Stricter trade regulations in China could be inducive to the creation of a fairer business environment and boosting investors' confidence in the long term, several senior business executives said.
Beijing's determination to create a better investment climate, followed by effective measures, can indeed make some foreign companies feel the pain, but only those who ignore the laws of China.
"Foreign companies in China face friction in some fields, but they should pay efforts to overcome these issues on the legal basis. That is a key point when they are doing business in China," said Christian Overgaard, President of Danfoss China, in a written interview with Xinhua.
Chinese authorities have recently launched a campaign against malpractices by multinational companies including bribery. On August 7, record fines totaling 670 million yuan (108 million U.S. dollars) were imposed on six baby formula companies operating on the mainland following an anti-trust probe, the largest fines ever imposed for anti-trust infringements.
"We can see many foreign companies which are in the compliance with China's law have successfully become important part of China's economy. Foreign companies especially from developed countries should bring advanced business principal and ideology to China rather than violate local law,"Overgaard added.
"For instance,as we are a Danish company in China,we will obey both countries' laws when doing business," he said, adding that there was zero tolerance for bribery for the company.
Moreover,Danfoss also required its local supplier to set up a anti-bribery system, Overgaard said.
"Any company, no matter domestic or foreign, must be punished if their behavior breaks the law," he said.
He said stricter regulations in China would not reduce the country's attraction to foreign investors. On the contrary,such a move would be inducive to the creation of a fairer business environment and boosting investors' confidence in the long term.
Echoing with Overgaard,He Yuping,head of Communications in Novozymes (China) Investment Co. Ltd., also voiced support to China regulator's campaign.
"Tightened regulations in China do not only apply to foreign companies but also many domestic companies in different sectors. That is a positive signal that the Chinese government is intensifying its fight against corruption and business bribery," she said.
"I believe China remains an attractive investment target country after laws and rules for business become stricter, which could offer better guarantees to foreign investors," she said.