China presses foreign firms into admitting guilt

A senior Chinese official put pressure on around 30 foreign firms including General Electric and Siemens at a recent meeting to confess to any antitrust violations and warned them against using external lawyers to fight accusations from regulators, sources said.

The meeting is evidence of what many antitrust lawyers in China see as increasingly aggressive tactics to enforce a 2008 anti-monopoly law and highlight a worsening relationship between foreign companies and China’s array of regulators.

Two sources who were at the July 24-25 closed-door meeting said the senior official showed in-house lawyers how to write what they called “self-criticisms” and displayed copies of letters from companies admitting guilt in past antitrust cases. Lawyers employed by some of those firms were in the room.

The two sources, and another source with direct knowledge of the meeting at a small hotel in Beijing, said the official who delivered the blunt remarks was Xu Xinyu, a division chief at the National Development and Reform Commission (NDRC).

One of the sources at the meeting said Xu noted, without being specific, that half of the companies in the room were either being investigated or had been probed by the NDRC. “The message was: if you put up a fight, I could double or triple your fines. This speech went way over the line,” the second source who attended the meeting told Reuters.

The NDRC did not respond to questions from Reuters. Xu could not be reached for comment.