KEY POINTS:
The folk at Fidelity Investments shouldn't expect VIP seating at next year's Beijing Olympics.
The Boston-based company slashed its stake in PetroChina amid pressure to sell shares in companies doing business in Sudan, which has been accused of supporting genocide in Darfur.
Officials at China's biggest oil producer say it's no big deal, but who's buying that? Fidelity is only the world's largest mutual-fund operation.
Bravo to Fidelity. It didn't cite the 2008 Games specifically, yet with activists working to make the phrase "Genocide Olympics" part of investors' lexicon, China should expect more protest sales of its assets.
The Olympics are supposed to be China's coming-out party.
Asia's fastest-growing economy is sparing no expense to make sure the Games are the grandest ever. The slogan for the event, "One World, One Dream", is meant to convey China's pivotal - and growing - role in the global community.
Instead, China may face a public-relations nightmare over its support of Sudan's pariah regime. If China doesn't tame the growing outcry, it could be hosting the most controversial Olympics since Moscow in 1980 or maybe even Berlin in 1936.
Investors could play a key role by getting China to push Sudan to end the bloodshed. Fidelity's recent move to trim by at least 38 per cent its stake in PetroChina, which has been developing oil fields in Sudan since 1996, is a case in point.
Warren Buffett should follow Fidelity's lead and instruct his Berkshire Hathaway to sell its stake in PetroChina. To many, Buffett is an investment god. If he wanted out of Sudan, he could convince shareholders. Fidelity could go even further to divest itself of PetroChina.
Much of the world is scared senseless of crossing China.
Look at how Google, Yahoo, Microsoft, Cisco Systems and others have tripped over one another helping the Communist Party to censor the internet. Governments such as the United States will go to war supposedly to bring democracy to the Middle East, while essentially selling out democratic Taiwan.
Here, China's philosophy of non-interference in the sovereign affairs of trading partners won't cut it. Its ties with Sudan are cracking Beijing's criticism armour.
President Hu Jintao disputes the notion that China is in any way shielding Sudanese President Umar al-Bashir from international pressure. The United Nations says the bloodshed has killed more than 200,000 people and displaced more than two million.
It's important for investors and business executives to join politicians and celebrities in shaming Chinese officials. As more state-run companies see their stocks and bonds paying a price for Sudan, China will become more likely to respond.
China's see-no-evil-hear-no-evil approach to trade is finally raising eyebrows. Hollywood deserves considerable credit, starting with actress Mia Farrow. Her Wall Street Journal op-ed in March prompted director Steven Spielberg, one of the Beijing Olympics' artistic advisers, to urge Hu to change course on Darfur.
The Washington-based Sudan Divestment Task Force, among others, is making strides swaying universities, investment firms and state pensions to pull money out of companies profiting in Sudan.
Pressure will only increase if China doesn't use its clout as a permanent member of the UN Security Council to influence Sudan.
-BLOOMBERG
