As a result, the impact of the diplomatic confrontation is likely to remain muted. As the U.S. economy slips closer to recession and Western markets flounder, China is offering one of the few big markets and investment opportunities for U.S. companies. Neither side can afford to let diplomatic bluster get in the way of a burgeoning economic relationship for long. Indeed, in contrast to the chill which descended on business ties after the U.S. bombing of the Chinese embassy in Belgrade in 1999, executives say it was business as usual this time around. The importance of trade and investment is keeping the relationship on a straight path even as politicians trade insults.
Disruptions are disruptions, but the trend is unstoppable.
That's not to say politics will have no impact. If the disruptions get out of hand, even the most durable business ties can be damaged. Denver Mayor Wellington Webb was criticized at home for not leaving China after the aircraft collision. Analysts also note how U.S. portfolio investment could be hurt if the incidents are seen as increasing risk in China. But such is the importance of trade and investment to both sides that most expect sense will prevail, and fallout will be limited.