The Chinese government went berserk over Nancy Pelosi’s visit to Taiwan. They threatened action by the People’s Liberation Army, which didn’t interfere with her visit but may still be forthcoming. They attempted to intimidate the United States much as they did tiny Lithuania. Clearly, the nationalist, Marxist ideology that President Xi Jinping and his propaganda machine have been spewing is persuading the Chinese that it is time to directly confront the United States, rather than pretend we can co-exist in a compete-and-cooperate framework.ic
Every CEO who does business in China or with China should examine what happened and what it means to their continued business relations. At a bare minimum, they should be seeking to diversify their supply chains so that they are not solely dependent on any Chinese entity. Xi has cracked down on China’s own private sector, effectively reasserting Chinese Communist Party control over it. In his mind, foreign corporations are simply chips for him to use on the global geopolitical stage. Every American and foreign company should be striving to develop critical distance from Beijing so that they can resist its pressure tactics. I don’t think this is the moment of decoupling, but it should definitely be the moment when CEOs start to rebalance their China exposures.
