Foreign firms caught in China's regulatory web
Foreign firms make easy scapegoats in Beijing's recent probes and penalties over pricing and safety of consumer products
Faced with public outcries over the high prices and safety hazards of certain consumer products, Beijing has been launching probes and levying penalties on multinational firms, some of which make easy scapegoats.
The investigation reportedly stemmed from disclosures by former US National Security Agency contractor Edward Snowden, who claimed the agency had hacked into critical network infrastructure at universities in Hong Kong and on the mainland.
Mainland regulators and the police began a series of probes in recent weeks into how foreign and domestic firms do business, following complaints from the public about unusually high prices on imported infant formula, pharmaceuticals and cars.
Earlier this month, the National Development and Reform Commission (NDRC) imposed a record 668.7 million yuan (HK$841 million) in total fines on six foreign and domestic producers of infant formula for price fixing, which breached the mainland's anti-monopoly law.
"People complained infant formula and medicines were so expensive the NDRC was under pressure to do something about it," John Gong, associate professor of economics at the University of International Business and Economics, told the South China Morning Post. "Foreign firms are easy targets because they don't have much political capital in this part of the world."
Gong said the anti-monopoly law had plenty of room to improve. Just five years old, it was an infant, compared with about 120 years of antitrust law in the United States, he said.