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On September 12, 2017, The Conference Board China Center convened nearly two dozen member company executives for its 3rd Deep Dive Exchange of 2017, titled “Military Tensions in Northeast Asia and the South China Sea: What Planning Assumptions Make Sense?” During the meeting, the group compared perspectives and discussed what steps MNCs can take to dimension, plan for, and mitigate risks accompanying the increasingly tense geopolitical environment in East Asia.
Key insights included:
- Hot conflict risks for MNC business in China are considered to be low, but ERM should incorporate relevant scenarios. Most members do so.
- A China and/or global economic deterioration, and financial market volatility, are deemed the key impacts to plan for – supply chain continuity is a key issue for some companies.
- A détente-like solution is considered most likely for North Korea, eventually.
- South China Sea risks related to accidents that could escalate are the most underappreciated risk.
- At this juncture, the US calculus on China-related hot spots is considered the least knowable.