China and reciprocity

China and foreign investment | Unfavoured nation | The Economist

An interesting column in The Economist pointing out that, even though Chinese companies meet resistance in their investments in foreign companies, China has been doing exactly the same to foreign companies looking to buy into China. For example:

Anti-investment forces in Australia were emboldened when China blocked Coca-Cola’s $2.4 billion purchase of Huiyuan, a juice producer, using a new anti-monopoly law that increasingly looks like nothing more than an impediment to foreign buyers. Coke’s rejection was unique only in the method used, and the lengths to which the company gone to establish its commitment to China—it gave billions of dollars in investment and support of the Beijing Olympics even when other companies were bailing out.

As for the issues that arise when dealing with Chinese companies, the final paragraph is of note:

Chinalco contends this is a misunderstanding of China’s state-owned enterprises, which operate independently. To some extent this is true—Chinese companies do compete with each other—but it is also false: they follow government policy, have government-appointed management and enjoy privileged access to the vast Chinese market. These issues have been aired before in Asia, most notably in the case of Singaporean companies, but China’s wealth, and scale, and the opacity of its government and laws put them in starker relief.