Foreign companies should adapt to better regulated Chinese market

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Foreign companies should adapt to better regulated Chinese market

By Yuan Zhenyu (Xinhua) 09:59, August 22, 2013

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China's price regulatory and anti-trust authorities have been closely watching excessively high prices of cars produced by foreign companies and joint-ventures for over two years, sources in the National Development and Reform Commission (NDRC) told Xinhua earlier this week.

Car industry could be the latest target of a campaign launched by the Chinese government against price-fixing, monopoly and other malpractices by multinational companies. Earlier this month, the NDRC fined six foreign milk powder makers over foul play.

The monitoring, and potential investigation, aims at protecting consumers' interests and ensuring full and open competition in the Chinese market. Facing a diligent watchdog and a better regulated market here, foreign firms now need to do some homework to adapt to the new environment.

The price of an imported car in China is usually two or three times higher than that in North America. And according to Rao Da, secretary general of the China Passenger Car Association, foreign car firms make 30 percent more profit in the Chinese market than the world average.

Besides, vehicles produced by joint ventures in China are also more expensive than that of the same models abroad, raising further concerns about foreign automakers' price-fixing tactics.

Some international media outlets suggested that the campaign is driven by the "envy" of China's domestic car makers against their foreign rivals.

However, a probe into the issue will create a fair and healthy market environment, which benefits foreign and domestic firms alike and guarantees sustainable development.

In parallel with the pricing-regulatory measures, China is continuing the efforts to further open up to foreign businesses.

Two fully assembled foreign luxury cars were imported Monday at Beijing Capital International Airport, which becomes the first and only airport in China to provide airfreight service for finished cars. It will give foreign car makers another option to export cars to China, helping them save time and cut costs.

All in all, the changes in the Chinese market are in the interests of foreign companies, for which an advisable choice is to alter their market practices and play by the rules.

（Editor：ChenLidan、Gao Yinan）