U.S. said to complain to China over anti-monopoly crackdown

Bloomberg

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Customers exit an Apple Inc. store in the Wangfujing area of Beijing, China. Customers exit an Apple Inc. store in the Wangfujing area of Beijing, China.

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U.S. expressions of concern that China is selectively applying anti-monopoly laws to discriminate against foreign companies escalated, with the Treasury chief sending a letter on the matter to his counterpart in Beijing.
Treasury Secretary Jacob J. Lew said in the note to Vice Premier Wang Yang that China is using competition law to force companies to cut prices its consumers pay for products relying on foreign intellectual property, according to a person with knowledge of the correspondence. Lew said such steps might have consequences for bilateral ties, according to the person, who asked not to be identified because the letter isn’t public.
Lew’s complaint follows criticism from the main U.S. and European business lobbies in China that authorities in the world’s second-biggest economy are discriminating against non-Chinese corporations. Dozens of foreign companies are being targeted in probes, with regulators opening an anti-monopoly investigation into Microsoft Corp. (MSFT) in July and state media accusing Apple Inc. of using its iPhone to steal state secrets.
With Chinese economic growth in danger of missing Premier Li Keqiang’s target of about 7.5 percent this year, the regulatory flap poses an additional headwind. The government today is scheduled to release foreign direct investment data, which previously showed a 0.4 percent drop from last year to $71.1 billion in the first seven months of 2014.
China’s defense
Chinese officials have sought to defend their actions, with a rare joint press briefing last week of the country’s three antitrust regulators highlighting that only about 10 percent of anti-monopoly investigations have involved foreign businesses. In remarks to an audience including executives of overseas companies, Li last week pledged to improve conditions for attractive foreign investment.

Jacob J. Lew, U.S. Treasury Secretary.
China’s anti-monopoly measures are transparent, fair and done in accordance with the law, Qin Gang, a Foreign Ministry spokesman, said at a briefing in Beijing on Sept. 2.
Volkswagen AG’s Audi, Bayerische Motoren Werke AG, Daimler AG’s Mercedes-Benz, Tata Motors Ltd.’s Jaguar Land Rover, Fiat SpA’s Chrysler, Toyota Motor Corp. and Honda Motor Co. have all announced price cuts of vehicles or spare parts since July in the wake of probes.
General Motors Co. said last month that its joint venture with SAIC Motor Corp. has been responding to regulator requests since 2012.
Authorities raided the offices of software maker Microsoft in July, while Qualcomm Inc. (QCOM) and Mead Johnson Nutrition Co. have also fallen under anti-monopoly scrutiny in China.

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