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It's reassuring to hear that there are professionals in the Chinese government pushing back against this abuse.
China Researcher Blasts Antitrust Probes as ‘Absurd, Ridiculous, Stupid’ - China Real Time Report - WSJ
A woman is reflected on the glass wall of a BMW showroom as she walks past it, in central Beijing.
Reuters
Auto industry executives and commentators have argued that hidden motives must be behind recent antimonopoly probes of luxury car makers in China. Now a blog post by a senior government researcher is adding more fuel to such speculation.
Foreign luxury car makers have come under the spotlight in recent months in China after state media accused them of earning exorbitant profits. Audi , BMW and Mercedes-Benz announced price cuts on spare parts to appease regulators, citing an investigation by China’s economic planning agency, the National Reform and Development Commission.
Many analysts have wondered why the NDRC and not the Ministry of Commerce is leading China’s antitrust charge. Recent comments by a commerce ministry-affiliated researcher illustrate how the NDRC-led crackdown isn’t winning too many fans from Commerce Ministry bureaucrats.
“How absurd, ridiculous and stupid the idea is,” Ma Yu, a senior researcher at a think tank affiliated with the Ministry of Commerce, wrote in a blog posted to the popular Internet portalSina.com.
The commerce ministry declined to comment on the matter, saying only that the views expressed in Mr. Ma’s post are solely those of the author. Mr. Ma wasn’t immediately available for comment. Officials at the NDRC declined to comment.
Mr. Ma in his post blamed the highly regulated nature of China’s auto industry for creating a situation in which car makers enjoy the upper hand. China’s auto policy, which was drafted by the NDRC, requires that foreign car makers form joint ventures with Chinese partners to make cars in the country. It also sets high thresholds that have effectively blocked some private entrepreneurs from the sector.
“The policy has successfully created a market that is relatively closed and oligopolistic,” Mr. Ma wrote. “That is the source of very different prices between home and abroad, the lack of momentum at Chinese manufacturers to innovate, and the failure to protect consumer interests.”
“For China’s auto industry, there is little to do but a complete overhaul of the current policy,” he argued.
More In Antimonopoly
Mr. Ma also scoffed at the idea that the antitrust campaign against luxury car makers would actually improve the lives of ordinary Chinese people.
“Consumers of imported luxury cars are either rich people or celebrities. They are extremely insensitive to price swings, and even seeking higher prices to flaunt their status.”
He called on the government to put its antitrust focus on sectors that more directly affect hundreds of millions of ordinary consumers, including banks, insurance, telecom, electricity, petroleum and transportation.
NDRC officials have said they treat everyone fairly. “No matter whether it’s a fly or a tiger, we will take aim at it,” Xu Kunlin, head of the NDRC’s antimonopoly division, told reporters in February.
But Mr. Ma said the NDRC’s actions don’t correspond with those words. “Compared with the blatant monopolistic behaviors in some sectors, the auto monopoly is hardly an issue. Moreover, it’s very difficult to decide whether they constitute monopolistic practices.”
The NDRC cited the setting of minimum car prices as evidence when it accused foreign car makers of pursuing monopolies. But Mr. Ma called this accusation questionable.
“It’s more of a common business model than monopolistic practices. What’s more, the business models are permitted by the government,” he said, noting that such business practices were actually sanctioned by the government in earlier regulations governing the automotive sector.
China Researcher Blasts Antitrust Probes as ‘Absurd, Ridiculous, Stupid’ - China Real Time Report - WSJ
- September 5, 2014, 5:33 PM HKT
A woman is reflected on the glass wall of a BMW showroom as she walks past it, in central Beijing.
Reuters
Auto industry executives and commentators have argued that hidden motives must be behind recent antimonopoly probes of luxury car makers in China. Now a blog post by a senior government researcher is adding more fuel to such speculation.
Foreign luxury car makers have come under the spotlight in recent months in China after state media accused them of earning exorbitant profits. Audi , BMW and Mercedes-Benz announced price cuts on spare parts to appease regulators, citing an investigation by China’s economic planning agency, the National Reform and Development Commission.
Many analysts have wondered why the NDRC and not the Ministry of Commerce is leading China’s antitrust charge. Recent comments by a commerce ministry-affiliated researcher illustrate how the NDRC-led crackdown isn’t winning too many fans from Commerce Ministry bureaucrats.
“How absurd, ridiculous and stupid the idea is,” Ma Yu, a senior researcher at a think tank affiliated with the Ministry of Commerce, wrote in a blog posted to the popular Internet portalSina.com.
The commerce ministry declined to comment on the matter, saying only that the views expressed in Mr. Ma’s post are solely those of the author. Mr. Ma wasn’t immediately available for comment. Officials at the NDRC declined to comment.
Mr. Ma in his post blamed the highly regulated nature of China’s auto industry for creating a situation in which car makers enjoy the upper hand. China’s auto policy, which was drafted by the NDRC, requires that foreign car makers form joint ventures with Chinese partners to make cars in the country. It also sets high thresholds that have effectively blocked some private entrepreneurs from the sector.
“The policy has successfully created a market that is relatively closed and oligopolistic,” Mr. Ma wrote. “That is the source of very different prices between home and abroad, the lack of momentum at Chinese manufacturers to innovate, and the failure to protect consumer interests.”
“For China’s auto industry, there is little to do but a complete overhaul of the current policy,” he argued.
More In Antimonopoly
- More Criticism, and a Guide, for China’s Antitrust Push
- How China's Using Its Antimonopoly Law to Pressure Foreign Businesses
- Chinese Government Raids Microsoft Offices in Four Cities
- Hong Kong Law to Bust Cartels? Not Likely.
- A Glimpse into Chinese Law-Making
Mr. Ma also scoffed at the idea that the antitrust campaign against luxury car makers would actually improve the lives of ordinary Chinese people.
“Consumers of imported luxury cars are either rich people or celebrities. They are extremely insensitive to price swings, and even seeking higher prices to flaunt their status.”
He called on the government to put its antitrust focus on sectors that more directly affect hundreds of millions of ordinary consumers, including banks, insurance, telecom, electricity, petroleum and transportation.
NDRC officials have said they treat everyone fairly. “No matter whether it’s a fly or a tiger, we will take aim at it,” Xu Kunlin, head of the NDRC’s antimonopoly division, told reporters in February.
But Mr. Ma said the NDRC’s actions don’t correspond with those words. “Compared with the blatant monopolistic behaviors in some sectors, the auto monopoly is hardly an issue. Moreover, it’s very difficult to decide whether they constitute monopolistic practices.”
The NDRC cited the setting of minimum car prices as evidence when it accused foreign car makers of pursuing monopolies. But Mr. Ma called this accusation questionable.
“It’s more of a common business model than monopolistic practices. What’s more, the business models are permitted by the government,” he said, noting that such business practices were actually sanctioned by the government in earlier regulations governing the automotive sector.
