Note: This is hypothetical; the Dalai Lama is still very much alive. But he turned ninety last year, which means his passing would have to be expected within the next few years.
My guess is that this will lead to diplomatic rifts. There will be two children put forward as competing candidates for his succession/rebirth. One will be an ethnic Tibetan but born and raised outside Tibet (probably some other Asian country with a sizable Tibetan community, such as India), put forward by the Central Tibetan Administration (the government in exile); the other will be a child born in Tibet, presented by the Chinese-controlled government of Tibet. Both will lay claim to the title of Dalai Lama. Western celebrities who associate themselves with Buddhism or otherwise support it will lean towards the CTA candidate. The government of the PRC, however, will use its economic and political influence to coax government into treating their candidate as the true Dalai Lama. Chinese communities in other countries will also take sides depending on whether they are pro or contra-CCP, and this will bring the tensions to the territories of other countries.
Does the current or future Dalai Lama have any diplomatic or political status? (Or spearhead any rebel independence movement that could receive support sub rosa?) Why would, say, the French Republic formally treat with him at all?
I believe that the Dali Lama has stated that he will be the last Dali Lama and has chosen not to reincarnate. So I don’t believe one can just be appointed and be legitimate.
Also, the Chinese see him as we see Osama Bin Ladin. Why would they even want one to exist?
There is a significant population of Tibetans who believe in him and the sorta-religion he sorta-leads. Not trying to be disrespectful here, just not wanting to get into the weeds about what terminology to use to describe his spiritual role.
The Chinese absolutely want a puppet Dalai Lama because it’s another lever they can use to control that population.
The legit Tibetan government in exile absolutely want a “real” Dalai Lama because that is another pushback at the hated Chinese occupying their country. And a way to have influence over the Tibetan believer population. For damned sure they want one beholden to them.
To the degree there’s a religious establishment under / behind the Dalai Lama, those folks also want a really real replacement from their ranks to continue the line of their whole spiritual undertaking.
It’s going to be a mess, but the big fight will be between the real one(s) and the fake Chinese stooge.
He’s a bit like the Pope, metaphorically speaking. Like the Pope, he has no divisions. Unlike the Pope, he doesn’t run a huge multinational business. Like the Pope, he makes anodyne pronouncements on aspirational human behavior vis-a-vis current events. And like the Pope, he represents a sort of “force for good” in the world.
Unless you’re an authoritarian ethnocentric government trying to subdue his people of origin. As a result of that, the “good” countries end up lining up to support him diplomatically, at least at the jaw-jaw level.
That’s what makes him diplomatically and politically significant outside of Tibet.
If we do end up with two competing Dalai Lamas, we’ll end up with a situation akin to the dilemma of Taiwanese diplomatic recognition: Which China will other countries recognize as the “real one” when the more powerful mainland takes the option of recognizing both off the table?
Essentially everyone will be forced to choose a side, even if they try to do it quietly. And China will make as much propaganda hay as they can of every choice, explicit or implicit, that goes their way.
What does “real” even mean in this situation? The succession doesn’t even have the dubious benefit of a royal bloodline. Both sides are going to indoctrinate their candidate to their way of thinking. Frankly, the whole ordeal is politically justified child abuse on both sides.
If he chooses not to reincarnate, does that mean that he believes that he has learned all that there is to know? If he believes that, isn’t that hubris, and so doesn’t he have more to learn?