Well-behaved int'l firms welcomed in China

Updated: 2013-08-19 15:29


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BEIJING -- The Western media have been making a fuss about China's investigations into some international companies for business malpractices.

For instance, media reports said China is to investigate America's IBM, Oracle and EMC for security reasons. GSK and several other pharma companies were probed for bribery, while foreign automakers were targeted for price-rigging as they sold their products in the Chinese market several times more expensive than those abroad.

These investigations were regular practices in a market-oriented economy and international companies were not specially-selected targets.

Compliance with China's laws and regulations is a basic requirement for both domestic and foreign firms. Well-behaved international firms are welcomed in China, while any companies, domestic or international, should be punished as long as they violate Chinese laws and regulations.

Western media are exaggerating the investigations.

Compared to the United States, China has done much fewer investigations for security reasons.

In recent years, China's telecom giant Huawei has been repeatedly rejected for possible acquisition of American firms due to "national security concerns" raised by the US Committee on Foreign Investment.

Furthermore, US whistleblower Edward Snowden revealed that at least nine US firms have participated in the US surveillance program PRISM, which hacked deep into China's computer networks.

Therefore, it is normal and reasonable for China to conduct security probes.

It is also groundless to claim that China's investment environment has been worsened because of the probes, while instead, it has proven that China is taking steps to better regulate its market order and tighten the enforcement of laws and regulations. Well-behaved firms will benefit from it.

China's national CCTV channel reported that a certain model of German car is sold 2 million yuan (around 250,000 euros) in the Chinese market, while German customers merely pay some 70,000 euros for it.

Apart from tariffs and cost for transportation, foreign auto firms may deliberately set higher prices, or "Chinese style prices" as some domestic media nicknamed, to earn high profits.

Such malpractice, of course, has not only infringed on the interests of Chinese customers, but also damaged the market order in China, not to mention commercial briberies by Britain's GSK and other firms.

Thanks to economic globalization, international companies have become an important part of the Chinese economy. China adheres to its reform and opening-up policy, and the country welcomes foreign investment with no major policy change in sight.

However, Chinese authorities have launched a campaign against commercial bribery, monopoly, price-manipulation, adoption of hidden rules and other malpractices, striving to regulate the market order.

The battle is not targeted at foreign companies. It is aimed at creating a fairer, cleaner and better-regulated environment for economic competition.

In short, probing and punishing ill-behaved companies will increase the confidence of international firms in the Chinese market, not the other way round.