CEOs are worried about China risks, but they’re learning that leaving the market is easier said than done

A decade ago, any big company without a robust China strategy was considered to be missing the boat. Today, many are scrambling to get out of that boat. Rising intervention in the private sector by the Chinese Communist Party, growing sanctions against China in the U.S., the risk of conflict across the Taiwan Strait, and squeezed profit margins attributable, in part, to tougher competition from Chinese companies, have all combined to create a rush to “derisk” China business as fast as possible.

But as Fortune’s Geoff Colvin and veteran consultant Ram Charan report in a story for this month’s Fortune magazine, that’s easier said than done. The two talked with dozens of CEOs, CFOs and others doing business with China and found the derisking race is moving slower than expected. In some cases, that’s because China is the only credible source of supply—think batteries or solar panels. In others, it’s because it’s by far the least expensive producer. And in still others, it’s that China’s consumer market is too big to walk away from. “It’s not that I love China,” the recently retired chief of one U.S. heavy equipment manufacturer told Colvin and Charan. “It’s because that’s the only place I can buy a given part at anything close to the price I have today.” Says another, “I’ve got 20% of my business in China. I can’t get out.”

Still, most executives agree there is good reason to diversify—especially if you are in a strategically sensitive industry. That includes exports being controlled by the U.S. government—semiconductors, AI, robotics, biotech—as well as areas deemed high priority by the Chinese government—pharmaceuticals, aerospace, electronics, and renewable energy. There are exceptions. “We’re incredibly bullish on the opportunity,” McDonald’s CEO Chris Kempczinski told Fortune. “There’s no reason China couldn’t be our largest market.” But most others are finding that, as one analyst put it, “they have a lot more China vulnerability than they thought.”

You can read the full story here.

And here’s the question for the day: Which gives a bigger lift to a city’s economy, the Super Bowl or a Taylor Swift concert? Answer: It’s still the Super Bowl, but not by much. According to Bank of America, Swift’s Eras Tour concerts generated an average of $77 in spending at restaurants and $56 at bars…just slightly behind the $96 and $74 spend spurred by Super Bowl LVII. This year, maybe Las Vegas will get the best of both.

More news below.

Alan Murray
@alansmurray
alan.murray@fortune.com

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This edition of CEO Daily was curated by Nicholas Gordon.