Most US firms in China feel “targeted” by authorities, a survey said yesterday, as the government embarks on a series of high-profile investigations into foreign businesses.
An American Chamber of Commerce survey found 57 percent of respondents believed foreign firms are being singled out in China’s pricing, anti-monopoly and anti-corruption campaigns under Chinese President Xi Jinping (習近平).
Of those who said foreign firms were being targeted, 65 percent said they fear such campaigns will have a negative impact on them.
The results were part of the 17th annual business climate survey by the American Chamber of Commerce in the People’s Republic of China (AmCham China), which had responses from 477 of the organization’s 1,012 company members.
“All of us are concerned, because we’re on the sidelines for the most part watching and monitoring the campaigns by Xi Jinping and the leadership,” AmCham China chairman James Zimmerman said at a news conference announcing the results.
“We don’t know if it’s going to slow down, or who is going to be targeted next,” he said. “All we can do is set an example and do the right thing — exercise zero tolerance when it comes to these issues, put in place compliance programs and cooperate with the government when these things come up.”
Nearly half of US firms in China — 47 percent — say they feel “less welcome” in the country than before, up from 44 percent last year.
The survey’s release comes after Chinese authorities stepped up scrutiny of foreign firms, launching sweeping investigations into alleged malpractice in sectors ranging from pharmaceuticals to baby formula over the past two years.
This week US mobile chip titan Qualcomm Inc said it will modify its business practices in China and pay 6.088 billion yuan (about US$975 million) to end a long-running antitrust probe in the country, in perhaps the biggest fine ever levied by Beijing in such a case.
Other businesses such as Apple Inc and Starbucks Corp have sometimes received unfavorable coverage in state media over issues regarding service and pricing.
The moves have prompted fears from investors that overseas companies are being especially targeted. China maintains that its anti-monopoly law does not discriminate between domestic and foreign firms.
The AmCham survey highlighted a number of other areas of growing concern for US companies doing business in China, including the country’s choking air pollution, its slowing growth and the ruling party’s ever-tighter grip on the Internet.
For the first time, a majority of respondents — 53 percent — said air quality issues had made it difficult for their organization to hire senior talent to work in China.
The figure is up from 48 percent last year and 34 percent in 2013.
In addition, China’s economic growth is losing steam and more than 30 percent of companies surveyed said they had no investment expansion planned this year, the highest rate since 2009.
For the first time since 2010, respondents reported increasing Chinese protectionism as among the top five challenges they face.
The other four were labor costs, inconsistent regulatory interpretation, shortages of qualified employees and shortage of qualified management.
One bright spot in the survey was the impact of China’s much-touted anti-corruption campaign under Xi.
Corruption dropped from the fourth-largest challenge cited by respondents in 2013 to the sixth-largest last year.
In this year’s survey, it had dropped out of the top 10 entirely, falling to 13th place.
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