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Why is the US making a fuss over China's antitrust campaign?

(People's Daily Online)    13:24, September 22, 2014
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According to the Wall Street Journal, in an unusual move US Treasury Secretary Jacob Lew, in the face of China's current antitrust probes, recently wrote a warning letter to China's Vice Premier Wang Yang, saying that investigations against foreign companies could have serious implications for relations between the two countries. Does the problem some US companies are having in China justify such a response? Why is the US making a fuss over China's antitrust campaign?

Over several months, China has stepped up enforcement of its 6 year old anti-monopoly law, which has led to investigations into Microsoft and Qualcomm for possible monopolistic practices. Earlier this month, Microsoft was asked by Chinese regulatory agencies to explain its software's compatibility and product bundling problems. Both Microsoft and Qualcomm say they are cooperating with relevant agencies in the investigations.

"There's nothing wrong with what China is doing," said Shen Dingli, deputy dean of Fudan University's Institute of International Affairs. "And the strongest evidence of that is that so far, all the companies being investigated have owned up to their conduct. If they had been wronged, they would have protested."

"There is, however, a problem with our presentation," Shen said. "Foreign companies only account for 10 percent of all the companies being investigated in this antitrust campaign. But disproportionate publicity has left people the impression that the campaign only targets foreign companies and gives unfair advantages to their Chinese counterparts, whereas in fact this is not the case."

"Our media should devote more attention to the Chinese companies that are being investigated, instead of focusing so extensively on the foreign ones," he added. "The warning the US Treasury Secretary has written to the Chinese government highlights the fact that we have not succeeded in convincing the US that we're doing the right thing."

According to an anti-monopoly enforcement progress briefing jointly held by China's National Development and Reform Commission, the Ministry of Commerce, and the State Administration of Industry and Commerce, of the 335 companies and industry associations investigated by the Commission, 33 are foreign. The cases of Microsoft and Tetra Pak, who are suspected of monopoly practices, have been filed under the State Administration of Industry and Commerce, which has dealt with 39 such cases altogether. Of these, 37 involve Chinese companies and associations, state-owned and private alike.

In fact, most countries keep a wary eye on monopoly and have enacted comprehensive and strict anti-trust laws and regulations, imposing severe punishments on violators. The Antitrust Division of the US Department of Justice itself launched nearly 100 anti-monopoly investigations in 2013. Yet in the face of similar actions in China, corporations, business communities, regulatory agencies and now the Treasury Secretary of the US are reacting in a way that makes one wonder if the good old "double standard" so commonly practiced by the US is again at play.

Of course, the favorable policies foreign companies have enjoyed in China over the years, to which they have gradually grown accustomed, have also contributed to their being ill at ease now. "But these policies cannot last forever," says Shi Yinhong, professor at the International Relations Institute of Renmin University. "And the last few years have seen several adjustments taking place, causing some western companies to complain that the investment environment in China has deteriorated."

As pointed out by many analysts, the amount of attention China's current anti-monopoly campaign is receiving also reflects the previous shortcomings in law enforcement in the country. But as China sees further economic development and institutional improvement, it will no longer be a safe haven for monopoly practices. Anti-monopoly laws and regulations will be applied equally to companies, foreign and homegrown alike, to maintain market order, ensure fair competition and protect the rights of consumers.

This article was edited and translated from 中国反垄断 美国起什么急, source: People's Daily Overseas Edition. 

(Editor:Sun Zhao、Zhang Qian)
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