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Dan Steinbock, research director for international business at the India China America Institute
In view of the past examples of investigations in the US and Europe, it is unlikely that tighter antitrust enforcement alone will alienate foreign companies from China.
US authorities have in the past investigated Chinese, Japanese and even western European companies. Naturally, such investigations have contributed to the concerns of those companies in the US. But few have ceased their efforts to expand in the US, says Steinbock, who was earlier a consultant for several multinationals and SMEs as well as international organizations, such as the OECD.
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Wang Huainan, CEO of Babytree.com, one of China's largest mother-and-baby online communities
Whether or not the foreign baby formula companies violate the law or not, the retail price of foreign infant formula sold in China can often be twice that of the same product in other countries.
"Some of the foreign-branded milk is produced locally in China with ingredients imported from home countries, while some others export their final products directly to China. But the tariff China charges on imported dairy products is only about 4 percent of the price, so high tax is obviously not the reason for huge price differences," Wang says.
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Peter Wang, antitrust law partner with Jones Day, a Washington-based law firm
Foreign companies have been hit harder by the recent investigations because China wants to enforce anti-monopoly laws and does not want prices to be unreasonably high, Wang says.
Foreign firms are usually high-end companies with more pricy labels, compared with domestic firms. "So when your concern is high prices, then naturally you end up focusing more on multinational companies," says Wang, who has been practicing anti-monopoly law for more than 21 years.
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Bala Ramasamy, professor of economics at the Shanghai-based China Europe International Business School
Measuring foreign and domestic firms with the same yardstick may be out of the question. "The NDRC is a state agency, so investigations against state-owned enterprises may not be done in the public domain, considering that China's social and economic context is different from that of the West.
"The public is not too aware of such investigations as they are often done within the government framework," says Ramasamy, whose teaching focus at CEIBS is international business strategy. He says there is sound logic on why most of the companies being investigated are multinationals.
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Xiaowei Rose Luo, associate professor of entrepreneurship and family enterprise at Insead.
"If you look at the ratio of international firms and domestic firms being investigated, you may get the impression that multinationals have a larger share," Luo says.
"Since the inquiries are a recent phenomenon and the enforcement is getting stronger, it is too early to use the ratio to make such conclusions. I would rather prefer to look at it more qualitatively. Some high-profile domestic jewelry and liquor firms have also been investigated and fined," says Luo, whose research has focused on how unique conditions in emerging economies can affect corporate strategies and performance.
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