Beijing, meanwhile, has intensified a crackdown on foreign firms that veer into areas it deems a potential threat to national security despite telling the world that it is open for business. And worries persist about China’s threat to invade Taiwan, which Beijing claims as its territory.
But while Mr. Wildau acknowledges that the sentiment in Washington is anti-China, U.S. business has so much skin in the globalized trade game that business leaders are uneasy about drawing attention to political issues. “I could scare the heck out of clients — and attract more business — with dire predictions about Taiwan,” he says. “I don’t.”
The reputational consequences of getting it wrong on China can be hugely embarrassing. For example, the country is Volkswagen’s largest market and it has 100,000 employees there. In 2019, when Herbert Diess, the chief executive of Volkswagen at the time, told a BBC reporter that he did not know about re-education camps where millions of Uyghurs have been interned in Xinjiang, the video clip went viral. At the company’s annual meeting on Wednesday, activists and some shareholders were still lashing out at Volkswagen’s continued presence in the region and called for an independent audit of its operations there.
“My advice would be: Be prepared,” Mr. Wildau says. “Have properly worked through codes of conduct and principles. No corporate should be caught out by events.”
Britain has experienced severe ructions that were demonstrably bad for global businesses, including a referendum over Scottish independence in 2014 and Brexit two years later. It is a useful case study of the tightrope executives are trying to walk.