Techno-Nationalism

Chapter 4The In-China-for-China Grey Zone

On a fresh Spring morning in Washington D.C., the U.S. House Select Committee on the Chinese Communist Party commenced a series of computerised war games involving China and Taiwan. It was April, 2023.

Simulations served up different battle scenarios involving weapons systems and technologies that were presumed to factor into an invasion of Taiwan by China’s People’s Liberation Army (PLA).

But discussions also focused on how a war across the Taiwan Straits would impact financial markets and global supply chains. It was rumoured that House Republican, Mark Gallagher, the committee chairman, had invited representatives from Wall Street investment banks to participate. The objective: To raise awareness of how geopolitics are escalating the risks of doing business with China.

WELCOME TO THE GREY ZONE

Capturing and defending market share in China has never been easy for multinational enterprises (MNEs), but a hybrid cold war between Beijing and Washington is making things much more difficult. As tensions across the Taiwan Straits simmer, the prospects of continued business operations in China have become more uncertain.

Domestically, absent any potential Taiwan-related hostilities, foreign companies must already grapple with an unlevel playing field as they compete against local Chinese ‘national champions’ that are heavily protected and subsidised by their home government.

Foreign businesses must also try and shield their valuable intellectual ...