Criticism of China’s Anti-Trust Actions Is Unfounded

By+MEI+XINYU

THE Chinese government has recently launched antimonopoly probes against foreign corporate giants such as Microsoft， Mercedes-Benz and Audi. Some Western media outlets have interpreted the investigations as suppression of foreign enterprises. Although expected， these reactions are unreasonable in the light of evidence.

Chinas restrictions on monopolies are no more extreme than those practiced by other major economies， and in some ways are more lenient. When foreign companies violate laws， the Chinese government is obliged to step in and make them put their operations to rights. Isnt this response justified？ Does anybody think that international companies are above the law in China？

Developed countries in North America and Europe have also accused Microsoft， Mercedes-Benz and Audi of monopoly practices and punished them severely. These corporations are nearly as strong in China as they are in the West. Yet， when China investigates them for monopoly practices it is accused of unfair restrictions. It should also be noted that large-scale transnational corporations tend to be more “unbridled” in developing countries than at home.

It should also be noted that the law is not specific to foreigners； the Chinese government applies the same anti-monopoly regulations to domestic businesses. Many big-name domestic enterprises have been punished for violating antimonopoly laws， including China Telecom， China Unicom， Kweichow Moutai and Wuliangye Group.

Accusing China of “conspiracy” and“trade protectionism” for enforcing its laws is actually the result of certain foreign companies complaints about the deterioration of Chinas investment environment since the subprime mortgtage crisis. Of course Chinas investment environment is not perfect and improvements could be made to let domestic and foreign companies share a better business environment. However， it is absurd to accuse China of discriminating against foreign companies when it has been well-known for giving “supernational”treatment to foreign enterprises for over 20 years. In the face of data showing increasing foreign direct investments in China， these criticisms are feeble.

The anti-monopoly law has been referred to as the “constitution of the market economy.” Its enactment and implementation improve the countrys market order， to the benefit of all lawabiding enterprises. By requiring both domestic and foreign enterprises operating on its territory to abide by its antimonopoly regulations， a developing country like China can promote international fairness and a balanced economy. Most developing countries are weak in making and enforcing anti-monopoly regulations， which places them at disadvantages when exercising extraterritorial jurisdiction.

In developing countries where corpo- rate regulations lag behind， monopoly problems are even more pronounced. This is evident in the race among transnational companies to monopolize the Chinese market. Certain transnational corporations take advantage of weak laws to get higher profits from developing countries. Until recently it was largely the developed countries who investigated and penalized monopolistic enterprises.

When anti-trust agencies punish corporate violations， they calculate fines based on the guilty companies global sales. This means that the governments of a few developed countries are pocketing part of the compensation that should go to developing countries. Given the increasing global income disparity and the threat of foreign monopolies， it is only reasonable for developing countries like China to safeguard their interests through the application of anti-monopoly regulations and extraterritorial jurisdiction.