Foreign companies feel China targets them in investigations

February 11, 2015 byJoe Mcdonald
In this April 20, 2014 file photo, visitors look at the latest model from Mercedes at an auto show in Beijing. Nearly half of foreign companies in China feel singled out in a wave of anti-monopoly and other investigations, and a growing number are deciding not to expand their investments, the American Chamber of Commerce in China said Wednesday, Feb. 11, 2015. (AP Photo/Ng Han Guan, File)

Nearly half of foreign companies in China feel singled out in a wave of anti-monopoly and other investigations, and a growing number are deciding not to expand their investments, the American Chamber of Commerce in China said Wednesday.

The report adds to complaints Beijing is improperly using regulation to limit foreign access to technology and other promising markets in violation of its free-trade pledges.

Some 57 percent of 477 firms that responded to an annual survey believe "enforcement campaigns target and hinder ," the chamber said in a report.

This week, Qualcomm Inc. was fined a record 6 billion yuan ($975 million) by Chinese regulators on charges its licensing practices for violated the country's anti-monopoly law. Foreign automakers and dairy suppliers also have been fined under the 2008 law.

Chinese regulators have rejected complaints that foreign companies are treated unfairly.

"We want full market access for our companies," said the chamber's chairman, Jim Zimmerman, at a news conference.

The chamber said 31 percent of companies surveyed had no plans to expand investment in China. That was up from 27 percent in a similar survey last year and 13 percent in 2013.

Market barriers add to pressure on foreign companies as China's economy cools and competition heats up. Economic growth fell last year to a two-decade low of 7.4 percent. Forecasters expect it to decline further this year.

Two out of five companies surveyed said revenue in 2014 was even with or below the previous year's level, while three out of five said profit held steady or declined, according to the chamber.

Four out of five companies said China's Internet censorship is hampering their business. Beijing tries to block access to online material deemed subversive or obscene. Some say regulators appear to be stepping up efforts to block use of , or VPN, systems to circumvent the filters.

Executives said the filters slow Internet access and hampered the movement of business data, said Mark Duval, the chamber's president.

"It wasn't a political concern," said Duval. "It was ... the effect on commercial ability to operate a business."

Technology companies also are alarmed by proposed Chinese security rules that would compel them to disclose how encryption systems work and to keep sensitive information on servers within China.

The American Chamber and a group of technology industry groups have appealed to regulators to postpone the proposal. Zimmerman said he had no new information about the proposal.

Explore further: China fines Qualcomm record $975M in anti-monopoly case (Update)

More information: American Chamber of Commerce in China: www.amchamchina.org.cn

Related Stories

China panel fires adviser over Qualcomm tie (Update)

August 14, 2014

A panel that advises China's Cabinet on anti-monopoly policy has fired an economist who was paid to help prepare a report for Qualcomm, a U.S. company that is the target of a pricing investigation, according to state media.

China investigating Qualcomm, InterDigital (Update)

February 19, 2014

Regulators are investigating whether U.S. technology companies Qualcomm and InterDigital violated China's anti-monopoly law by charging excessive fees for patent licenses, a government spokesman said Wednesday.

Group calls on China to improve Internet security

April 24, 2013

An American business group appealed to China on Wednesday to improve online security and ease restrictions on Web use by companies, warning that deteriorating access speeds might discourage foreign investment.

Report: China to declare Qualcomm a monopoly

July 25, 2014

(AP)—Chinese regulators have concluded Qualcomm Inc., one of the biggest makers of chips used in mobile devices, has a monopoly, a government newspaper reported Friday.

Recommended for you

A novel approach of improving battery performance

September 18, 2018

New technological developments by UNIST researchers promise to significantly boost the performance of lithium metal batteries in promising research for the next-generation of rechargeable batteries. The study also validates ...

Germany rolls out world's first hydrogen train

September 17, 2018

Germany on Monday rolled out the world's first hydrogen-powered train, signalling the start of a push to challenge the might of polluting diesel trains with costlier but more eco-friendly technology.

Technology streamlines computational science projects

September 15, 2018

Since designing and launching a specialized workflow management system in 2010, a research team from the US Department of Energy's Oak Ridge National Laboratory has continuously updated the technology to help computational ...

1 comment

Adjust slider to filter visible comments by rank

Display comments: newest first

Maritxu
5 / 5 (1) Feb 11, 2015
well, then good news, more companies will return to Europe or US. They start to realize that being in China only for paying low wages is not the smartest solution. A communist country is not where I would place my company, for sure.

Please sign in to add a comment. Registration is free, and takes less than a minute. Read more

Click here to reset your password.
Sign in to get notified via email when new comments are made.