Foreign Companies in China Under Attack Century Square, Nanjing Road Chin While China is still a very active and growing market for foreign business, a sumber of prominent companies a experiencing a sharp increase in problems while operating This was confirmed by the AmCham China Business Surveyin 2014, which the 60 percent of members feel less w come than before up from 41 percent a year ago. Their member firms report continuing challenges, including rising labor cost inconsistent application of laws, confusing infomation, p are from permented departments, political tensions and dowing growth. In addition, a number of targeted attacks on foreign firms have deterned many European and US firm from either new or increased investment in China investigation China's National Development and Reform Commission concluded that the US chip Qualcomm had used monopoly tactics to set preferable lice ing fees. The move was seen as giving preference to local companies, and the US. Chamber of subject of yet another investigation in early September as Chinese officials made unannounced inspections of Microsoft's offices in Beijing, Shanghai Ganghou, and Cheapdo. This mone followed a purchasing ban on Microsoft's Windows & PC software in May by the Chinese govemment supposedly e security concem following the e he revelations of spying by the United States made by Edward Snowden Targeting other industries, the US food processor OSI Cp plier to a member of fast- food chain in in China ali over 20 years, was accused of using expired meat. Chinese regulates and persistent reporting of alleged problems on state media put a sadden halt to OST's operations. The authorities closed down the plant, and restaurants such as McDonald's and Burger King cancelled further orders with OSL While there may have been a problem, the company was treated very hurshly given that no test results were given and there were to reports of illness from the CS: Chinese regulators have hon targeting various industries, as well as technology and lood processing, including pharmaceuticals, car companies and in particular high-profile companies The US. Chamber of Commerce has accused China of u fusing the antineoply law to force for eign companies to cut prices. Mercedes-Benz staff, for example, were shocked when tes mes from the antitrust investigators from China's National Development and Reform Commission (NDRC) roughly entered the company's east China sales office near Shanghai's Hongqiao international airport and subjected employees to intense questions for ten hours, rifling through the offices and demanding data and other information More and mon foerigo companies have been carly morning raids and had their desks, computer, safes, files, and so on inspected and evide www.downloadslide.net CHAPTER? IMPLEMENTING STRATEGY 303 taken away, often downloading data from the companies computers Legal rights typical in Expe and North America are not acknowledged in China and information is difficult to acquire about the processes there. It seems that China's antiest enforcement agencies, the NDRC, and the State Administration for Industry and Commerce (SAIC) has become increasingly aggressive in seiring all evidence that could give them leads to other of For their part, the Chinese authorities claim that the investigations are to keep competition fair and to protect consumer rights. However, often the investigates advise foreign companies not to seek legal advice, in addition. Epean companies reporting to the European Chamber of Commerce claim that they have been intimidated into accepting p gpunitive measures withou requesting a court hearing. In fact, 61 percent of European companies that have a long tenure operating in China now say that doing business there is getting more difficult A number of Westem firms blame poor regulation in the supply chains and stricter impo tion of of regulations than in Chinese firms. As a result, fins such as Walmart and others involved in food have set up their e ir own supply sources and implemented their can inspection and over sight of their supply chains. These moves, however, raise the overall costs of their products While there are many challenges for foreign companies operating in China, the activities described here are blatant and have resulted in a considerable decline in firm wanting to operate there, according to the AmCham survey. The survey concluded that further deterioration of the investment climate would harm ventures and linkages among countries for Notes 1. Andrew B. Laurie Burkin US Fim Fed Ulcome in China. Accending so Seney: US Compusin Say They Have Bee Targets of Chiu's Antinopoly and Anticomption Campus Wall Street Journal, September 2 2014: AmCham China 16th Annual Business Climate Surves www.pines2014 September 2, 2014 Richard Waters Micro China Probe T Financial Ter, ly 29, 2014: Andrew B "After China Meat Scandal T Reflect Bader Perils for Rines Being Sy Rad Publicity's Effects Mine Swiftly Wall Street Jal September 2, 2014 Michelle Prior and Norsko Sho "Food and firing owes leam to live with China raters, Angel 10. 2014: Laurie Bakt "Chen's the Aily Law Me Viele Io WTO C US. Chamber of Commerce Report Says China's Use of Apely Law Has Been Subjective Wall S (One (New York, NY Sep 2014