Asia Economy
European Chamber says China's anti-trust probes unfairly target foreign firms
By Finfacts Team
Aug 14, 2014 - 8:25 AM

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The European Chamber  of Commerce in China suggested on Wednesday that China's anti-trust probes are unfairly targeting foreign  firms with different rules applying to domestic firms.

The Wall Street Journal says that the call comes as foreign businesses have come under pressure in China, where regulators are attempting to level the corporate playing field by using anti-trust laws against multinational companies. The auto sector in particular has been under government watch, with regulators launching probes of anti-competitive behaviour.

The European Union Chamber in China, which has 1,800 members said in a statement Wednesday that members had presented "alarming" accounts that intimidation tactics are being used to force companies to accept punishment without full hearings. Chinese authorities are advising companies not to challenge investigations or seek legal or government assistance, the statement said.

The Chamber added: "While the European Chamber recognises that a number of Chinese companies have been investigated for AML violations, the European business community is also increasingly considering the question of whether foreign companies are being disproportionately targeted in the investigations.

In some of the industries under investigation, domestic companies have not been targeted for similar violations. Furthermore, in some cases that involve joint ventures, it has only been the foreign partner that has been named as being a party to the investigations. A core tenet of a globalised economy is that all business operators, regardless of nationality, should be held accountable to the same criteria and be treated equally. Competition law should not be used as an administrative instrument to harm targeted companies or serve other aims, such as administratively forcing price reductions."

The Journal comments that several China-based foreign economists echo the call to ease restrictions and probes of foreign companies, stating that Chinese authorities should be working to chip away at policies favoring state-owned companies.

"The best thing Beijing can do to help the private sector is to take an axe to the bloated, inefficient and graft-ridden state-enterprise sector, and shatter the glass ceiling that prevents private firms from becoming the dominant players in any industry other than the Internet," Arthur Kroeber, of Beijing-based consultancy Dragonomics, said in a report.

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