Fair, legal business urged for sound market

With recent anti-monopoly fines handed to seven firms, China is striving to build up a fair and free market for both foreign and domestic enterprises.

Essilor, Nikon, Zeiss and four other providers of contact lenses were fined more than 19 million yuan (3.1 million U.S. dollars) for price manipulation by China's top economic planner at the end of May.

Also last month, the bribery case of GlaxoSmithKline (GSK) China, which involves 46 suspects, was handed over to prosecutors in central Hunan Province. It was also announced that the use of Windows 8 operating system (OS) in new government computers is forbidden, a move to ensure computer security after the shutdown of Windows XP.

"We have paid great attention to these setbacks which foreign companies have encountered, but our confidence in this market will not be affected," said Yang Qicheng, general manager of MicroConstants China, a preclinical and clinical service provider.

Last year, fines totalling more than 1.4 billion yuan were issued to domestic and foreign firms over anti-trust infringements.

"The moves are just a correction of the past. For the past few decades, China had been adopting preferential policies for foreign firms with a lack of standardized administration for them," said Zhao Zhongxiu, an economics professor at the Beijing-based University of International Business and Economics.

According to Zhao, many foreign companies used to adopt "localized " tactics to carry out their business, including the recruitment of officials' children.

Irregularities need to be probed for a sound market and foreign companies should abide by rules and regulations, said Zhao.

Further reform and opening-up policies will be implemented in the country. From June 17, the approval process for foreign companies planning to invest in China will be relaxed, while strengthening national security reviews.

Security reviews are common for all countries and investment may be refused due to security concerns, said Zhou Mi, a researcher with the Chinese Academy of International Trade and Economic Cooperation.

"In the past, China did not realize the security problem due to its economic development levels and a heavy dependence on foreign technologies and products," said Jin Baisong, another researcher with the academy.

"For example, in the past we wouldn't have known what to use if there hadn't been Windows. But now we have our own software," he said.

The administration of foreign investment should be more mature and have a comprehensive legal system, said Zhou.

For example, a law should be drafted which combines attracting foreign investment with safeguarding national security and anti-monopoly, for a better guided, routine and legal administration of such investment, suggested Zhou.

"We expect foreign investment policies to be more transparent, clear and standardized," said Yang.