For companies already caught in the crosshairs, the bigger challenge now may be learning how to operate across two increasingly separate systems.
Few expect firms to exit China entirely. Instead, many are restructuring operations – separating China-facing and global-facing business units, and building parallel compliance, payment and supply chain systems.
Some multinational companies have already begun “siloing” their China operations, Johnson said, including data, employee information and internal systems.
Companies may also become more cautious in how they justify decisions to stop doing business with certain entities, said Dai.
Rather than explicitly citing US sanctions, firms may increasingly rely on broader explanations such as commercial risk, internal compliance policies or “applicable laws” across jurisdictions, he added.
The global economy could become increasingly polarised around separate US- and China-centred systems, said Gary Ng, a senior economist at Natixis Corporate & Investment Banking (CIB).
“As China enriches its anti-sanction toolbox, it will respond in a new way, putting more pressure on (companies),” he said.
“The trend can become a new norm.”
For companies, that means investment and supply chain decisions will be shaped not just by cost or efficiency, but by geopolitical risk.
“It is not only about profit maximisation but also about managing geopolitical risks,” he added.
