Tuesday, September 2, 2014

#China losing its sheen as big FDI catcher

American Chamber of Commerce in China has aired its grievances over a series of investigations scrutinising at least 30 foreign firms, as China seeks to enforce a 2008 anti-monopoly law.
Chamber Vice Chairman Lester Ross told reporters the major expansion of enforcement was welcome in principle, but regulators were using "extra-legal" means to conduct investigations.
 The European Union Chamber of Commerce in China also expressed concern last month about the anti-monopoly investigations. It said it received reports companies were pressured by regulators to accept penalties without a full hearing and avoid involving their governments.



Industries targeted by Chinese regulators include pharmaceuticals, medical devices, high technology and autos. There have been concerns that Chinese regulators might be "taking down" foreign companies to narrow the gap with Chinese competitors.
Beijing has recently announced fines totaling $202 million against 12 Japanese auto components suppliers on charges of price-fixing as part of a sweeping investigation of the industry. Officials say Mercedes Benz, Audi and Chrysler also will face punishment. In separate probes, Microsoft and chip maker Qualcomm are facing scrutiny.



Uncertainty over regulatory conditions adds to challenges for foreign companies at a time when China's growth is slowing and they face competition from ambitious rivals like India under PM Modi's rule.Growth of 7.5 percent in the three months ended in June was barely half of 2007's rate of 14.2 percent.
China is one of the world's top investment destinations. The government says it receives in excess of $100 billion a year, but economists say a large share of that money is brought home by Chinese companies.
National Development and Reform Commission (NDRC) of the People's Republic of China (PRC), a primary regulatory authority for foreign investments in the PRC has announced interim measures that all foreign investment projects are subject to the approval of the NDRC or its local counterparts.