FOREIGN companies love to complain about doing business in China. The rules of the game are rigged against them, they grouse, the locals are corrupt and the government is always turning the thumbscrews on them. Amid such moans it is worth remembering that, for all the barriers that foreign multinationals face in China, it has welcomed them with open arms compared with the protectionism imposed by Japan and South Korea at comparable stages in their economic development. Nevertheless, the recent spate of high-profile crackdowns on international firms, and people associated with them, has prompted worries about a generalised anti-foreigner backlash.This week police in Shanghai formally arrested a British fraud investigator, Peter Humphrey, whom they had detained for six weeks as part of an inquiry into alleged bribery of doctors by foreign drug firms, along with his wife, also an investigator. Mr Humphrey had done work for GlaxoSmithKline (GSK), a British drugs firm, four of whose Chinese managers were arrested last month. Since these arrests other foreign drugmakers have come under investigation, including Sanofi and Eli Lilly. All three firms say they will co-operate with the inquiries. There have also been crackdowns on alleged price-fixing by foreign manufacturers of milk formula, and regulators are scrutinising the prices charged by foreign carmakers and their joint…
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The Economist: Business
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