'De-risk, not decouple' are the new buzzwords for Western policy toward China, drawing skepticism from Beijing about whether there is any difference between the two. For businesses caught in the middle, the semantics are beside the point.
"There's enormous suspicion on the Chinese side and on the American side,” said Henrietta Fore, the former head of UNICEF who has served on boards of major companies, on the sidelines of a Women Corporate Directors’ conference. “I'd say 90 per cent of CEOs are consumed with how to plan properly for this."
The latest sign conversations are getting more urgent came last week when venture capital firm Sequoia said it would separate its Chinese and Indian businesses into two independent firms after concluding it had “become increasingly complex to run a decentralized global investment business.” Sources said geopolitics was one of those complicating factors.
One financial services CEO who also visited China earlier this year said he went to support his colleagues who have to deal with the uncertainties created by the current environment and to demonstrate to officials his firm's intention to remain there. At the same time, he's tried to keep a low profile, part of the reason he didn't want to be named in this column.
In recent months, Western allies have tempered their tone, rejecting the idea of severing all economic ties with China in favor of a more nuanced approach that would not cut off trade but protect sensitive areas, such as military technology – the doctrine of"small yard and high fence." Companies are also reworking their IT systems, in some cases separating China from global operations, to prevent sensitive data from leaving the country, the former diplomat said.