China has begun taking action over alleged antitrust violations in the auto industry, raiding or investigating many large foreign companies and applying pressure on them to lower prices or be fined. This is rattling foreign firms in China, and some experts and academics are calling on the international community to launch joint countermeasures. The smell of gunpowder is emanating from what could develop into a trade war between China and the rest of the world.
China’s National Development and Reform Commission is investigating a dozen automakers, such as Volkswagen AG-owned Audi, BMW, Daimler AG-owned Mercedes-Benz, Tata Motors-owned Jaguar Land Rover, Fiat-owned Chrysler, Toyota and Honda. Since last month, all these companies have announced car or component price cuts.
In addition, over the past month, the commission has raided the offices of Microsoft Corp, Qualcomm Inc, Caterpillar Inc, Mead Johnson Nutrition Co, and Abbott and Danone, all foreign companies targeted by anti-monopoly investigations.
Add to this the Chinese government’s decision to request that government institutions no longer purchase products from Apple and Cisco, that financial institutions should not purchase US information products, including IBM server solutions, electronic databases from Oracle and storage devices from EMC Corp, the world’s largest manufacturer of computer storage solutions.
The Chinese government is attacking foreign companies on a wide front, but the legal foundations and the reasons for doing so are general and unspecific, which leaves the impression that China is intentionally attacking foreign companies to create business opportunities for local companies and promote Chinese industry. Although many companies will accept price cuts or fines to be allowed to remain in the Chinese market, many of them are unhappy with the fuzzy laws and regulations, and the opaque and unpredictable business environment. It has even been suggested that international businesses join hands and take legal and political action to demand transparency and protect their rights in response to Beijing’s anti-monopoly push.
For international companies, the Chinese market is very important. China’s past double-digit growth made foreign businesses salivate, but they are also concerned over risk and uncertainty in the market. During its period of rapid economic growth, China was in great need of foreign capital, technology and marketing, but as local Chinese companies have expanded and grown, they are now competing directly with foreign firms. The result is that the relationship between Chinese industry and foreign business is changing from a welcoming and cooperative relationship into one of head-on competition.
The whole thing might just be a storm in a tea cup and once the two sides have made their positions clear and initiated talks to lay down the new rules of the game it might settle down. However, it could also develop into an international trade war with each side boycotting the other’s products and services. If the former comes to pass, then it would be a positive development, helping revitalize China’s economy. However, if the latter comes to pass, Taiwanese businesspeople in China who hold dual nationality might become the victims of the trade war due to their conflicting roles. However, if they correctly assess the situation and respond to it appropriately, they might be able to take advantage of the possible situation and come out as winners.
In the case of a trade war, the government and Taiwanese businesspeople in China must be alert to and aware of the risks of doing business in that nation and come up with ways to respond to a change in the situation as swiftly as possible.
US aerospace company Boeing Co has in recent years been involved in numerous safety incidents, including crashes of its 737 Max airliners, which have caused widespread concern about the company’s safety record. It has recently come to light that titanium jet engine parts used by Boeing and its European competitor Airbus SE were sold with falsified documentation. The source of the titanium used in these parts has been traced back to an unknown Chinese company. It is clear that China is trying to sneak questionable titanium materials into the supply chain and use any ensuing problems as an opportunity to
It’s not every month that the US Department of State sends two deputy assistant secretary-level officials to Taiwan, together. Its rarer still that such senior State Department policy officers, once on the ground in Taipei, make a point of huddling with fellow diplomats from “like-minded” NATO, ANZUS and Japanese governments to coordinate their multilateral Taiwan policies. The State Department issued a press release on June 22 admitting that the two American “representatives” had “hosted consultations in Taipei” with their counterparts from the “Taiwan Ministry of Foreign Affairs.” The consultations were blandly dubbed the “US-Taiwan Working Group on International Organizations.” The State
The Rim of the Pacific (RIMPAC) exercises, the largest naval exercise in the region, are aimed at deepening international collaboration and interaction while strengthening tactical capabilities and flexibility in tackling maritime crises. China was invited to participate in RIMPAC in 2014 and 2016, but it was excluded this year. The underlying reason is that Beijing’s ambitions of regional expansion and challenging the international order have raised global concern. The world has made clear its suspicions of China, and its exclusion from RIMPAC this year will bring about a sea change in years to come. The purpose of excluding China is primarily
The Chinese Supreme People’s Court and other government agencies released new legal guidelines criminalizing “Taiwan independence diehard separatists.” While mostly symbolic — the People’s Republic of China (PRC) has never had jurisdiction over Taiwan — Tamkang University Graduate Institute of China Studies associate professor Chang Wu-ueh (張五岳), an expert on cross-strait relations, said: “They aim to explain domestically how they are countering ‘Taiwan independence,’ they aim to declare internationally their claimed jurisdiction over Taiwan and they aim to deter Taiwanese.” Analysts do not know for sure why Beijing is propagating these guidelines now. Under Chinese President Xi Jinping (習近平), deciphering the