You just can’t make this stuff up! A Shanghai court has convicted U.S. based Johnson & Johnson of violating Chinese “anti-monopoly” laws. Really, this from the One Party State? According to the Chinese state media monopoly “The market for medical instruments in China faced a lack of competition.” What a hoot in the land of State Owned Enterprises.
Although the multinational firm was fined a measly 530,000 yuan, the decision is indicative of an accelerating trend, where local government regulators and media actively work to damage the reputation of Western firms who have been doing business in China for a long time.
Other recent moves to harm American firms include the parade of stories deploring the sanitation of our fast food chains like McDonald’s and KFC. An astounding charge to those who know anything about the horrific nature of Chinese food production. Chinese media reports claimed ice served at KFC was often “dirtier than toilet bowl water.” Which, in my personal experience, would make it a lot more appealing than the Yangtze river. Of course, if they made their ice with water from the Shanghai municipal water monopoly it would be full of bacteria from the thousands of dead pigs floating in the water source.
Another fun story has been the barrage of attacks on Apple that came after Tim Cook made the announcement he would be moving some manufacturing back to the U.S. Gotta love the article entitled “Defeat Apple’s ‘Incomparable’ Arrogance” from the folks at the People’s Daily. This from a government that believes it is their right to determine what Chinese readers read and when possible, think. As soon as China can find a domestic smart phone OS (think buying out struggling BBRY), Samsung and Apple can kiss this market good bye. Of course, in the meantime Cook got on his knees to kiss the ring of the communist media.
The real goal here is to tilt the playing field in favor of Chinese domestic firms by undermining the powerful legitimacy foreign products have in the eyes of Chinese consumers. It is also a subtle way of inviting American companies to leave China. Having brought the capital, technology and know-how to China, they are no longer necessary. Being unnecessary they are also unwelcome and have been shown the door.
This does not surprise those of us who understand China’s history. The go to strategy for Chinese Communist leaders since Mao has been to fawn on their enemies until they get what they need from them and then arrange an arrest on trumped up charges or perhaps a convenient airplane crash. Watching the arrogance and gullibility of American CEOs play out on this stage would be darn humorous, if it were not for the jobs, national wealth and global power that we’ve lost in the process of enriching this oligarchy of thugs.
Greg Autry serves as Senior Economist with the American Jobs Alliance, Economist with theCoalition for a Prosperous America and is co-author (with Peter Navarro) of Death by China: Confronting the Dragon – a Global Call to Action. He blogs regularly at: http://www.gregautry.us/blog and on the Huffington Post.