Foreign Firms Feel 'Targeted' In China's Anti-Monopoly Drive

Foreign companies are increasingly concerned they are being targeted by Chinese anti-trust regulators, a new study by the American Chamber of Commerce has found. The firms think anti-monopoly laws are unevenly enforced.

The American Chamber of Commerce in China released figures Tuesday showing that an increasing number of foreign companies operating in China were concerned about "selective and subjective enforcement" of the country's anti-monopoly rules.



A survey of 164 companies showed 49 percent of respondents felt foreign companies were being singled out in recent pricing and anti-corruption campaigns. About 25 percent said they were uncertain, or didn't know, while 26 percent said no. Last year, the percentage of companies unhappy with Chinese regulators was 40 percent.



Chamber Vice President Lester Ross told reporters in Beijing that foreign companies welcome in principle China's anti-monopoly drive. But it was felt that regulators were using "extra-legal" means to conduct their investigations.



"They have taken what are, in many instances, vague or unspecified provisions in the law and moved to enforce them, and sought to enforce those means through processes that do not respect the notion of due process or fairness," Ross said.



In 2008, China introduced new anti-monopoly legislation under efforts to ensure fair competition in China's growing markets and to crack down on corruption. But some analysts say state regulators such as the National Development Reform Commission (NDRC) were using their powers to shield domestic companies from foreign competition.



Industries recently targeted by NDRC and its counterpart, the State Administration for Industry and Commerce (SAIDC) include car manufacturers, pharmaceuticals, medical devices and high technology.



NDRC Director General Xu Kunlin, however, rejected the accusations and reiterated that local and foreign companies were being treated equally by the agency.



"Some of the NDRC monopoly investigations involve overseas multinationals, but that does not mean that we are targeting them," Xu told the official China Daily newspaper Tuesday.



Noting that state-owned Chinese firms were also currently under investigation, he said that some businesses had failed to adjust their practices to the new law while others were taking chances that they may escape punishment.



Last month, the European Union Chamber of Commerce in China also expressed concern about the anti-monopoly investigations. It said it had received reports that companies were pressured by regulators to accept penalties without a full hearing and without involving their governments.



uhe/ng/sgb (AP, Reuters)