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China Putting More Pressure on Foreign Firms, Study Finds

A survey of over 100 firms by German think tank Merics and BDI group found the threshhold for exerting pressure on companies is falling and the number of cases has jumped since 2018


a man walking in front of Lujiazui financial district across the Huangpu river at dusk in Shanghai, amid the Covid lockdown on March 28, 2022
A survey by a German think tank and an industry body assessed responses from over 100 foreign firms doing business in China. It found more pressure is being exerted on foreign firms to adhere to China's political thinking. This image shows a man walking in front of Lujiazui financial district across the Huangpu river at dusk in Shanghai, amid the Covid lockdown on March 28, 2022. Photo: Aly Song, Reuters.

 

China is putting increasing pressure on foreign companies doing business in its markets so they are more in line with its political agenda, a German study has found.

A survey of more than 100 companies by the Berlin-based Mercator Institute for China Studies, a think tank known as Merics, and the BDI industry association revealed that the threshhold for exerting pressure on companies is falling and that the number of cases where this has happened has risen significantly since 2018.

The researchers said that in addition to issues of national sovereignty, reports on the emergence of Covid-19, sanctions against Chinese companies like telecoms equipment maker Huawei or support for parties classified as anti-Chinese are now seen as “new red lines”.

The study, co-author Max Zenglein said, “was about recognizing a pattern of when and how China exerts pressure.”

In one case, German carmaker Daimler apologised several times to China in 2018 after running advertising with a quote from the Dalai Lama.

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Covid-19, Huawei

China has consistently denied allegations that the Covid virus was leaked from a specialist laboratory in the city of Wuhan, where it was first identified at the end of 2019.

Washington sees Huawei as an arm of the Chinese Communist Party’s global surveillance machinery, but Huawei has repeatedly denied spying for the Chinese state.

Foreign consumer goods companies in particular have been subject to boycotts in China, with Western textile firms targeted on social media in response to Western criticism of China’s treatment of the Uighur minority in the Xinjiang region.

“For fear of being targeted, companies may avoid addressing unfair treatment of foreign firms in China. Or they may consider it safest to align themselves with the Chinese government’s positions and goals,” the researchers wrote.

China’s foreign ministry said it could only comment once it had seen the full report.

 

  • Reuters with additional editing by Jim Pollard

 

 

 

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Jim Pollard

Jim Pollard is an Australian journalist based in Thailand since 1999. He worked for News Ltd papers in Sydney, Perth, London and Melbourne before travelling through SE Asia in the late 90s. He was a senior editor at The Nation for 17+ years and has a family in Bangkok.

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