America’s Treasury Department is reportedly working up plans to stop outbound investment in cutting-edge technologies in adversarial countries. It has already banned the sale of advanced microprocessors and chipmaking equipment to China. Sino-American commerce could snap shut entirely if China imitates Russia’s belligerence in its relations with its own coveted neighbour, Taiwan.
In the past decade or so things started to change. American and European companies began to lose some of their foreign fizz. Banks battered by the global financial crisis of 2007-09 and the ensuing euro-zone debt rigmarole slimmed down their foreign businesses. And new competitors, especially from China, began to challenge Western firms. Four of the five biggest smartphone brands in India, for example, are now Chinese.
As for the Chinese market, it remains important for some sectors. Western semiconductor companies, for example, derive around 30% of their sales from China. But chipmaking accounts for just $400bn of the $12trn of sales generated abroad by listed Western companies .
The biggest firms maintain a large foreign presence. General Motors, a Detroit carmaker, still boasts more than 100 foreign subsidiaries. Most of Chick-fil-’s new foreign diners will be able to wash down chicken sandwiches with Coca-Cola, which continues to quench thirst in more than 200 countries and territories.