The hot topic in corporate boardrooms last week wasn’t Russia, but China. China is Vladimir Putin’s lifeline. The Chinese can soak up Russia’s excess oil, gas, grain, and minerals, and receive a nifty discount for the favor. Both countries have been preparing for this moment, whether intentionally or unintentionally, for a decade. In retrospect, it’s clear China’s “Belt and Road” initiative helped build Putin’s escape hatch.

China’s hope now is to straddle the battle—take advantage of the discounted natural resource bounty from Russia while maintaining lucrative trade relationships with the U.S. and Europe. But as Russian attacks on Ukrainian civilians grow more obvious, frequent, and bloody, the China straddle becomes more difficult. Can global corporations, which acted so quickly to sever ties with Russia, simply ignore Russia’s prime enabler as the war moves ever further outside the lines of international acceptability? And even if companies choose to ignore China’s action, might the U.S. and Europe follow through with President Biden’s threat last week of “secondary sanctions”? Then there is the most-feared scenario: What if China uses the moment to invade Taiwan, which houses a significant portion of the West’s advanced semiconductor manufacturing—arguably even more important than oil?  (The prospect of a Taiwan invasion has become a significant concern of the Japanese public, which rests closest to the potential conflict, according to this recent poll.)

As one Fortune 500 CEO told me last week, if China decides to throw its lot in fully with Russia, it “has secured all the energy, minerals, and food it needs for a new ‘Greater East Asia Co-Prosperity Sphere,’ using its massive navy, and we move all the way back through a new Cold War to WWII imperial ambitions in the Pacific—but this time China and not Japan!”  

The hope, of course, is the same hope that ruled when China was admitted into the World Trade Organization in December 2001: that deep and enriching economic ties with the West will prevent such an imperial approach. And that may be the likeliest scenario. But any global company with significant business interests in China that isn’t stress-testing (or war gaming) these scenarios right now isn’t doing its job.

More news below. And check out Fortune writer Erin Prater’s coverage of the emerging economic Cold War between the U.S. and Russia here and here.

Alan Murray
@alansmurray
alan.murray@fortune.com

TOP NEWS

Chip outlook

The CEO of ASML, a crucial supplier of chipmaking equipment, says shipments of the company’s machines will not be able to match demand in the near future, meaning chipmakers’ urgent expansion plans will be crimped. Financial Times

China plane crash

A China Eastern Airlines 737-800 has crashed in the Guangxi region of southwest China. There’s no word as to casualties yet, but the passenger plane was carrying 132 people. Boeing shares fell nearly 7% on the news. Bloomberg

Chernobyl rotation

Staff at Chernobyl, held by Russian troops, have been allowed to rotate for the first time in over three weeks. The fact that a single shift was extended over such a period was great cause for concern. Half the staff on this shift have yet to take a break, however. “They deserve our full respect and admiration for having worked in these extremely difficult circumstances,” said Rafael Grossi, head of the International Atomic Energy Agency. Reuters

German pivot

Germany has struck a deal to buy Qatari liquefied natural gas, to substitute for gas currently supplied by Russia. Bloomberg

AROUND THE WATERCOOLER

Chinese vaccines

Most COVID deaths in Hong Kong were those of unvaccinated people, but of those who had received at least one jab, the vast majority had Sinovac’s vaccine. Bloomberg

Amazon HQ

The construction of Amazon’s new African headquarters in Cape Town has been halted, after a judge ruled more consultation with First Nations groups was needed. There will also be an environmental review of the development, which is contentiously situated on wetlands with historical significance. News24

Big Tech

The Financial Times has an interesting piece on the EU’s incoming antitrust blockbuster, the Digital Markets Act, and how ineffective Big Tech’s lobbyists (including the Biden administration) have been in trying to influence its contents. Financial Times

NFT power

Bored Ape Yacht Club NFTs now unlock a new cryptocurrency called ApeCoin, giving owners of Bored Apes influence over the Bored Ape decentralized autonomous organization (DAO). Seeing as venture capitalists from Andreessen Horowitz and Animoca Brands have an outsize collection of the NFTs, that means they now have substantial influence over the “decentralized” DAO. Bloomberg

This edition of CEO Daily was edited by David Meyer.