The biggest market race of all Western companies are at risk of losing to China: Op-ed

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The era of doing business in China as Western companies once knew it has fundamentally ended.

China’s leaders are meeting in Beijing on Tuesday for a second day to search for ways to stabilize the country’s current economy while keeping its focus on plans to turn toward a more sustainable and self-reliant growth model.

US President Joe Biden and Chinese President Xi Jinping hold a meeting on the sidelines of the G20 Summit in Nusa Dua on the Indonesian resort island of Bali, November 14, 2022. There is a long history of CEOs chasing short-term profits, giving precedence to quarterly earnings objectives and share prices, at the cost of establishing a sustainable long-term approach.

These events forced corporate leaders to consider their overexposure and lack of viable, sustainable, and commercially competitive alternatives to China. It was only then that some companies began to get serious about supply-chain diversity and geopolitical de-risking. But when it comes to de-risking, there is now the risk it's one more race where we risk falling behind to China.

On multiple occasions, we've witnessed foreign companies get this calculus and timing wrong. They get addicted to the profits. They get arrogant and overconfident. They fail to see a need to evaluate the economic and political environment on a constant basis.

 

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