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Why are Chinese protesters picketing KFC and smashing iPhones?

In response to the UN ruling favor of the Philippines in the South China Seas, Beijing protests show the risks involved for global companies seeking to tap Chinese markets.

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    Motorists watch people gather to protest outside a KFC restaurant outlet in Baoying county in east China's Jiangsu province. In an apparent attempt to head off large-scale street demonstrations, Chinese state newspapers have criticized scattered protests against KFC restaurants and other US targets sparked by an international tribunal's ruling that denied Beijing's claim to virtually the entire South China Sea.
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KFC outlets across China are facing anti-US protests after a UN tribunal ruled in favor of the Philippines, and against Beijing, in a dispute over territories in the South China Sea.

Stirred by government accusations that the United States encouraged the Philippines to oppose Chinese claims to about 80 percent of the sea's waters, nationalists are calling for a boycott of the American fast-food franchise, which, with more than 5,000 locations, is China's biggest restaurant chain. Other products associated with the US have become objects of protest as well: Photos circulated online show young Chinese nationalists smashing Apple iPhones.

State-controlled media has tried to discourage protestors. "This is not the right way to express patriotism," wrote Xinhua News Agency. The China Daily newspaper said such protests expressed a "jingoism that does a disservice to the spirit of devotion to the nation."

But the protests seem to pose a reminder of the political risks for global brands seeking to expand markets in China.

"The Chinese public, as optimistic and positive as they are, are deeply patriotic and nationalistic, especially people who are younger," said James Roy, a senior analyst at research firm China Market Research Group, to the Associated Press. KFC and Apple "are just very closely associated with the United States, and you are seeing people picking the closest symbol they can think of to demonstrate against."

It comes as KFC struggles to regain solid footing in China following a series of scandals involving tainted meat and allegations of excessive use of antibiotics and growth hormones. Chinese consumers are also increasingly migrating to more health-conscious local competitors.

Apple has also run into recent roadblocks there. In April, its iBooks and iTunes Movies services were shut down just six months after they began, reportedly upon pressure from Chinese regulators. And in May, Chinese courts ruled against it in two intellectual-property cases, including one in which it found that a local company could use the iPhone trademark on bags, wallets and other goods.

This month, a UN tribunal found that China had violated international maritime law in taking control of a shoal located 140 miles from the Philippines coast. It also rejected its claim to areas within the "nine-dash line," which marks the boundary of what China asserts is its territory, wrote The Christian Science Monitor after the decision.

China has indicated that it will not abide by the ruling, saying the tribunal has no jurisdiction over the waters concerned. That has ratcheted up tensions in the region, as the Monitor noted in late June:

Officially, the US doesn't take a position on the competing sovereignty claims in the South China Sea, where Vietnam, Taiwan, Brunei, and Malaysia also contest their rights to territory, fishing, and oil extraction. But China's push to build and administer artificial islands in those waters has angered officials in the Pentagon, creating potential for naval skirmishes to erupt."

On Tuesday, the Philippines said it had turned down China's proposal to start up bilateral talks over the territorial dispute because of Chinese preconditions that the tribunal's ruling not be taken into consideration.

This report contains material from the Associated Press and Reuters.

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