China Makes Life Hard for Multinationals

A five-year-old antimonopoly law is used to force price cuts
Glaxo’s Humphrey CCTV

China fired a warning shot for foreign business in late July. A senior official in a closed-door meeting in Beijing admonished the in-house counsels of more than two dozen European and U.S. multinationals, saying their China operations may be investigated for anticompetitive behavior. Come clean and confess, the official from China’s planning commission advised his audience. Shortly afterward, Chinese authorities announced a record $110 million in fines on five overseas baby formula makers for price fixing. One Chinese company was penalized.

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