At a panel discussion about global trade during the Munich Security Conference last week, BMW CEO Oliver Zipse praised his firm’s role in the global economy: Its largest manufacturing plant is in the United States, he said; its fastest growth is in China.

Zipse, who is German, himself went to college in the United States and remains an international man at the helm of his international company: one of the world’s many phenomenally successful Davos men (and Davos women).

“There’s a trend of Dow components, the iconic representation of American corporate achievement, appointing non-American CEOs,” declared Slate in 2007, going on to list recent appointments: Indian-born Indra Nooyi at PepsiCo, Irishman Neville Isdell at Coca-Cola, German Klaus Kleinfeld at Alcoa.

European companies followed the trend. In 2012, Germany’s Deutsche Bank announced that the British Indian banker Anshu Jain would become co-CEO, replacing the Swiss-born Josef Ackermann; three years later Jain was succeeded by John Cryan, a Briton.

Their co-CEO at the time, Jürgen Fitschen, was a German who had worked in countries including Britain and Singapore. Another German giant, Siemens, hired a German CEO with such an international mindset that he changed his name from Josef Käser to the Americanized Joe Kaeser.

Nokia, the Finnish paper and pulp company that transformed its fortunes by becoming a mobile-phone company, turned to network equipment and brought in a whole suite of new executives led by Indian-born Rajeev Suri. Suri’s counterpart at Swedish rival Ericsson, Börje Ekholm, also serves on the board of the Chinese e-retailing giant Alibaba.

The American automotive icon Chrysler was sold to Germany’s Daimler; the quintessentially Swedish Volvo was acquired by Geely of China.

This sort of internationalisation permeated corporate culture: nationality corporate or individual barely mattered. English increasingly became the working language. Executives regularly convened with political leaders to sort any remaining obstacles to a smoothly running global economy. “Davos man” was in charge.

Today’s geopolitical standoffs are making companies’ home countries relevant again; companies have a role to play in their home countries’ national security.

But the world is changing. Indeed, today’s geopolitical standoffs are making companies’ home countries relevant again; companies have a role to play in their home countries’ national security.

Countries are increasingly at loggerheads with one another, and those conflicts are playing out with minimal military aggression. Instead, countries are weaponizing globalisation.

There’s Huawei’s government-supported international expansion that has seen the Chinese tech giant, aided by massive government subsidies, develop inexpensive 5G technology with which it undercuts its competitors Ericsson and Nokia.

Many countries now planning to introduce 5G are quite reasonably opting for Huawei, much to the ire of advocates of fair business practices, who object to the un-level playing field, and of the U.S. government, which senses a national security risk in having a firm linked to the Chinese government providing sensitive technology.

There’s also the Belt & Road Initiative, which offers infrastructure investment and construction to foreign countries at low cost, then leaves those countries beholden to China. Nord Stream 2, the natural gas pipeline between Russia and Germany for which Germany’s government is being roundly criticised by allies who view it as a Russian tool of influence is a partly private enterprise undertaken by a mix of Russia’s state-controlled Gazprom and a handful of Western European firms such as Wintershall and Engie.

A 2019 report by the Swedish Defence Research Agency found that more than 1,000 Swedish businesses are now owned by Chinese nationals, with over half of the firms active in areas designated as priorities in China’s Made in China 2025 industrial plan. Volvo has been joined by other classic Swedish brands in being acquired by Chinese firms.

The U.S. National Defence Strategy speaks of “predatory economics,” and in 2018 Sens. Chris Coons, Jeff Merkley, Marco Rubio, and Todd Young introduced the bipartisan National Economic Security Strategy Act of 2018 bill, which would require U.S. Administrations to treat predatory economics as seriously as Military Aggression.

In authoritarian countries, companies can of course act at the government’s behest. And so far, most predatory practices are not illegal.

In authoritarian countries, companies can of course act at the government’s behest. And so far, most predatory practices are not illegal.

 They do, however, require Western countries to put up a united front. As Senator Mitt Romney pointed out at the Munich Security Conference, even the United States is small compared to China and should team up with its allies.

That includes captains of industry in the United States and allied countries. But with Davos man, there’s no such certainty.

Last year, Kaeser announced that Siemens would invest another 100 million euros ($113 million) in Russia, even as Russia continues to undermine democracy in Germany and other Western countries by spreading disinformation and trying to interfere with elections.

Apple has removed apps such as one used by Hong Kong protesters from its App Store at the request of the Chinese government while refusing to give the U.S. government access to its backdoor, which Washington argues is vital in terrorist investigations.

Author: Elisabeth Braw, Directs the Modern Deterrence Project at the Royal United Services Institute.
Editor’s Note: The article reflects the author’s opinion only, and not necessarily the views of editorial opinion of Belt & Road News.