The challenge of the « 4Bs »: how to navigate a fractured geopolitical world

As the global landscape enters a “world between orders” and superpower rivalries multiply, businesses will have to navigate an increasingly complex operating environment and supply chain uncertainties. After introducing the idea of managing uncertainty in the context of the “3Cs” – CLIMATE change, the COVID pandemic and the return of CONFLICT (in a kinetic and non-kinetic sense), we at Confluence Consultants invite corporate strategists to adopt an additional reading grid of current and future operating business environment. We define this environment as the “4Bs” – BIPOLAR world order, BINARY narratives of “democracy vs. autocracy,” trading BLOCS and BIFURCATION of technology.

Navigating the 4Bs: a new reality for international businesses

Triggered by the rebirth of China’s economic might and the US reaction to this perceived challenge to its hegemonic power, the BIPOLARITY of the international order is best illustrated by hybrid warfare and grey-zone tactics used by both hegemons. This includes sanctions, export controls, embargoes and, more generally, an all-out effort to challenge traditional alliances and the post-Cold War status quo. In this regard, two recent Chinese moves require scrutiny. The consecutive diplomatic moves to offer a peace plan for the war in Ukraine (flatly rejected by Western powers), followed by the brokering of the re-establishing of diplomatic relations between Iran and Saudi Arabia (a resounding success). These have emerged as a masterful execution of an effective strategy: proposing a narrative to the Global South that barriers to peace are to be found in the West, not the East. In this regard, the outcomes of the recent 2nd Russia-Africa Summit in St Petersburg (a grain deal to replace the now defunct Black Sea Grain Initiative, technology transfers, a planned industrial park near the Suez Canal, among others) and the upcoming 15th BRICS Summit in Johannesburg (which Indonesia, Egypt and Saudi Arabia are pressing to join) will need to be watched closely.

The bipolarity of the international order cannot exist without the BINARY narratives of “democracy vs. autocracy“. It is truly a confrontation of models that we are witnessing here: political models of “democratic” VS “autocratic,” economic models of ultra-liberal VS command economy and societal models between “open,” “post-modern” societies VS “traditional,” “reactionary” societies. In a word: models of civilization. The corporates should be concerned because this binary approach permeates an increasingly large part of the economic and industrial realm. Industrial and technological alliances are now being built around “like-minded” countries (“democratic” semiconductor supply chains, through the weaponization of the likes of ASML in the Netherlands or TSMC in Taiwan) or the creation of an “Allied Nations Network” in the field of security, space and dual-use technologies.

These two macro trends directly translate into the slow and painful death of the multilateral trade order embodied by the WTO – World Trade Organization. The weakening of the WTO is leading to the formation of trading BLOCS that mirror new trade interdependences and geopolitical alignments. The “decoupling from China” narrative, or “de-risking” as it is modestly known in Europe, and subsequent Chinese reactions are giving rise to a flurry of “minilateral,” regional trading blocs and agreements: Regional Comprehensive Economic Partnership (RCEP), CPTPP (Comprehensive and Progressive Agreement for Trans-Pacific Partnership), the Pacific Alliance, Responsible Supply Chain Initiative (RSCI) and Indo Pacific Economic Framework (IPEF). A challenging business environment for any multinational corporation, now facing a multiplicity of trade regimes, regulations and tariffs.

Finally, a direct expression of this increasingly fractured world can be found in the BIFURCATION of technology. The China-US trade war launched under the Trump administration has morphed into a tech war under Biden. Its basic foundation is on export controls, foreign investment restrictions and downright embargoes. Multinational tech companies are increasingly being coerced into a “with us or against us” stance, rendering cross-border partnerships at times impossible. Through confrontation in technological norms and standards, access to critical raw materials and the supply of high value-added inputs, corporations are facing an advent of self-sufficient, disconnected “technological Galapagos“. This bifurcation is forcing companies to replicate their business to fit each ecosystem, increasing costs, compliance issues and reputation risks.

The answer? Siloing

Known as “siloing“, this direct response by an increasingly large number of corporations consists in three possible operational decisions.

(1) The replicating of processes across geographies is the most obvious adaptation: German car maker Volkswagen has announced a plan to insulate its chip development for the Chinese market from potential US and EU export restrictions or sanctions by re-shoring them in China, and US CRM solution provider Salesforce is shielding itself from the thorny issue of data protection laws in China by outsourcing to a local partner.

(2) The next step can lead to the spinning off of local operations from the global business. Silicon Valley-based VC firm Sequoia Capital recently announced that it will split into three separate entities by March 2024, each dedicated to three distinct markets marked by increased tech nationalism tensions: the US, India and China. This decision was justified by the need to avoid “portfolio conflicts” as well as increased US national security scrutiny over the two-way flow of funds and information that the firm’s centralized business model was generating between the US and China.

(3) This trend towards localizing business activities (à la “in the US for the US, in China for China”) to escape the use of lawfare and other hybrid tactics in the context of economic statecraft culminates with some multinational corporations even considering breaking up entire businesses. At HSBC’s latest shareholders meeting, a proposal to spin off Asia-Pacific operations was presented to shareholders (Resolution 17), with the support of the bank’s largest shareholder, Ping An. The bank, with dual headquarters and dual listings in London and Hong Kong, has been crystalizing antagonistic pressures from the US and China, with both hegemons using lawfare to weaponize the banking group in their many battles: the arrest of Huawei’s CFO Meng Wanzhou over the alleged violation by the Chinese telecom giant of the US-imposed embargo on Iran, and the sanctions on Hong Kong officials AND demonstration leaders as a result of the anti-National Security Law demonstrations in the SAR, to name a few. This latest shareholder revolt, on the grounds of disappointing dividend payouts (Resolution 18) and unbalanced profit generation at the group level, is hiding a deeper geopolitical clash and economic warfare from within the bank.


These are textbook cases of the disruptive impact of lawfare, the use of extraterritorial legislative arsenals and the weaponization of shareholder activism in the wider context of hegemonic rivalry. Some multinational corporations will get away with it by restructuring, some by divesting, and some may not be able to avoid splitting up. This weaponization of corporate interests in the “4Bs” context requires a profound rethink of international business strategies.



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