With China growing closer to Russia and putting the world on notice about a One-China Policy with regard to Taiwan, a former State Department official is warning businesses to get their "China contingency plan" ready.
Keith Krach, an Under Secretary of State during the Trump administration, released a video saying every major company needs to prepare for a major blow up with China, and it is going to be bigger than Russia's invasion of Ukraine.
"Many of the most respected board members in corporate America and Europe are demanding a China contingency plan from their CEOs because they realize that a China risk mitigation plan is not a drill," Krach said in the video posted to LinkedIn.
"One year ago, as the world watched General Secretary Xi's closest military and economic ally, Vladimir Putin's unprovoked and bloody invasion, 300 of the West's top corporations frantically curtailed their businesses in Russia, costing hundreds of billions of dollars.
"The business exposure to China is 10 to 20 times greater than that of Russia. Communist China is not only a real and urgent threat to democracy, but to our businesses as well."
The video and post echo the remarks in an op-ed for Fortune magazine last April.
Krach warned of the aspects the Trump administration sought to press China on during trade negotiations and before the COVID-19 pandemic decimated world health and economies.
"Companies doing business with China have endured parasitic joint ventures, blatant thievery of intellectual property, a worldwide bullying spree, and a collection of proprietary information that has been exploited for China's commercial advantage," Krach added in his Friday video and post. "Doing business with, in, and for China represents a tremendous risk, and my fellow board members understand they have a fiduciary duty to mitigate significant risk for their shareholders.
"When the dreaded becomes the inevitable, you no longer need to fear it. You must develop a plan and execute on it."
Krach warned of "Russia's totalitarian twin and closest military and economic ally — China" long before the recent diplomatic meetings between the countries.
"It does not take a Ph.D. in international affairs to understand the common threads that underpin the China-Russia partnership," Krach wrote. "Both governments are known for lawless behavior, duplicity, bullying, domestic oppression, coercive economic practices, and grave human rights abuses.
"It's no surprise the tech giants that form the backbone of China's surveillance state — such as Huawei, Alibaba, Tencent, and Xiaomi — are still happily doing business in Russia.
"What if Xi pulls a Putin?"
Krach noted before last year's invasion of Ukraine, that Russia and China "'signed a mutual love letter saying their friendship has no limits, there are no 'forbidden' areas of cooperation,'" Krach wrote.
"Ominously, it also said Russia 'confirms that Taiwan is an inalienable part of China and opposes any forms of independence of Taiwan.'"
Doing business with China exposes companies to risk like never before, Krach warned.
"Communist China is not only a real and urgent threat to democracy and peace — but also to business," his missive continued.
"The world saw the Ukrainian attack coming, knowing full well that Putin is not in the habit of bluffing. Neither is Xi. The free world has come to learn that, just like Putin, General Secretary Xi is not to be trusted — and trust is the foundation of all business and international relations.
"You can't afford to get caught off guard on this one. So prepare now. When that moment comes, and you're not ready, it will already be too late."
Eric Mack ✉
Eric Mack has been a writer and editor at Newsmax since 2016. He is a 1998 Syracuse University journalism graduate and a New York Press Association award-winning writer.
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