Fair play

By Li Qiaoyi Source:Global Times Published: 2014-12-8 23:18:03

Foreign firms not being singled out in antitrust campaign: officials

China has ramped up efforts to tackle monopolistic practices recently, and some foreign companies believe they have been unfairly targeted in the process. But at the Multinational Companies Investment Forum hosted by the Global Times on Saturday, officials said that their only goal was to create a level playing field for everyone.

Government officials, scholars and business executives attend the Multinational Companies Investment Forum hosted by the Global Times on Saturday. Photo: Cui Meng/GT

In the past two years, China has made increasing efforts to tackle monopolistic activities, a process that has also uncovered anti-competitive behavior by a slew of noted foreign-backed businesses.

This has caused a certain degree of anxiety among some foreign businesses and organizations operating in China, who fear they are perhaps being targeted.

In the latest official comments to ward off such fears, Xu Kunlin, head of the Department of Price at the National Development and Reform Commission (NDRC), stressed over the weekend that the country's strengthened law enforcement in combating antitrust activities is aimed at "establishing a unified mechanism for market opening and orderly competition" in order to let markets play a decisive role in the allocation of resources.

All market participants have been treated equally, said Xu, adding that  "there has been no such thing as selective enforcement" since the Anti-Monopoly Law went into effect on August 1, 2008.

Xu, who is also director of the Price Supervision and Inspection and Anti-Monopoly Bureau at the NDRC, made the comments while giving a speech at the first Multinational Companies Investment Forum, which was held in Beijing on Saturday.

The country's three antitrust regulators are the NDRC, the Ministry of Commerce and the State Administration for Industry and Commerce (SAIC).

A number of foreign businesses have been investigated by antitrust authorities in China since 2013, including US mobile chip giant Qualcomm Inc, US software titan Microsoft Corp and Swiss food packaging firm Tetra Pak, sparking complaints about whether foreign firms are being singled out amid China's anti-monopoly drive.

Back in September, the American Chamber of Commerce in China released a statement saying that the chamber's members had "a growing perception that multinational companies are facing selective and subjective enforcement by Chinese government agencies."

Joerg Wuttke, president of the EU Chamber of Commerce in China, also told the Global Times in October that "European businesses hope that the transparency and impartiality of court decisions will be increased and the confidentiality of legal and administrative proceedings will be guaranteed."

No local bias 

Recent antitrust investigations have not been targeting foreign businesses, Wang Jun, an economist at the China Center for International Economic Exchanges (CCIEE), a Beijing-based think tank, told the Global Times on Sunday. In fact, in the last three decades, these overseas firms have actually been given preferential treatment in areas such as taxation, Wang noted.

The claim that China's investment climate is getting worse owing to the antitrust campaign is just a misunderstanding, Wang remarked.

The increase in the number of antitrust probes in the last two years is partly because the first few years after the law came into force were devoted to preparation work and laying the foundations for its enforcement, Xu noted at the forum.

He also said that anti-monopoly probes have involved far more domestic companies and industry bodies than overseas enterprises.

From 2013 to the present, the NDRC and anti-monopoly law enforcement agencies at the provincial level nationwide have launched price-fixing probes and made due punishment decisions involving 208 businesses and organizations. Of that number, only 27 were overseas enterprises. All the others were domestic industry associations and enterprises, as well as one Chinese administrative agency.

Between 2008 and 2012, 131 businesses and organizations were investigated, with only one case involving overseas companies, according to statistics disclosed by Xu at the forum.

Xu said that probes into administrative monopolies involving government agencies will be among the priorities for the NDRC in 2015.

In response to complaints filed by the South Korean Embassy in China that North China's Hebei Province had halved the normal highway toll fees exclusively for local transportation companies, the commission launched an antitrust probe into the local government in September, which prompted Hebei to halt the issuance of discriminatory policies.

Another antitrust regulator, the SAIC, offered more evidence at the forum that the country's antirust actions have been unbiased so far.

Over the past six years since the Anti-Monopoly Law became effective, industry and commerce administration authorities have opened 43 anti-monopoly probes covering a variety of areas such as public services, construction materials, tobacco, insurance and travel. Of these, only two cases involved foreign businesses, namely Tetra Pak and Microsoft, Ren Airong, director of the Anti-Monopoly and Anti-Unfair Competition Enforcement Bureau at the SAIC, told the forum on Saturday.

Both Xu and Ren said relevant government agencies have also been trying to improve transparency through efforts such as public disclosure of the progress of the investigations.

Foreign investment needed

Long Yongtu, chairman of the Center for China and Globalization, a top think tank, said at the forum that foreign capital will continue to be an important fountain of investment to drive growth and innovation in the Chinese economy.

"China will never politicize the issue of foreign investment and ride a nationalist wave," said Long, who was also China's chief negotiator during the country's accession to the WTO.

Recent data pointing to weak growth in foreign direct investment (FDI) is due to China's rising labor costs and sluggish recovery in the US and EU, which have eroded foreign investors' sentiment toward investment in the country, Wang Yongzhong, a research fellow at the Institute of World Economics and Politics under the Chinese Academy of Social Sciences (CASS), told the Global Times on Sunday.

But that doesn't mean foreign capital has lost its importance as a pillar for China's economic growth, he said.

FDI flows into the country came to $95.9 billion in the first 10 months, down 1.2 percent year-on-year, data from the Ministry of Commerce showed in mid-November.

William S. Niebur, vice president of global chemical and technology conglomerate DuPont, told the forum that he was optimistic about the future for foreign firms in China.

"We will need to figure out how we operate our businesses to avoid a monopolistic situation and to avoid [inappropriate competitive practices]," he said, adding that this would give foreign companies more "legitimacy in the modern environment."

Hu Weijia contributed to this story

Posted in: Insight

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