Nonetheless, where firms or industries are particularly vulnerable to reputational issues, image and ethics could be a significant factor in more marginal business decisions (particularly with rising costs and tougher labor regulations already causing some firms to look elsewhere).
Meanwhile, the most recent twist in the Tibet fallout serves as a striking reminder of how China’s newfound assertiveness and clout on the international scene is creating an increasingly complex challenge for foreign companies.
While Western firms investing in China must face the prospect of protest and criticism back home from pro-Tibet campaigners, some companies are coming under pressure in China itself. The big French retailer Carrefour has seen protests at its stores all over China by nationalist activists incensed by the protests that took place in Paris when the Olympic torch passed through the city.
In the current climate, many businesses will find it difficult to avoid becoming stuck between a rock and a hard place.
Adam Strangfeld is research director at Control Risks, an international business risk consultancy.
Copyright: Project Syndicate