China Power

Foreign Firms Under Siege In China

Plus, Qingdao’s oil pipeline explosion, the Liaoning in the South China Sea & China’s lunar rover. Friday China links.

Foreign Firms Under Siege In China
Credit: flickr/Intel Free Press

U.S. company Qualcomm becomes the latest foreign firm under investigation by the Chinese government for price fixing and monopolistic activity, according to Reuters.

The move follows similar investigations against foreign baby formula makers Danone, Fonterra, and Mead Johnson, as well as foreign technology firms General Electric and Siemens. The heavy focus on foreign companies has led some to suspect that the campaign is a thinly veiled excuse to attack foreign firms and raise the market share for China’s domestic companies. Caijing notes that the National Development and Reform Commission (NDRC) plans to investigate price fixing in such areas as “airlines, daily consumer goods, vehicles, telecoms, pharmaceuticals, and household appliances.” Foreign companies in those markets should take note.

In analyzing these developments, the Financial Times comes to the conclusion that China’s has chosen “reform” over than “opening up.” On the other hand, in his Xinhua interview, Minister of Commerce Gao Hucheng promises that China will continue to “open up wide to the outside world.”

In other news, the South China Morning Post reports that Chinese investigators have blamed human error for the oil pipeline explosion that killed 55 in Qingdao. According to Yang Dongliang, director of the State Administration of Work Safety, “negligent maintenance” led to the oil leak and subsequent explosion, while an “inadequate response” (including the lack of an evacuation after the leak was discovered) increased the number of casualties. BBC reports that nine have been arrested in relation to the explosion, including seven employees of Sinopec (the oil company that owned the pipeline) and two employees of the city’s economic and technological development zone.

Meanwhile, the Wall Street Journal’s China Real Time blog looks into how rapid urbanization ties into the recent oil pipeline explosion in Qingdao. Most residents in the Huangdao district had no idea that they were living close to an oil pipeline, which had originally been located far outside the populated areas of the city.

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Most attention has been focused on the East China Sea this week, as China’s new Air Defense Identification Zone raised eyebrows all over the world. Meanwhile, however, China has also been active in the South China Sea. As previously reported, China’s aircraft carrier, the Liaoning, docked at Sanya City on Friday. The Liaoning is scheduled to hold exercises in the South China Sea, including areas where China has territorial disputes with Vietnam and the Philippines. The Foreign Ministry of the Philippines has already expressed concern over the exercises, saying the aircraft carrier’s presence “serves to threaten the status quo.” Liaoning‘s presence has made some wonder if China is going to set up a new Air Defense Identification Zone in the South China Sea as well. During a press conference on Wednesday (link in Chinese), China’s Foreign Ministry spokesman Qin Gang said that China would set up other ADIZs “in due course” after completing “relevant preparation work.”

Finally, Xinhua reports that China plans to launch a lunar rover in early December. Yutu, or “Jade Rabbit” will be the first Chinese rover to land on an extra-terrestrial body. The New York Times’ Sinosphere blog notes that the rover’s mission will focus on the moon’s geology, including collection of materials that could potentially be commercially exploited. Slash Gear point outs that the landing could potentially interfere with NASA’s current mission to sample and study the moon’s atmosphere, a sign that the U.S. and China need to start communicating better when it comes to space exploration.