BEIJING, Aug. 12 (Xinhua) -- China's crackdown on business
malpractice in efforts to build a healthy economy has drawn
complains from certain foreign media as the move involved probes
into and penalties on some foreign multinationals.
The Washington Post said in a recent article that foreign
companies in China said "they feel like scapegoats" as the Chinese
government is, in part, attempting to "deflect attention from
China's own domestic food-and drug-safety concerns."
Beijing's determination to create a better investment climate,
followed by effective measures, can indeed make some foreign
companies feel the pain, but only those who ignore the laws of
Given their wrong-doings were verified with hard evidence, those
companies that have been probed and punished are not in a very
strong position to complain about it, and "feeling like scapegoats"
will not help them correct their malpractices and make a healthier
and more robust development in China.
More importantly, the "scapegoats," which can hardly be proved
innocent, are not the victims here, the Chinese consumers are.
Probes showed that British pharmaceutical company
GlaxoSmithKline (GSK) used travel agencies to offer large bribes to
government officials, medical associations and doctors while doing
businesses in China in order to expand its market share and boost
the prices of its medicines.
As a result, consumers were paying about 30 percent more for
drugs because of the bribery. The British drugmaker has admitted
that its executives had broken the Chinese law.
Chinese authorities have also fined six baby formula producers a
total of 670 million yuan (108 million U.S. dollars) for
An anti-trust probe launched in March showed that those milk
powder makers, including Mead Johnson and Dumex, set minimum resale
prices for distributors and punished distributors who sold their
products at lower prices by suspending supplies or ending
The infant milk producers all said they respected the penalties
and would take remedial measures and strengthen law-abiding
Foreign companies in China are not "scapegoats" as described by
the Washing Post. Instead, they were punished because they took
advantage of the loopholes in the Chinese law to pursue high
profit. If these unlawful acts happened in other countries, they
would also face punishment.
Just one year ago, the U.S. Department of Justice said GSK had
agreed to plead guilty and pay 3 billion U.S. dollars to resolve
its liability from the unlawful promotion of certain drugs, its
failure to report safety data and alleged false price
Unlike what the Post quoted a leading U.S. businessman, who
asked not to be identified, as saying that foreign companies are
"an easy target," China launched probes into these multinationals
in an attempt to fight business corruption and market monopoly.
Any companies, if they break the law, have to pay the price no
matter they are foreign or domestic ones.
The six baby formula producers that will pay fines for price
fixing and anti-competitive practices also include Chinese infant
milk company Biostime International Holdings.
Yes, China is still a developing country, where failure to abide
by the law happen occasionally and "hidden rules" are sometimes
more effective than regulations. But laws and regulations have been
gradually improved since the reform and opening-up in the late
China's probe into multinationals issues a warning to both
foreign and Chinese companies that the country's market order will
become more fair, standard and clear.
If a company wants to do long-term business in China, it should
comply with the regulations here and give up the dream of
challenging the Chinese law for profiteering. Enditem