Showing posts with label Price fixing. Show all posts
Showing posts with label Price fixing. Show all posts

Saturday, August 31, 2013

A Level Playing Field For Foreign Firms?

We previously wrote on this blog how the anti-monopoly laws were being unfairly used against foreign companies, but rarely are Chinese SEOs held to account.  As China Unbound examines, it's not only price fixing that's the problem, environmental laws, often flouted openly by companies poisoning rivers and creating cancer villages.

It is less politically treacherous: attacking a foreign firm for not adhering to Chinese environmental regulations will not jeopardize the future of a Chinese NGO. In addition, foreign firms have traditionally been more sensitive to bad publicity and more likely to respond when alerted to their environmental failings. Of course, the multinationals should not need to be reminded to do the right thing, but holding them to account while allowing their Chinese counterparts a free pass not only disadvantages the foreign firms but also does little to address the real source of China’s environmental challenge.


The Chinese break down in tears when it's they who stand accused of doing real damage to the environment.

According to the South China Morning Post, a recent report by the Chinese Academy of Social Sciences blames Western-funded environmental organizations working in the Mekong River region for harming China’s reputation by “irresponsibly attacking Chinese investors and misleading local communities with biased reports.” The intent of these NGOs, according to the report is apparently to limit China’s economic influence in the region. When questioned about the foreign sources of funding, however, the report’s authors refused to answer.


While western companies might welcome a level playing field that does actually have some respect for the law, if the law is used selectively against competition by the Chinese, there will be few international players left in the country.  There's always India.


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Thursday, August 29, 2013

In China, Anti-Monopoly Laws Don't Apply to SEOs

Caixin is reporting that while there have been arrests, Mao-era self-criticisms, and corruption investigations into foreign companies this month, the anti-monopoly law which is five years old this year has been used only twice against state owned enterprises (SOEs).

The first use of the law was against TravelSky, which was "informally" investigated for price fixing, but eventually led to zero arrets or punishments.  The second time a company was held up on anti-trust charges was in 2011, when an investigation was dropped against China Unicom and China Telecom - this particular case dropped the most both companies asked for it to be dropped.

By contrast, in August, the National Development and Reform Commission imposed record fines on no less than six foreign companies, following a swift investigation into price fixing.

The NDRC pocketed £71 million in fines.  Such laws in China are passed to offer some comfort to foreign companies who need reassurance that their products or services are going to be protected to some extent by rule of law, but selectively enforcing laws to suit the financial needs of shady characters in government does little to inspire confidence.


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Tuesday, August 13, 2013

BBC Report: Drug Price Fixing, "corruption is an open secret"

On the back of the official government investigation into a massive drug price fixing scandal and the graft that riddles the medical establishment in the country, the BBC's Martin Patience has filed this special report.

Patience interviews a drugs salesman who paid doctors to get his firms drugs into the hospital pharmacies.
One of the salesmen said his company paid about $1,000 (£647) to get its product back on the shelves at one hospital.

"I don't deny [giving money to doctors] happens in foreign companies," the sales representative said.

More surprising is the practice of selling appointments to patients outside hospitals.
We filmed touts illegally selling appointments outside a Beijing hospital. They are so well established they even have business cards.

One tout told us if we paid him $50 (£32) he would get us appointment that afternoon. Otherwise you would have to wait for weeks.

Tackling corruption (as we've heard before) is a priority as the CCP tries to build a consumption based economy.
We've had the gold rush here and now the current economic model is unsustainable," says James McGregor, a business analyst.

"In order to build a consumption-driven economy, consumers need to be confident in the future, the government and their healthcare.

"And that may be why the government is going after all these pharmaceutical companies, because they've got to build confidence among the people.

"You can't order people to take money out of their pocket and spend it - you've got to lure them to do it because they're happy with the way things are."

 



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