Business against the background of the U.S.-China Standoff—How to cope with the geopolitical risk

 

Over the decades following the end of WWII, the Japanese economy achieved extraordinary growth by seeking a policy of making the country “lightly armed but economically powerful” under the aegis of the Japan-U.S. Security Treaty.

Now, thirty years after the end of the Cold War, a new geopolitical risk has emerged in the form of increased tension between China and the U.S. The open, global liberal capitalist regime, which has thus far underpinned Japan’s economic prosperity, is being eroded.

Some predict the rift between the U.S. and the EU on the one hand and China on the other will only deepen when it comes to human rights policies. Against this backdrop, the U.S. government and the public sentiment in Western countries may force the Japanese government and companies to take a firm stance on their activities in the Chinese market and use of made-in-China products.

We will discuss how businesses in Japan should behave in a tumultuous global environment, when the conflict between the U.S. and China may lead Japan’s Western allies to question its stance on the prevailing tension, given the temptation of the massive market in China.