China proving to be a tough place for US firms

[greengiraffe]

PUBLISHED JULY 31, 2014
China proving to be a tough place for US firms

Treading with care: Chinese state media have criticised Microsoft, Google and Apple for allegedly cooperating with a US spying programme; Qualcomm in November disclosed an anti-monopoly investigation. - PHOTO: AFP
[WASHINGTON] Microsoft Corp joins a growing list of companies relying on growth in China, yet crashing against the reality of a market still prone to protectionism, unpredictable laws and unreliable suppliers.
Just this month, Chinese regulators opened an anti-monopoly investigation into Microsoft, and state media accused Apple Inc of using its iPhone to steal state secrets. In May, Chinese authorities alleged GlaxoSmithKline plc sales people bribed doctors and hospitals to boost sales.
Foreign companies from many industries are increasingly encountering the challenges of doing business in China - whether from efforts by Chinese officials to give homegrown businesses a leg up or in response to a US crackdown on the country's alleged theft of corporate secrets. As a result, China has dropped from the top investment priority for members of the US Chamber of Commerce to the top three, said Jeremie Waterman, the chamber's executive director for greater China.
"Views of the market are clearly undergoing a transition," said Mr Waterman, who's based in Washington. "The environment is arguably growing more difficult."
Annual Chinese investment in the US now exceeds American foreign direct investment flows to China, according to the Rhodium Group, a New York-based consultancy.
Through the first five months of the year, foreign enterprises invested US$48.9 billion in China, up 2.8 per cent from the same period one year earlier. Investment from the US fell more than 9 per cent while the European total dropped by 22 per cent, according to the Chinese Ministry of Commerce.
The worsening business environment coincides with efforts by President Xi Jinping to tighten his grip on power and show ordinary Chinese that he's serious about battling official corruption. On Tuesday, Beijing announced an official investigation into the nation's former security czar, Zhou Yongkang, the loftiest official to be probed for graft since the Communist Party took power 65 years ago.
It's not that US companies have lost their appetite for the world's second-largest economy. China is a US$300 billion market for US firms that will get even larger as the middle class doubles to 600 million people in the next decade, according to the US-China Business Council, which counts Walmart and Apple among its more than 200 members.
And despite the worsening climate, most companies have no choice but to stay in a growing market of 1.4 billion people, said Robert Atkinson, president of the Information Technology and Innovation Foundation.
For some, China is a production hub where products are assembled for the global market. For other companies, China's growing consumer class represents the growth market of tomorrow - however difficult it is to operate there.
"It's hard for them to walk away," Mr Atkinson said. "They just can't do that with China."
Still, growing strains between Beijing and Washington are shadowing US commercial interests. In May, American prosecutors indicted five Chinese military officers for allegedly stealing corporate secrets. Since then, Chinese state media have criticised Microsoft, Google Inc and Apple for allegedly cooperating with a US spying programme; Qualcomm Inc in November disclosed an anti-monopoly investigation.
China is also asserting itself economically while the US is distracted by the Israeli-Palestinian conflict, instability in Iraq, tensions over Ukraine and other geopolitical hotspots, said Richard D'Aveni, a professor of strategy at the Tuck School of Business at Dartmouth College in Hanover, New Hampshire.
Amid rising wages and growing barriers to doing business, some companies are doing the once unthinkable: pulling the plug.
L'Oreal SA, the world's largest cosmetics company, said in January that it will stop selling Garnier-brand products in China, eight years after it introduced the skincare and hair dye maker in that country. L'Oreal will focus on marketing the L'Oreal Paris and Maybelline brands there. Revlon Inc will cease operations and eliminate about 1,100 positions in the country, the New York-based company said on Dec 31.
Actavis plc, the second-biggest generic drugmaker by market capitalisation, also has said that it will end its presence in China because of the difficult business climate. The company has sold one operation there and is in talks to sell another.- Bloomberg

[greengiraffe]

Looks like quite a number of profitable global brands are having hard time in China...

http://www.ft.com/cms/s/0/82196e0a-1c8f-...abdc0.html

August 5, 2014 12:58 pm
Mercedes-Benz questioned in China pricing probe
By Jamil Anderlini in Beijing

Shanghai, CHINA: A salesman walks past a Mercedes S-class sedan at a showroom in Shanghai after the firm announced a 57 percent increase in car sales in China and Hong Kong during the first four months of the year, 30 May 2006. Mercedes plans to invest 1.5 billion euros (1.8 billion USD) to produce cars in China, where a booming economy has created a growing class of 160 million 'luxury consumers', accounting for 13 percent of the country's total population, according to research by the semi-official China Brand Strategy Association. AFP PHOTO/Mark RALSTON (Photo credit should read MARK RALSTON/AFP/Getty Images)©Getty
Chinese antitrust investigators have raided the Shanghai offices of Mercedes-Benz as a government investigation into price fixing by global automakers in the country intensifies.
Nine investigators from China’s National Development and Reform Commission arrived unannounced at the offices at about 10am on Monday and spent much of the day interviewing Mercedes executives, according to Chinese media reports, confiscating computers when they left.
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A spokesman for Daimler, which owns the Mercedes brand, confirmed the raid and the investigation and said the company was co-operating with the NDRC.
The incident came a day after Mercedes said it would cut prices from next month on more than 10,000 spare parts in China by an average of 15 per cent in an apparent attempt to placate government investigators.
That price reduction came after a steep cut in prices for maintenance and repair services announced by Mercedes last month.
The widening inquiry into price-fixing by foreign automakers is just the latest anti-monopoly action taken by Beijing against foreign companies in China.
Similar investigations have already forced steep price cuts in foreign-branded pharmaceuticals and infant formula.
Analysts say separate investigations into Microsoft and Qualcomm, which provides the chips for nearly all high-end phones using China’s new 4G standard, are likely to have a similar outcome.
This week the government also effectively banned two top foreign antivirus software companies from the Chinese market, citing cyber security concerns and the need to nurture domestic players in the industry.
US-based Symantec, which was the market leader in China’s corporate antivirus market last year, and Russia’s Kaspersky Lab have been banned for government procurement at the same time as five domestic competitors have been approved.
The wave of cases involving big-name foreign companies during the past year has led to complaints that the government is unfairly targeting multinationals as part of a campaign of economic nationalism.
“The government has actually investigated some Chinese companies as well, but the NDRC does not publicise those cases because there are too many special interests involved,” said Liu Xu, a researcher at the intellectual property and competition law research centre of Tongji university in Shanghai.
“Foreign companies are relatively co-operative, polite and law abiding and they won’t generally try to get senior cadres involved to make these cases go away.”
The raid on Mercedes’ Shanghai office comes a week after other global luxury carmakers, including Jaguar Land Rover and Audi, said they would cut retail prices for popular models or auto parts.
Between them, Germany’s Audi, Mercedes and BMW control more than 70 per cent of China’s luxury car market.
In the first half of this year Audi sold nearly 270,000 vehicles, BMW 211,000 and Mercedes 136,000, a 38 per cent increase from the same period a year earlier.
Additional Reporting by Gu Yu and Christian Shepherd.

[greengiraffe]

You are here: Home »World
ANGUS GRIGG
In a rare moment of candour, China declares economic war
PUBLISHED: 7 HOURS 25 MINUTES AGO | UPDATE: 0 HOUR 0 MINUTES AGO
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In a rare moment of candour, China declares economic war
As China strives for its next growth phrase and the greater strategic influence that comes with it, it looks to be fighting on two fronts.  Photo: Bloomberg
China observed
ANGUS GRIGG AFR correspondent
Very occasionally a Chinese government official is totally frank.

On a recent afternoon at a cafe in Shanghai a person with links to the security services put aside the platitudes about “trust and mutual respect” and laid out China’s relationship with the US and its allies.

“It’s an economic war,” he said.

Since that pronouncement there has been plenty of evidence to suggest the official was well informed, as Beijing has spent the summer taking aim at foreign companies.

Just this week it began antitrust investigations into software giant Microsoft, chip maker Qualcomm and consulting firm Accenture. Car makers Audi, Daimler and Chrysler have also been targeted and are either under investigation or deemed to have engaged in monopolistic behaviour.

And just to top it off, the trial of British corporate investigator Peter Humphrey and his American wife, Yu Yingzeng, begins on Friday. They are charged with illegally obtaining and selling private information, while investigating corruption allegations made against pharmaceutical giant GlaxoSmithKline. Jail time, fines and plenty of negative coverage in the press can be expected for all involved.

BUSINESS CLIMATE WORSENS
This is sure to prove uncomfortable, but the far-bigger issue is the broader business climate in China, which looks to be turning very negative towards foreign companies and their employees.

That brings us back to idea of an economic war. As China strives for its next growth phrase and the greater strategic influence that comes with it, it looks to be fighting on two fronts.

The first front was opened years back when industrial scale hacking operations began. Much of this cyber espionage was directed at foreign firms and was complemented by Chinese nationals working in them.

The most-recent list of charges brought by the US Department of Justice alleges Chinese hackers working for the People’s Liberation Army stole trade secrets from US Steel, aluminium maker Alcoa, renewable energy company Solar World and Westinghouse Electrical, a nuclear power developer.

In May, the US brought charges against the five Chinese hackers it believed responsible, triggering yet another round of name calling between the super powers.

Hostilities on this front look to have died down recently, as a second battle erupted on the home front.

This involves targeting foreign companies with antitrust suits and corruption investigations.

The charges against Microsoft, GSK and the auto makers may yet be proven in court, but they appear highly political when no similar cases have been opened against Chinese companies.

The motivation from Beijing is pretty clear. It wants to build a suite of national champions that can become global players. With the exception of the ever controversial Huawei, appliance maker Haier and perhaps technology company Tencent, this is still a work in progress.

CAR TROUBLE IN CHINA
And there have been some notable miss-steps. Efforts to develop a domestic auto industry have largely failed. Local car brands such as Roewe and BYD accounted for just 20.9 per cent of sales in the June quarter. Their market share has been declining for the past 10 months and is now the lowest since 2009.

Chinese consumers have clearly shown a preference for Porsche, Mercedes and Audi at the top end and mass market cars made by VW, Ford and General Motors.

It should be noted China has not entirely missed out on profiting from this demand for foreign cars, as many are manufactured locally under joint ventures with the global auto makers.

But China has not yet fulfilled its ambition of building a national car that can be exported to the world.

This may yet come via electric vehicles, although their take up has been slow in China despite incentives.

The poor performance of the local auto brands may partially explain the antitrust actions against the big global players. Beijing looks to be trying to give them a leg up by destabilising their foreign rivals.

Its motives appear similar in targeting Microsoft and Qualcomm. Now everyone is wondering who will be targeted next in this “economic war”?

The Australian Financial Review

[greengiraffe]

ANGUS GRIGG
In a rare moment of candour, China declares economic war

PUBLISHED: 08 AUG 2014 00:05:00 | UPDATED: 08 AUG 2014 11:19:24

In a rare moment of candour, China declares economic war
As China strives for its next growth phrase and the greater strategic influence that comes with it, it looks to be fighting on two fronts.  Photo: Bloomberg
China observed
ANGUS GRIGG AFR correspondent
Very occasionally a Chinese government official is totally frank.

On a recent afternoon at a cafe in Shanghai a person with links to the security services put aside the platitudes about “trust and mutual respect” and laid out China’s relationship with the US and its allies.

“It’s an economic war,” he said.

Since that pronouncement there has been plenty of evidence to suggest the official was well informed, as Beijing has spent the summer taking aim at foreign companies.

Just this week it began antitrust investigations into software giant Microsoft, chip maker Qualcomm and consulting firm Accenture. Car makers Audi, Daimler and Chrysler have also been targeted and are either under investigation or deemed to have engaged in monopolistic behaviour.

And just to top it off, the trial of British corporate investigator Peter Humphrey and his American wife, Yu Yingzeng, begins on Friday. They are charged with illegally obtaining and selling private information, while investigating corruption allegations made against pharmaceutical giant GlaxoSmithKline. Jail time, fines and plenty of negative coverage in the press can be expected for all involved.

BUSINESS CLIMATE WORSENS
This is sure to prove uncomfortable, but the far-bigger issue is the broader business climate in China, which looks to be turning very negative towards foreign companies and their employees.

That brings us back to idea of an economic war. As China strives for its next growth phrase and the greater strategic influence that comes with it, it looks to be fighting on two fronts.

The first front was opened years back when industrial scale hacking operations began. Much of this cyber espionage was directed at foreign firms and was complemented by Chinese nationals working in them.

The most-recent list of charges brought by the US Department of Justice alleges Chinese hackers working for the People’s Liberation Army stole trade secrets from US Steel, aluminium maker Alcoa, renewable energy company Solar World and Westinghouse Electrical, a nuclear power developer.

In May, the US brought charges against the five Chinese hackers it believed responsible, triggering yet another round of name calling between the super powers.

Hostilities on this front look to have died down recently, as a second battle erupted on the home front.

This involves targeting foreign companies with antitrust suits and corruption investigations.

The charges against Microsoft, GSK and the auto makers may yet be proven in court, but they appear highly political when no similar cases have been opened against Chinese companies.

The motivation from Beijing is pretty clear. It wants to build a suite of national champions that can become global players. With the exception of the ever controversial Huawei, appliance maker Haier and perhaps technology company Tencent, this is still a work in progress.

CAR TROUBLE IN CHINA
And there have been some notable miss-steps. Efforts to develop a domestic auto industry have largely failed. Local car brands such as Roewe and BYD accounted for just 20.9 per cent of sales in the June quarter. Their market share has been declining for the past 10 months and is now the lowest since 2009.

Chinese consumers have clearly shown a preference for Porsche, Mercedes and Audi at the top end and mass market cars made by VW, Ford and General Motors.

It should be noted China has not entirely missed out on profiting from this demand for foreign cars, as many are manufactured locally under joint ventures with the global auto makers.

But China has not yet fulfilled its ambition of building a national car that can be exported to the world.

This may yet come via electric vehicles, although their take up has been slow in China despite incentives.

The poor performance of the local auto brands may partially explain the antitrust actions against the big global players. Beijing looks to be trying to give them a leg up by destabilising their foreign rivals.

Its motives appear similar in targeting Microsoft and Qualcomm. Now everyone is wondering who will be targeted next in this “economic war”?

The Australian Financial Review

BY ANGUS GRIGG

[greengiraffe]

China probe turns on foreign firms

Angus Grigg and Lisa Murray AFR correspondents
802 words
11 Aug 2014
The Australian Financial Review
AFNR
English
Copyright 2014. Fairfax Media Management Pty Limited.
Shanghai The aggressive use of anti-monopoly laws against foreign companies by the Chinese government is unprecedented and raises the risk for multinational firms operating in the world's second biggest economy, according to business leaders.

Over the last two weeks, China has accused at least 20 high-profile American, Japanese and German companies of breaching competition laws, while excluding Apple products from a government procurement list.

"We've never seen anything like this before," Geoff Raby, a former Australian ambassador in Beijing and now a company director, said.

"This is big and the stakes are very high. It would not be happening without senior level endorsement [from the Communist Party]."

China has opened up investigations against software giant Microsoft, chip maker Qualcomm, consulting firm Accenture and car maker Chrysler, all from the US. German car makers Audi, BMW and Daimler have also been targeted, as has Toyota from Japan and 12 of its compatriot car-parts makers.

"There are many foreign companies that believe they are being targeted by the Chinese government," Kenneth Jarrett, a former director of Asian Affairs at the National Security Council in Washington, who is now President of the American Chamber of Commerce in Shanghai, said.

"I'm more than just concerned" he said. "The [anti-monopoly] laws are not being applied equally to foreign and domestic firms."Aussie firms could be next target

Australian companies have so far avoided the crackdown, but could be targeted if the probe spreads to the imported food sector, medical equipment makers, construction or mining.

The Chinese government has often accused the big global miners of colluding to keep the iron ore price artificially high, but has softened its rhetoric in recent months as a surge in new supply pushed the price below $US100 a tonne.

As the mining boom subsides, to be replaced by what many are calling a "dining boom", the Australian agricultural sector is becoming increasingly reliant on China and could be vulnerable to a crackdown.

The Chinese government banned imports of Australian chilled beef last August, in what many saw as a political decision to protect local producers and remind Canberra about its economic reliance on Beijing.

Foreign milk powder producers were also targeted by China's anti-monopoly laws last year.

Peter Arkell, chairman of the Australian Chamber of Commerce in Shanghai, said companies needed to remember that many shortcuts taken in the past were no longer acceptable. "Life is changing here and becoming more regulated. The authorities are no longer turning a blind eye to things they had in the past," he said.

Mr Jarrett, who spent 26 years with the State Department, mainly focused on China, said he'd never seen such a concerted campaign against foreign companies, who complained that enforcement of the law often lacked transparency.

"Every day you wake up and another big foreign company is being investigated. The biggest question is how closely this is linked to Chinese industrial policy," he said.

"Is China frustrated that its own auto industry is losing market share?"

Local car brands accounted for 20.9 per cent of sales in the June quarter, the lowest level since 2009 and their market share has been declining for the past 10 months.Aiming to promote fair competition

China's Ministry of Commerce denied on Saturday that its anti-monopoly probes were targeting foreign firms.

A spokesman for the department, Shen Danyang, said the probes aimed to root out monopolistic practices, promote fair competition and protect consumer interests.

China's anti-monopoly laws were enacted in 2008 and have the power to fine companies up to 10 per cent of their annual revenue.

"Over the past six years since the anti-monopoly law took effect, both domestic and foreign firms have been probed," the spokesman said.

Marc Waha, a Hong Kong-based lawyer at Norton Rose, said the number of anti-trust investigations into foreign companies had increased over the past two and a half years.

"There are aggressive investigation techniques being used in cases which typically don't lend themselves to these techniques," he said.

Mark Jephcott, head of the competition practice in Asia for Herbert Smith Freehills, said that until 18 months ago, China rarely used its anti-monopoly laws. "It's fair to say the sleeping giant has awoken," he said.

Mr Raby, who is a non-executive director of Fortescue Metals Group and vice-chairman of Macquarie Group in China, believes the targeted actions are less about a desire to promote domestic industries and more about geo-political tensions.

"This is probably the first time China has really flexed its muscles," he said.

"They realise there are many huge international corporations that are now dependent on the China market."


Fairfax Media Management Pty Limited

Document AFNR000020140810ea8b0001v

[greengiraffe]

Audi to accept Chinese anti-monopoly penalty
AAP AUGUST 11, 2014 9:30PM

German luxury car brand Audi will accept punishment from Chinese authorities for breaching anti-monopoly laws in the world's largest car market, it says.

An investigation by Chinese authorities found that an Audi dealer network had "violated national anti-monopoly laws", the brand's China arm said in a statement, adding the Audi joint venture involved had "closely cooperated with the investigation and will accept a penalty".

The statement came after China's National Development and Reform Commission (NDRC), which polices violations of "anti-monopoly" law, said it had been investigating the sector - dominated by foreign companies and their joint ventures - for more than two years.

It is the latest sweeping probe China has launched into alleged wrongdoings by foreign firms in multiple different fields, among them pharmaceuticals, technology and baby milk.

Audi is owned by the German car firm Volkswagen, which set up a joint venture with Chinese auto giant FAW to manufacture Audis and other models.

"Management processes in the sales and dealership structure are getting improved to prevent similar incidents in the future," the Audi China statement added.

It did not explicitly state that Audi acknowledged any wrongdoing.

But it added: "Audi and FAW-Volkswagen attach great importance that all applicable antitrust and competition laws are adhered to."

[greengiraffe]

How to survive a dawn raid in China
PUBLISHED: 11 AUG 2014 18:53:00 | UPDATED: 12 AUG 2014 09:16:17

How to survive a dawn raid in China
Raids by Chinese authorities against Western companies have spawned a cottage industry in preparing multinational companies on some basic do's and don’ts in the event of a surprise visit. Photo: Reuters
In the early afternoon of Monday, August 4, 10 men in suits and casual business wear barged into a busy office at Daimler’s Mercedes-Benz's east China sales office, near Shanghai's Hongqiao international airport.

"People were starting a new week and were just back from lunch, when the men arrived," says a person familiar with the scene. "They didn't have the slightest idea they were coming to rip the office apart and question people for data and information for the next 10 hours," he says, adding the men were antitrust investigators from China's National Development and Reform Commission.

Such US and European-style "dawn raids" have become a powerful weapon for China's increasingly aggressive antitrust enforcement agencies, the NDRC and the State Administration for Industry and Commerce, allowing them to seize evidence that may aid broader probes into antitrust violations or corruption.

Several major foreign companies have been raided in recent months – from car and drugs manufacturers to technology firms such as US software giant Microsoft Corp – as China steps up enforcement of a 2008 anti-monopoly law.

The raids have spawned a cottage industry in preparing multinational companies on some basic do's and don’ts in the event of a surprise visit.

Companies are giving staff practical coaching, including holding mock raids, and bringing in legal experts to train them on how to handle intense, on-the-spot questioning, negotiate cultural hurdles, and make contingency arrangements to source emergency legal advice.

"We're seeing an increase in the sophistication of the enforcement agencies, and personnel," says Marc Waha, a partner in the antitrust practice at law firm Norton Rose Fulbright in Hong Kong. "They've spent a lot of time with other agencies in Germany and Europe learning about conducting investigations and the value of onsite inspections. That's why we're seeing more active enforcement."

WILD WEST
Companies operating in China have few rights with respect to dawn raids, and laws about what evidence can be seized – such as original documents and files rather than copies – are ambiguous.

Critically, legal privilege, which in the US and Europe protects communication between a company and its legal adviser and is regularly used to withhold evidence, is generally not recognised in China.

"In China, there's very little guidance out there, it's much more ‘Wild West’ because it's all so new," says Mark Jephcott, head of the Asia competition practice at Herbert Smith Freehills in Hong Kong.

The SAIC and NDRC did not respond to requests for comment.

Raids typically involve 10 to 30 antitrust agency officials arriving unannounced at a company's premises, usually early in the morning, and searching desk drawers, computers, files, lockers, safes and even vehicles, lawyers familiar with the process say.

Raids by uniformed SAIC officials are generally regarded as relatively professional, while the NDRC and local development and reform commissions can be more heavy-handed and often arrive in plain clothes, they say.

Either way, "it's very stressful and unpleasant", says Jephcott, who has been present at several raids, both as a former EU antitrust official and as a legal adviser.

CULTURAL NICETIES
Amid the initial chaos of a corporate raid, it's important to remember basic Chinese customs and courtesies, says Liyong Jiang, a partner at Beijing-based law firm Gaopeng & Partners, and a former official at the Ministry of Commerce, China's merger control agency.

Exchanging business cards and offering tea or coffee, and maybe ordering in lunch, too, are important gestures of co-operation, he says. "It doesn't matter what you offer, it's the gesture that's important. It's the Chinese way."

Having the regulators' business cards can also help a company's lawyers track down officials later for further communication – not always a simple process due to the bureaucracy at China's state agencies. Sitting down to a take-away lunch can help senior managers and lawyers chat with officials and build a rapport, Jiang says. "They'll be less stringent – they are human, too."

That may not work for everyone, though.

Another of those with knowledge of the Mercedes-Benz raid says the investigators, backed up by two or three computer technicians, went through the office "cubicle by cubicle and room by room . . . questioning senior managers . . . and downloading information from computers."

"Those investigators didn't take any breaks. They didn't drink tea or eat snacks or dinner," the person said, adding the officials only left at 11pm. "It was a very serious affair."

MAKING THINGS WORSE
Dawn raid training – through seminars, online courses and one-on-one coaching for frontline staff such as receptionists and security guards – aims to mitigate blunders, help companies contain the inspection and bring out officials' human side.

Lawyers recalled instances when well-meaning but naive employees made the situation worse – such as receptionists turning away officials because they didn't have an appointment or, worse still, allowing officials to roam the premises unchecked. In other examples, jittery employees deleted personal emails in what the Chinese authorities later construed was an attempt to obstruct the investigation.

"It's a detailed exercise," says Eva Crook-Santner, a member of the antitrust practice at law firm Baker & McKenzie in Hong Kong. "We guide clients through a dawn raid, focusing on all job functions – from the security guard to the IT [information technology] team."

Employees are trained how to handle intense questioning. This is key in China where an individual cannot refuse to answer a question on the basis they may incriminate themselves. Failing to respond constitutes a fine-able obstruction. Sometimes, lawyers say, staff wanting to appear helpful can share too much.

"Staff have to respond very carefully," says Jephcott. "They have to co-operate fully, but try to limit themselves to factual answers."

Simple IT resource planning can also help things go more smoothly. In China, officials will often take off with original documents and files. Having a high-performance photocopier and back-up hard drives can help provide copies of evidence, lawyers say.

Officials can sometimes show their human side.

One lawyer, who didn't want to be identified, recalled how an official on one raid spent more time flirting with the secretarial staff than searching for incriminating evidence.

Reuters

[CityFarmer]

One unique observation of China, is the price-fixing. It happened for baby formula, luxury bags, and in this case car spare parts.

The enforcement of anti-monopoly, will drive down the price, and thus raises the demand. A good news for CMHP, with lower cost of car-ownership?

(vested in CMHP)

Audi to accept Chinese anti-monopoly penalty
AAP AUGUST 11, 2014 9:30PM

German luxury car brand Audi will accept punishment from Chinese authorities for breaching anti-monopoly laws in the world's largest car market, it says.

An investigation by Chinese authorities found that an Audi dealer network had "violated national anti-monopoly laws", the brand's China arm said in a statement, adding the Audi joint venture involved had "closely cooperated with the investigation and will accept a penalty".

The statement came after China's National Development and Reform Commission (NDRC), which polices violations of "anti-monopoly" law, said it had been investigating the sector - dominated by foreign companies and their joint ventures - for more than two years.

It is the latest sweeping probe China has launched into alleged wrongdoings by foreign firms in multiple different fields, among them pharmaceuticals, technology and baby milk.

Audi is owned by the German car firm Volkswagen, which set up a joint venture with Chinese auto giant FAW to manufacture Audis and other models.

"Management processes in the sales and dealership structure are getting improved to prevent similar incidents in the future," the Audi China statement added.

It did not explicitly state that Audi acknowledged any wrongdoing.

But it added: "Audi and FAW-Volkswagen attach great importance that all applicable antitrust and competition laws are adhered to."

[greengiraffe]

Only SOEs linked China plays qualified for peace of mind investments. In addition, it will be more peaceful to invest in those that remains under the radar - ie work in progress. Will have to be cautious when they start their rara show just like any other stocks.

Otherwise how to have - "How To Grow A Dragon"?
Some fallen darling SOEs on sgx include CAO and Cosco...

GG

One unique observation of China, is the price-fixing. It happened for baby formula, luxury bags, and in this case car spare parts.

The enforcement of anti-monopoly, will drive down the price, and thus raises the demand. A good news for CMHP, with lower cost of car-ownership?

(vested in CMHP)

Audi to accept Chinese anti-monopoly penalty
AAP AUGUST 11, 2014 9:30PM

German luxury car brand Audi will accept punishment from Chinese authorities for breaching anti-monopoly laws in the world's largest car market, it says.

An investigation by Chinese authorities found that an Audi dealer network had "violated national anti-monopoly laws", the brand's China arm said in a statement, adding the Audi joint venture involved had "closely cooperated with the investigation and will accept a penalty".

The statement came after China's National Development and Reform Commission (NDRC), which polices violations of "anti-monopoly" law, said it had been investigating the sector - dominated by foreign companies and their joint ventures - for more than two years.

It is the latest sweeping probe China has launched into alleged wrongdoings by foreign firms in multiple different fields, among them pharmaceuticals, technology and baby milk.

Audi is owned by the German car firm Volkswagen, which set up a joint venture with Chinese auto giant FAW to manufacture Audis and other models.

"Management processes in the sales and dealership structure are getting improved to prevent similar incidents in the future," the Audi China statement added.

It did not explicitly state that Audi acknowledged any wrongdoing.

But it added: "Audi and FAW-Volkswagen attach great importance that all applicable antitrust and competition laws are adhered to."

[greengiraffe]

Chinese domestic auto brands lose market share
PETER CAI AUGUST 12, 2014 1:15PM

The market share of China’s domestic car brands has dipped below 20 per cent for the first time since 2009 even as the world largest auto market sees growth, according to news figures from China Association of Automobile Manufacturers.

During the first seven months of 2014, market share of Chinese-branded passenger vehicles fell 5.4 per cent to 17.7 per cent. Chinese car makers had one-third of the world’s largest car market just four years ago.

Chinese automakers have been struggling to compete with foreign car makers and their joint-ventures in China. At the same time, European, American and Korean automakers are steadily eating into domestic producers’ turf. European’s share of the market increased from 20.8 per cent in 2009 to 29.3 per cent last year.

Beijing has launched a wave of anti-monopoly investigations against foreign car makers including Mercedes. Chinese antitrust officials raided German carmaker Mercedes’ office in Shanghai last week.