08 February 2012

China syndrome

Published:: 23 February 2010
Channel:: The Blog
Byline:: Malory Davies

The Dalai Lama dropped by at the White House for tea the other day - innocuous enough you might think, but it was enough to enrage the Chinese Government.

The US press reported a Chinese Foreign Ministry spokesman as saying it “seriously hurt the national feelings of the Chinese people and seriously undermined China-US relations”.

In fact, President Obama seems to have made it his mission to antagonise the Chinese government over the past few weeks. Inviting the Dalai Lama to the White House is seen by the Chinese leadership as challenging the legitimacy of its control of Tibet.

In addition, Obama has approved the sale of $6.4 billion worth of weapons to Taiwan, and indicated that the US plans to get much tougher with China in trade talks.

For those organisations whose supply chains rely on sourcing in China, these are not pleasing developments but harsh reminders that China is still a totalitarian state that is capable of reacting aggressively to any challenge.

Obama has his own problems. His policy on China is under fire from both the right and left of the US political spectrum. The right accuse him of kowtowing to a foreign power, while the left accuse him of weakness on China’s human rights record.

It is tempting to dismiss all this as a storm in a teacup – after all these are not new issues and they have not got in the way of the growth of trade so far.

However, it could signal a qualitative change in the nature of the relationship between China and the west as increasingly it challenges the US as a global superpower. Some US commentators are predicting that the relationship will be akin to a roller coaster ride for years to come.

Perhaps we are about to see qualities like agility and resilience moving up the scale of supply chain priorities.

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