands," Eurasia analysts said.

3. 'Boycott lite'

This is an outlier scenario where tensions between the West and China ease, and there will be "mild political statements about the Games" but no formal boycott, the analysts said, labeling it as "boycott lite."

It's the least likely scenario and only has a 10% chance of happening, they said, adding: "There is currently not much cause for optimism about the trajectory of Sino-Western relations."

Here, heads of states might decline to attend the Games and cite scheduling conflicts or other non-political excuses. "Rhetoric would fall far short of an enthusiastic endorsement of Beijing as host, but there would be no declaration of a boycott and no presentation of a united Western position," the report said.

Blowback from China?

A boycott of the Olympics would "diminish any soft power dividend" that Chinese President Xi Jinping had hoped to gain from the event, which gives Beijing "a platform to promote its global status among domestic audiences and project a positive image to billions of foreign viewers around the world," the Eurasia analysts said.

"Beijing will almost certainly retaliate against countries involved in boycotts," the analysts said. "Beijing's direct response to a diplomatic boycott would likely be a reciprocal boycott of Western events and sanctions against prominent boycott advocates."

Fashion brands face boycotts in China over Uyghur stance
Fashion brands face boycotts in China over Uyghur stance

Increasingly, consumer businesses based outside China are attempting a balancing act — projecting an image of concern about human rights to consumers outside China on the one hand, while trying to avoid getting shut out of China's massive market on the other.

"If a company does not boycott the Games, it risks reputational damage with Western consumers. But if it does, it risks being shut out of the Chinese market," the analysts said.

Due to the high international profile of the Games, retaliation in China could be "even worse" than the present removal of H&M's commercial presence on the Chinese internet, they said.

Still, the analysts say that most businesses will likely choose to participate in the Olympics as "the potential cost of losing access to the Chinese market will probably outweigh concerns over a Western consumer backlash," which Eurasia predicts will likely be brief.

— CNBC's Arjun Kharpal contributed to this report.