2014-08-05

China Cracks Down on Foreign Automakers as Protectionism Takes Off

China is forcing foreign automakers to cut prices.
Mercedes' office in China raided by antitrust regulators
Automakers are the latest foreign companies to be targeted by Chinese regulators, who have ramped up anti-monopoly investigations in industries ranging from pharmaceuticals to electronics.

Regulators officially named U.S. chipmaker Qualcomm a monopoly last month and are widely expected to levy a heavy fine. Last week, agency investigators raided Microsoft's offices in four Chinese cities as part of an ongoing probe.

China is stepping up efforts to bring companies into compliance with an anti-monopoly law enacted in 2008, having in recent years targeted industries as varied as milk powder and jewellery.

The Chinese government says Chinese are being exploited, but the ones doing the exploitation are the ones who pass high tariffs on imports and luxury goods. It is possible to buy Chinese made goods in the United States for not much more than they sell at the store in China.

China Using Antimonopoly Law to Pressure Foreign Businesses
Some foreign companies cite rising costs for property as the reason for higher pricing. Some goods are slapped with import and luxury taxes.

Officials "feel Chinese consumers are being exploited," said Marc Waha, a Hong Kong-based partner at law firm Norton Rose.

The rising scrutiny, particularly during the past year, stems in part from the increasing number of Chinese who go abroad and see what people pay elsewhere.

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