CHINA TOPIX

04/25/2024 03:19:20 pm

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Chinese Anti-Trust Enforcers Pressure Companies Under Investigation to 'Admit Guilt'

Foreign businesses in China

(Photo : REUTERS/Kim Kyung-Hoon ) The national flag of China flutters behind a fence of the headquarters of the National Development and Reform Commission (NDRC) in Beijing, in this picture taken on July 12, 2013. China fined three companies -- Mead Johnson Nutrition Co, Fonterra and Biostime International Holdings -- in connection with a probe into price fixing and anti-competitive practices by foreign baby formula makers.

A group representing U.S. businesses in China claims a lack of due process in investigations into companies suspected of breaking Chinese anti-monopoly laws.

According to the U.S.-China Business Council (USCBC), Chinese regulators used techniques that force companies to "admit guilt" and respond to charges without a lawyer present.

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Some firms were asked to make statements without being informed of why they are being investigated, USCBC said.

"Such practices contradict both the letter and the spirit of China's efforts to promote rule of law and due process," the lobby group said in a report.

It is not the first time that a business group has complained about how China's regulatory agencies enforce the country's 2008 Anti-Monopoly Law.

The U.S. Chamber of Commerce, the American Chamber of Commerce in China and the European Union Chamber of Commerce in China have issued statements claiming unfair use of China's competition policy.

The complaints stem from the fact that although both overseas and local companies have come under scrutiny over alleged anti-competitive practices, the crackdown "in recent months," according to USCBC, has focused more on foreign businesses.

In April, the U.S. Chamber of Commerce wrote to Secretary of State John Kerry, telling him that China was using its competition policy to protect domestic companies threatened by foreign competition.

China has denied targeting multinational companies in its anti-trust campaign. It says agencies in charge of implementing the anti-monopoly law were only going after businesses that could abuse their market position to charge customers with "unreasonably" high prices.

Xu Kunlin, head of the National Development and Reform Commission's anti-monopoly bureau, told Xinhua News Agency that regulators treat foreign and domestic companies equally "to ensure justice for all."

U.S. companies that have faced anti-trust probes in China include software giant Microsoft Corp. and chip manufacturer Qualcomm Inc.

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