The alleged anti-foreigner bias of China’s National Development and Reform Commission, which enforces pricing provisions of the 2008 Anti Monopoly Law, has become an increasingly common complaint among multinational executives working in the country.
The grumbles began last year when the NDRC fined six baby formula makers, five of them foreign, for illegal pricing practices. They grew more audible during an investigation this summer into carmakers, and reached a crescendo in September when overseas chambers of commerce released their annual assessments of business conditions in the world’s second-largest economy.
While the penalties assessed to date by the NDRC seem to confirm the suspicions of its critics, a closer look at the NDRC’s enforcement actions reveals a more complicated picture. Multinationals are easy targets in a country where nationalistic instincts run deep. But some of the regulators’ more famous targets appear to have wandered into its sights by accident. Others were ratted out by other multinationals. And in one of the cases, at least five large global car manufacturers appear to owe the NDRC a thank-you note for targeting suppliers who admitted to cheating them for more than a decade.