Left: Dan Steinbock of the India China America Institute says he doubts tougher enforcement will put overseas companies off China. Right: Wang Huainan, CEO of Babytree.com, says infant baby formula can cost twice as much in China as elsewhere. Photos Provided to China Daily

Robust credentials

Waterman says stepped-up monopoly investigations against foreign firms in China may slow foreign investment in some areas and may deter some companies from bringing their most advanced technologies into the market.

But both Waterman and Cucino of the European Chamber of Commerce in China say the anti-monopoly investigations will not derail foreign investment into China in a broader sense.

"China is still an extremely attractive market for foreign investors due to its large growing market, growing middle class, growing economy and also an increasingly innovative economy," they say.

Dan Steinbock, research director for international business at the India China America Institute and an expert on globalization, says that 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.

The case is similar in Europe, where comparable investigations have often raised concerns about "Fortress Europe". Nonetheless, Europe has remained a very popular destination for foreign investment.

"Everybody complains about tough rules, but everybody also knows that they are part of the game," Steinbock says. "Rather, the use of such investigations in China suggests that the Chinese business environment is growing more mature and more competitive."

Cucino of the European Chamber says better enforcing the law could increase foreign direct investment in China because companies will feel safer.

But there are still many uncertainties, and the gray area is often in the law's enforcement. "The law only gives you an overall picture but when you come to a specific question, with a lot of options, each of them need to be covered with separate regulations," he says.

Wang of Jones Day says sometimes people may feel that the antitrust law in China is not as sophisticated as the law in the US. "But you have to keep in mind that it is the first five years in China. In the US, similar laws came into existence some 100 years ago, and Europe has had it for decades. Their first five years were worse than China's first five years."

mengjing@chinadaily.com.cn

 

( China Daily European Weekly 09/13/2013 page6)