Fast Company has a long and fascinating piece about how Starbucks has "cozied up" to China's Communist Party in its quest to build out an enormous store fleet and infrastructure there; "It’s estimated that a new Starbucks café opens in China every nine hours. There are more Starbucks stores in Shanghai than in any other city in the world." And Howard Schultz, the current CEO, has said that "China will overtake America as Starbucks’s biggest market by 2025."
The question is whether Starbucks, which always has positioned itself as an ethical beacon, is compromising its values as it looks to achieve growth."
"The Seattle-based coffee giant has been working quietly toward this goal for almost 30 years," Fast Company writes. "It’s taken the usual steps necessary to operate successfully in China as a foreign enterprise, such as building rapport with Communist Party officials, setting up joint partnerships, and expanding slowly yet strategically. But Starbucks has gone much further in many ways than other U.S. companies have, even Tesla and Apple, whose CEOs have made headline-grabbing agreements with President Xi Jinping’s ruling party … Unlike companies that are merely building factories, hiring workers, and developing markets in the country, Starbucks is helping to cultivate the land itself—one of the few regions where it does so. It began testing beans and working with farmers in China’s coffee region of Yunnan in 2007. Since then, it has developed its own domestic supply chain and trained more than 30,000 farmers. It’s common for larger foreign entities to engage in charity and volunteer projects that include donating to Chinese nonprofits, but Starbucks’s support for Chinese initiatives goes well beyond the norm."
In early 2021, the story says, China's President Xi Jinping "sent Howard Schultz a letter encouraging him and Starbucks to 'continue to play an active role' in promoting China trade amid the intensifying tariff war between the U.S. and China. News that Xi had created a direct communication line with a foreign business leader was a shock to the West, particularly because the scoop came from Chinese state media, which made this more akin to an official press statement than a news story.
"China business consultant Stone Fish warned at the time that Schultz, who has long cast himself as a centrist unifier, was 'wading into dangerous territory,' that this was an authoritarian strongman asking an American business leader for help with Washington, a move with 'serious strategic, legal, and ethical implications'."
You can read the entire piece here.