An article in Bloomberg/Business Week calls the fall of Bo Xilai “the most serious threat to [the Communist Party’s] authority since the Tiananmen Square uprising of 1989” and examines the risks for China’s leaders as well as for foreign businesses operating in the country:
For China’s partners in commerce, this is a time of confusion and risk—and also opportunity. Western companies such as Hewlett-Packard (HPQ), Caterpillar (CAT), General Motors (GM), and Siemens (SI) have bet big on the continuation of China’s economic miracle. No sensible CEO dares to kick the Chinese leaders when they’re down. With the outcome still uncertain, no one wants to pick sides, either.
Finesse is called for, along with a clear focus on what really matters. Western governments and businesses benefit if China moves in the direction of free markets and democracy. They lose if China’s leaders try vainly to keep the lid on the pressure cooker. While Western leaders don’t have much influence over what happens next, they can at least keep the lines of communication open while quietly appealing to the enlightened self-interest of China’s would-be reformers. “Thinking people understand the need for change,” says Duncan Clark, chairman of Beijing-based consulting group BDA China. “China is the Pragmatic Republic of China; ultimately pragmatism drives everything.”
All of which is to say that it’s a mistake to stop doing business with China. Just as it’s a mistake to think this is business as usual.
