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Domestic insurance companies fined for price fixing

Lan Lan
Updated: Sep 3,2014 10:49 AM     China Daily

The antitrust regulator announced fines on 23 Chinese insurance firms and a local industry association on Tuesday, amid foreign companies’ complaints that they fall victim to “selective and subjective enforcement” of antimonopoly probes in the country.

The 23 provincial insurance companies and Zhejiang Insurance Industry Association were fined more than 110 million yuan ($17.8 million) for fixing new car insurance discounts and other anti-competitive practices, according to the National Development and Reform Commission.

The regulator said it ceased investigation against nine insurance companies, including US insurance company Liberty Mutual Insurance Group’s subsidiary in Zhejiang and Japan’s Aioi Insurance, after it discovered they didn’t participate in price fixing.

The NDRC “has treated local and foreign companies equally”, it said on its website.

The statement came after a report released on Tuesday by the American Chamber of Commerce said that a majority of its members feel less welcome than before in China and almost half believe that foreign companies are being targeted in the country’s latest antitrust drive.

US companies operating in China believe they face “selective and subjective enforcement” of antimonopoly, food safety and other rules, according to the report.

Qin Gang, Foreign Ministry spokesman, said at a daily news briefing on Tuesday that implementation of antitrust laws is a common practice worldwide.

“The Chinese regulators have fully abided by the pertinent Chinese laws during the investigations, and the law enforcement has been transparent and fair,” Qin added.

He Maochun, director of the Economy and Diplomacy Research Center at Tsinghua University, said if the ongoing antitrust probes cannot be well enforced, both Chinese and foreign companies will be hurt in the long run, as the purpose of the law is to create a fair, competitive market.

Since most of the antimonopoly probes were sparked by public complaints and media reports in China, investigative agencies would be neglecting their duty if they took no action.

Huo Jianguo, president of the Chinese Academy of International Trade and Economic Cooperation under the Ministry of Commerce, said foreign companies need to adapt to changes in China’s economy, including a slowdown in growth, rising costs and lower profits in some industries.

“The Chinese economy remains robust compared with most other countries. More economic reform plans have been put in place. Foreign companies should have confidence in the reform and China’s business environment,” he said.