Western companies have severed ties with Russia – could China be next?

Companies with large investments in China must take into account the possibility of having to exit, writes Hamish McRae

International investment in China will become harder to justify (Getty)

Trying to exclude Russia from the world economy, or at least that part of the economy ordered by the present developed countries, has proved tough.

The west can stop buying Russian gas, oil and other products, but to do that takes time and carries big costs, including accepting higher inflation than would otherwise be the case. But what if the west tried to exclude China?

It is a question that has not yet arisen, or at least only in specific issues such as dropping the Chinese telecom company, Huawei, from providing the equipment for the 5G networks of a number of countries, including the UK. But one of the lessons of the terrible past few weeks has been that companies in the west cannot continue operating in a country that behaves in the way Russia has done. This is not simply a question of sanctions. The reputational damage from operating in Russia is too great. Investors would not permit them to carry on, and consumers in other countries would threaten to boycott their goods and services.