Since the introduction of economic reforms in 1978 by Deng Xiaoping, China had unbroken high growth registered between 1979 till 1989, a forty years period unrivalled in history. The rise of China was initially welcome, but the West later turned antagonistic towards China, led and prodded by USA. This got global businesses snared into the crosshairs of both America and China.
China was the much favoured nations since the implementation of economic reform that offered a package deal consisting of cheap labour, availability of natural resources, low tax regime, newly built infra-structure and the business policy of open door that welcome western companies while guaranteeing investment protection, government support and conducive environment. A plethora of businesses moved into China in several fields including electronics, consumer products, automotive vehicles, pharmaceutical items and many others.
As China has risen as major power as Barrack Obama pointed out the attitude of western powers led by USA changed. Cooperation was thrown out of window and confrontation was opted as strategic option. Companies were caught off-guard and now have got to disentangle from the grip of power-pay between rising China and fading West. Unless common sense prevails it is businesses and their customers would suffer. A compromise business policy must be etched out with the following parameters:
1. It must be made clear that confrontation is not in the interest of both China & the West. Both parties must work hard to bring about a conducive trade & investment environment where mutual benefit takes precedence
2. A de-coupling of conflicting areas and cooperating areas must be in place so that one does not affect the other
3. The West must be prepared to accept China as a major economic powerhouse and welcome its growth and prosperity wholeheartedly
4. Absolutely there is no question as to who is number one who is number two and so forth. Both parties must treat the other not as an adversary but as a partner of equal footing
5. Business manoeuvre of “one-upmanship” by the West is not going to work with giants like China that has equal if not higher economic muscle than America and the West put together. Moreover, China has already harnessed the concept of asymmetrical warfare in business competition
6. Instead of hectoring over China on “rule based international order” the West is well advised to opt for “consensus based international order” that includes business competition, supply chain and fair practices.
Cheers!
Muthu Ashraff Rajulu
Business Strategist
Mobile: + 94 777 265677
E-mail: cosmicgems@gmail.com
Blog: Business Strategist
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