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As Beijing steps up antitrust probe against foreign auto makers, what about the so obvious monopoly by PetroChina and Sinopec?
Opinion
Mr. Shangkong
by George Chen
Mr. Shangkong
by George Chen

Antitrust or anti-foreigner in China?

Raids on multinationals in the mainland provide a protective shield for domestic monopolies

First, it was Microsoft and then came Mercedes-Benz. Who's next?

The list of foreign firms caught up in Beijing's antitrust probe - in particular the big multinationals - is growing.

The latest target is American consultancy firm Accenture, which is linked to the antitrust investigation into technology major Microsoft.

We all deserve a fairer market and better services. Moreover, US antitrust laws have been applied to break up US corporate giants into smaller enterprises to serve these goals.

But the way Beijing has conducted its antitrust campaign is rather amusing. Government agents swooped in on the mainland offices of big corporate names on its hit list. Aside from Microsoft, they included carmakers Audi and Chrysler, and more than a dozen Japanese car component makers with plants in China. The agents seized computers and warned executives of the raided firms that they needed to cooperate with government investigations.

After news of the raids was leaked to state media, the government's propaganda machine was quickly cranked up, with salvos fired against foreign businesses in China.

The list of foreign firms caught up in Beijing's antitrust probe ... is growing

Overnight, the reputations of many of these companies had sunk, having been cast as public enemies of the Chinese consumer, running the gamut from software to cars.

But has something been missed here?

"As Beijing steps up antitrust probe against foreign auto makers, what about the so obvious monopoly by PetroChina and Sinopec?" That question was recently put forth by  Editor-in-Chief Wang Xiangwei on his Twitter account.

Some of you may remember that when Wen Jiabao was about to retire as premier, he surprised the banking sector by saying that he wanted to break up the entrenched monopoly of the big state-owned banks, in particular the Big Four. Some political analysts dismissed Wen's speech at the time as fine words but with little hope for real action.

Those analysts would appear to be right. The long wait that small private banks face just to receive operating licences points to the difficulties that lie ahead in taking market share from the Big Four. The same complaints about national monopolies can be heard in the oil and telecommunications sectors.

Beijing's willingness to take on big foreign targets in its antitrust campaign, while shying away from action against local players in domestic monopolies, raises questions abroad about whether the campaign is driven by anti-foreign business sentiment.

In an apparent attempt to address such concerns, the Commerce Ministry last week said antitrust was a "universal practice and nothing unique to China", and that foreign investors were still welcome.

Are you convinced?

 

This article appeared in the South China Morning Post print edition as: Antitrust or anti-foreigner in China?
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