Is McDonald’s A Victim Of South China Sea Disputes? – Forbes

(Photo by Jes Aznar/Getty Images)

McDonald’s has no claims in the South China Sea. It hasn’t taken any sides in the dispute between China and its neighbors either.

Still, the South China Sea disputes may have had something to do with the company’s decision to sell its businesses in mainland China and Hong Kong for $2.08 billion to Citic, a state-owned conglomerate, and Carlyle Group, a private equity firm.

How so? South China Sea disputes have ignited Chinese nationalism against every country that disputes China’s quest to control the region.

And America is on the top of the list, as are companies that are American business icons — like McDonald’s, Apple and others.

Last July, Apple’s stores in China attracted the angry protests of nationalists trying to boycott Apple products. Why? Because America has had been on the Philippines side on the South China Sea dispute. That’s something Beijing and the nationalists who carried its message to the streets couldn’t accept or comprehend.

One week earlier, an international arbitration court found that China has no historic title over the waters of the South China Sea–a ruling which served to contain China’s ambition to control trade and resources in the region.

Still, the ruling was a big victory for the Philippines, which filed the case back in 2013 under Annex VII of the United Nations Convention on the Law of the Sea (UNCLOS), the primary treaty governing international maritime law.

The ruling, which was also a victory for America, Philippines’ close ally, means that South China Sea doesn’t belong to China. And Beijing cannot legally write its own navigation rules in South China Sea or control trade in one of the world’s busiest waterways.


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