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Deciding to Enforce Antitrust Laws, Beijing Serves Auto Industry Notice

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  • Why it matters

    Why it matters

    Foreign firms are under coming under special scrutiny by China’s regulators, as the country begins to vigorously enforce its antitrust laws.

  • Facts

    Facts

    • China first enacted antitrust legislation in 2008, but only now is beginning to crack down on cartels and price-fixing.
    • This week, Chinese regulators fined 12 Japanese auto-parts and bearings manufacturers for price-fixing.
    • Both Daimler and General Motors are being investigated by the Chinese authorities.
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    Audio

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The Chinese government is soon expected to impose hefty fines for price-fixing on some of the leading names in the global auto industry. Beijing intends to teach multinational corporations a lesson and force them to obey the country’s laws in the future – at least more than they have in the past.

What might seem as an inexplicable flurry of scrutiny by otherwise lax Chinese regulators in fact marks the beginning of a new era: China is trying to organize its economic landscape according to common international rules. This primarily means competition authorities are actually enforcing the laws already on the books.

On Wednesday, the New York Times reported that Chinese regulators found 12 Japanese auto parts and bearings manufacturers guilty of fixing prices. They fined the companies about $200 million (€151 million) in total. Chinese antitrust authorities are investigating other foreign automakers for possible price collusion, including General Motors and Daimler, the German company that manufactures Mercedes-Benz and Smart cars.

China’s economy has at least doubled in every decade since 1980 and has become increasingly complex. During the 1990s, the government did quite well with a mixture of cheerful anarchy and creative solutions to individual cases of doing business. Back then, the country’s economic framework was seemingly held together at times with tape and bandages.

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