Foreign companies should comply with Chinese law

Bloomberg's Businessweek has said in a recent article that "the (Chinese) government is acting to favor local companies" after a number of enterprises, including many multinationals, were investigated or penalized for anticompetitive activities in China in recent months.

In the article, the writer also claimed that "the government wants to make sure that foreign companies understand that the Chinese are in charge."

The claim is entirely groundless. It overlooks the illegal behaviors of those multinationals.

For example, pharmaceutical giant GlaxoSmithKline (GSK). one of many multinationals punished, admitted to having bribed government officials, medical associations and doctors in order to expand sales, pushing up drug prices by as much as 30 percent.

The penalties applied to other companies, measured upon valid evidence, were also accepted by the companies.

For example, MeadJohnson and Dumex, which received huge fines after being found monopolizing prices in various ways, said they accepted the punishment and would strengthen their internal discipline to make sure their Chinese operations fully complied with the law.

It is worth noting that the investigations and punishments are not directed at multinationals only. In the baby formula industry, some Chinese companies, such as Biostime, were also punished.

Since the Antitrust Law was put in place four years ago, Chinese government agencies have investigated 49 price monopoly cases. State-owned enterprises, private enterprises and overseas enterprises have all been subjected to investigation.

Therefore, the Chinese government is in no way finding fault with multinationals. These unlawful activities will be punished in any other country in the world.

China is still a developing country and will unswervingly stick to the policy of opening up to the outside world. But China will never tolerate illegal activities.

The penalties and the investigations are a message that all enterprises operating in China, be them foreign or domestic, should play fairly.