(Ecns.cn) – Recent harsh penalties against Wal-Mart, the world's largest retailer, have fueled fears of a changing sentiment in China toward foreign businesses. Other overseas companies have also become concerned, with many wondering whether to adjust their strategies in building up relations with the Chinese government.
On October 25, 2011, after a 15-day suspension as punishment for mislabeling a pork product as "organic," Wal-Mart reopened its 13 stores in Southwest China's Chongqing. During that period, Ed Chen, Wal-Mart China's president and chief executive, announced his resignation due to personal reasons.
Since December 1978, when Coca-Cola returned to China, many foreign companies have entered the country's massive market. Some have dealt with the Chinese government for over 30 years, and have built up good relationships with local officials.
However, for many foreign businesses, it is still not easy to earn money in the country.
Officials can't fix everything
Following the pork scandal, Scott Price, president and CEO of Wal-Mart Asia, flew to Chongqing immediately to deal with the situation.
During a meeting, Chongqing Mayor Huang Qifan said he believed Wal-Mart could learn from its mistakes and achieve better development in China. Huang quoted the old Chinese saying "No discord, no concord," and added that the Chongqing Municipal government will support Wal-Mart in its future operations, according to the Southern Weekend.
Scott Price promised that the company would improve its quality control system, strengthen management of pollution-free agricultural products and set up a management monitoring mechanism for all of it goods, reported the China Daily.
Later, Huang commented that the measures taken by Wal-Mart were rational and practical, saying that they showed the company's sincerity and willingness to assume responsibility.
Experts say such acknowledgement by a top domestic official might mean something to a foreign business, but its function is still limited when a company is confronted by a widely watched scandal.
Huang Peng (alias), an experienced staff member in charge of public relations – especially with the government – at a big multinational corporation, revealed that involvement by top officials does not mean things will get fixed once and for all.
Furthermore, under the current performance assessment system carried out by the government, foreign companies belong to a vulnerable group, according to the Southern Weekend.
