The Poppy Wars

Today McLeod Governance enters the world of Sino-British diplomacy (a natural place for us to find ourselves!) to discuss a variation on country risk.

Early in his Prime Ministership, the United Kingdom Prime Minister David Cameron visited China and – by one simple but incredibly symbolic act – defined for McLeod Governance what country risk is all about.

Forget whether you should or should not be investing in a country because of rampant corruption.

That is not country risk.

Country risk more precisely is country culture risk.

Cameron’s journey is a case in point.

Whilst in China on Remembrance Day 2010, Cameron and four Cabinet ministers wore poppies in defiance of Chinese demands to remove them.

The Prime Minister was told that allowing his delegation to sport the symbol would cause grave offence because it would remind Chinese ministers and officials of the Opium Wars.

Also known as the Anglo-Chinese Wars, they were the climax of trade disputes between China and the British Empire over Chinese attempts to restrict British opium trafficking.China was defeated in both the First Opium War, from 1839 to 1842 and the Second Opium War from 1856 to 1860.

The year of Cameron’s visit marked the 150th anniversary of the end of the second war, which ended when British and French armies arrived in Peking and razed the Emperor’s Palace to the ground.

The British victories in both conflicts apparently still weigh heavy on Chinese minds, since the prospect of British ministers and officials wearing poppies while attending talks in Beijing prompted horror.

The poppy is the source of opium and Chinese officials were apparently unfamiliar with its importance in Britain in commemorating war dead.

Mr Cameron refused to remove his poppy, as did Chancellor George Osborne, Business Secretary Vince Cable, Energy Secretary Chris Huhne and Education Secretary Michael Gove, who are all accompanying the Prime Minister in China.  The English newspapers at the time reported that

‘When asked if it was a joke, the Chinese were stern-faced and said “No, we’d like you to remove them”,’ said one British aide.   Clearly that was not an option so we tried to explain the importance of the poppy in Britain and informed them we would be wearing them all the same.’

One thing that McLeod Governance has deliberately avoided commenting on here is who (if indeed anyone) was the party that didn’t understand – or respect – the country cultural risk.

Answer that question Dear Reader to the satisfaction of both sides and then you have mastered not only the world of international diplomacy but the world of country risk assessment.

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